top of page
  • Writer's pictureOleksii Kushch

What does Ukraine need during the war?

The red pill of the painful truth of reality or its antithesis, the blue pill of the blissful lie of illusion?

To put it even more harshly, a "warm bath" during a war kills because it interferes with concentration and the search for optimal solutions.

This is what happened with the grain corridor.

Today, it has become a good test of our economic resistance to the war factor.

Last spring, I formulated the following theses.

Let's assume that maritime logistics is completely blocked for us.

Even if we get a temporary improvement in this matter, it is better to treat it as a pleasant bonus, without using this factor as a constant in the formula of our new economic development model.

Hence my theses:

1. Launch a national program for processing agricultural raw materials.

2. Creation of logistics centers for storing raw materials in neighboring friendly countries.

3. Creation of transport and logistics hubs in the west of the country.

The strategic goal is to reduce the physical volume of raw material exports and increase the level of export value added.

The task is to reduce the burden on the country's logistics and transportation systems, and to increase energy security by increasing the share of biofuels in the energy balance.

What had to be done?

1. Launch a three-tiered program for processing agricultural raw materials:

- micro-level - providing free technological and technical grants (equipment) to small farms and family farms to launch a program of "small-scale processing" of agricultural raw materials.

- mid-level - cooperation of medium-sized farms and state assistance to them in the form of: interest rate compensation; compensation of part of the loan body for the purchase of equipment; compensation of costs for connection to networks; compensation of the cost of installation work, engineering and marketing services; state guarantees for exports, etc.

- macro level - creation of a state biofuel company on the basis of Ukrspyrt enterprises, production of bioethanol and alcohol.

The purpose of the above measures is to reduce raw material exports (tonnage) by 20-30% and increase the share of biofuels in the energy balance to 10-15%.

One of the tasks is to create a decentralized processing system that is virtually invulnerable to missile attacks.

2. Establishment of terminals for storage of Ukrainian grain in countries such as Poland, Moldova, and Romania on the basis of customs warehousing ("dry ports").

The goal is to accumulate the country's strategic food stock in safe places and sell the surplus at the peak of world prices.

3. Establishment of a distribution transport logistics hub in Lviv region for transshipment of grain onto grain trucks adapted to the European "gauge".

Conduct customs control by Ukrainian and Polish customs directly at the hub's terminals.

The goal is to speed up and increase cargo turnover to the Baltic ports.

4. Launch a state program to purchase grain from small and medium-sized farms to stabilize domestic grain prices.

The goal is to keep small farms motivated to continue growing grain.

5. Revise the model of VAT refunds for exports (moratorium on VAT refunds for raw material exports and uninterrupted payment of refunds for exports of processed products).

The goal is to use fiscal incentives to create additional production redistribution.

6. Create a logistics cooperation for the formation of grain batches for export by small and medium-sized farms.

The goal is to minimize the purchasing monopoly of grain traders.

7. Launch a digital platform for trading railroad and port quotas.

The goal is to provide access to transport communications and port infrastructure for small and medium-sized businesses. Minimizing the impact of the port and railroad mafia on the industry.

8. Introduction of a special military tax on exports of large grain consignments.

The goal is to bring part of the grain rent to the state budget.

The European Commission is now planning to launch "solidarity routes" for the export of Ukrainian grain.

Perhaps Turkey will unilaterally launch a grain corridor.

But this is all about the interests of grain traders and large TNCs.

Meanwhile, small and medium-sized farms are completely losing their motivation to grow anything.

That is, the whole strategy as of now is to ensure maximum export of the "cumulative result" of two seasons: 2021/2022 і 2022/2023.

And then what? What will grow on these lands next?

4 views0 comments


bottom of page