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The third and final round of the Fifth Ukrainian Grain Congress (UGC) was held in Washington, D.C. this spring from 24-25 March 2015. Over 50 Senior Representatives from the Ukrainian grain industry, International Financing Institutions (IFIs) and the Ukrainian government discussed key challenges facing the Ukrainian grain sector and where investment is most needed. The Congress, supported by the Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD) since 2011, actively promotes between Ukraine and third countries on the future of Ukraine’s grain sector.

The meeting of the Ukrainian-American Agrarian Congress commenced on 24 March with opening remarks from Oleksiy Pavlenko, Minister of Agrarian Policy and Food of Ukraine, who highlighted the country’s commitment to unlocking its agricultural potential and contribute to global food security. “Ukraine ranks as the sixth largest exporter of wheat. In 2014, it exported 44 percent of the 24 million tonnes that the country produced. But Ukraine has the potential to double its production capacity with sufficient investment flowing into the sector,” says Mr Pavlenko.

Maximizing the potential of Ukraine’s agricultural sector would mean confronting a number of challenges, including structural problems with the Government and liquidity problems with the banks. Speakers at the meeting shared ideas for the way forward, including promoting the privatization of land, creating a welcoming environment for foreign investment in Ukraine, increasing market transparency, and strengthening the financial system.

In 2014, 64 million tonnes of grain were produced in Ukraine. “With less than half of this grain consumed domestically, developing existing and new viable export markets is a top priority,” says Oleksandr Kapustin, Ukraine’s Alternate Permanent Representative to FAO. “We need to address barriers to trade in the EU, such as specific food and quality standards, but also should find alternate markets for agricultural products.” Among other issues, Mr Kapustin highlighted the need to address premature exhaustion of EU export quotas for the agricultural sector. Ukraine’s consultation with the EU regarding the potential for increasing these quotas would be one step in the right direction. In 2011, following the first Ukrainian Grain Congress, a Ukrainian Grain Sector Working Group (WG) was established to serve as a platform for policy dialogue, which was strongly supported by FAO and EBRD with an eye on development of Ukraine’s grain sector. Since its formation, the WG has met regularly to facilitate grain market transparency and policy predictability, and in 2013, the industry took full ownership of the platform to ensure long-term continued dialogue.

Prior to the establishment of the WG, the country lacked a trusted channel for dialogue between the Government and the private sector. “In addition to providing a platform to discuss key issues the sector faces, such as quality standards and inspection protocol, it has truly opened doors which had previously not existed,” remarked Nikolay Gorbachov, Director of New World Grain Ukraine, Soufflet Group.

The event was composed of six panels. Dmitry Prikhodko, Economist, FAO Investment Centre moderated the panel on improved management of the land market and promotion of agricultural technologies and presented on another panel which sought to provide an assessment of international grain markets development. One of our colleagues from the World Bank, Maurizio Guadagni, offered an analysis of and the potential for improved grain storage and logistics on the panel which covered areas for investment such as agricultural infrastructure and logistics.

Other panels touched upon the contribution of the USA and Ukraine to global food security, an investors’ perspective on investment in agribusiness, and the challenges and achievements in improving the country’s investment climate.

The event organizers – Volodymyr Klymenko, President of the Ukrainian Grain Association, and Rodion Rybchinskiy, Head of the Business Project Division with APK Inform – were pleased to report during the closing remarks that, looking forward, Ukraine and the United States have agreed on working together to promote agricultural development. At the occasion of the meeting, negotiations begun on a joint Memorandum of Understanding between the two countries to do just that and the signature of the agreement is anticipated later this year.

This is the last of three rounds of the Fifth Ukrainian Grain Congress; the first was held in Paris in October 2014 and the second round took place in the Kiev in the fall of 2014.

For more information, please visit the website dedicated to the Ukrainian grain sector on EastAgri.

“Photo credit: U.S.-Ukraine Business Council (USUBC)”