Dialogue between business and the state: Deloitte moderated the meeting of the agriculture sectoral working group held within the framework of the Ukraine Plan

Dialogue between business and the state: Deloitte moderated the meeting of the agriculture sectoral working group held within the framework of the Ukraine Plan

The meeting of the agriculture sectoral working group established under the Ministry of Economy of Ukraine, organized by the Kyiv School of Economics and moderated by Deloitte, was held. The participants presented proposals as part of the Ukraine Plan preparation for the implementation of the Ukraine Facility and further elaboration of sectoral development strategies.

More than 120 registered participants from various sectors of agro-industrial complex, including representatives of the Ministry of Agrarian Policy and Food of Ukraine, associations, and reform support offices, took part in the group’s work.

“Deloitte is actively and systematically involved in projects aimed at the development and transformation of the domestic agricultural sector. At the previous stages of cooperation, our experts helped the government to develop a 10-year vision for the sector as part of the Ukraine Recovery Plan preparation, explored a model for attracting private investment in irrigation development, developed an investment menu by sub-sectors, and shared global expertise in public-private partnerships. Participation in the sectoral group allowed us to further validate the conclusions of previous stages, as well as to better understand what reforms the business expects and what investment projects and areas show the most promise,” said Iaroslav Serputko, Head of Food Processing and Agriculture Group at Deloitte Ukraine.

During the meeting, the Ministry of Agrarian Policy presented to the participants a strategic vision for the agricultural sector development until 2033, which Deloitte, among over things, helped to develop. The participants formulated 25 proposals for changes in policies in crop production, livestock, raw materials, deep processing, and infrastructure. The proposed changes relate to state regulation, European integration and harmonization of Ukrainian legislation with the EU, access to funding and markets, as well as human capital and technology development.

According to Oleksiy Sobolev, the agricultural sector accounts for about 10% of Ukraine’s GDP and more than 40% of export revenues. At the same time, the sector has a significant potential for development, and working with business helps to identify priorities for the industry. The Deputy Minister of Economy of Ukraine noted that the proposals of the sectoral group will be taken into consideration during the preparation of the Plan and proposed for incorporation into the sectoral development strategy. He also added that the Ukraine Facility envisages the creation of a special investment instrument to cover risks in priority sectors for EUR 8 billion, which will stimulate the attraction of more than EUR 30 billion to the Ukrainian economy. Investors will be able to receive financing through the EBRD, EIB and other international financial institutions.

As a result of the five discussions, experts suggested that the Ministry of Agrarian Policy and Food of Ukraine implement 15 policies. In addition, the participants submitted 88 proposals for potential investment areas with a total budget of over US$3 billion. At the same time, recovery and reconstruction needs in agriculture are estimated at US$29.7 billion over the 2023–2033 period, and another US$2.6 billion will be needed to restore the irrigation system in 2027–2033.

“The proposals received and analysed are of high value, as they represent the voice of the business community. At the same time, a significant gap between the volume of proposals submitted and the estimated need of the sector indicates that the dialogue between business and the state needs to be strengthened,” summed up Iaroslav Serputko.

The Plan’s format does not provide for the inclusion of investment projects; however, the analysis and consideration of such projects is necessary to identify the priority areas for development under the special investment instrument provided by the Ukraine Facility. The respective proposals will be submitted to the Ministry of Agrarian Policy and Food of Ukraine and may be taken into consideration in the strategy for development of agro-industrial complex until 2033.