The World Bank approved a $200 million loan for support to Ukrainian farmers

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On May 24 the World Bank’s Board of Executive Directors approved a US$200 million loan to Program-for-Results (PforR) on Accelerating Private Investment in Agriculture to improve opportunities for small and medium enterprises (SMEs) in the Ukrainian agriculture sector.

According to World Bank’s press release, The Program aims to increase agricultural sector competitiveness, diversification, and growth by enhancing the efficiency and targeting of sectoral support policies, improving transparency and efficiency of use in the state agricultural land, and improving agribusiness SMEs’ access to export markets. All of these are key preconditions for the successful development of the agriculture sector.

Agricultural exports remain a key driver of the Ukrainian economy, representing almost 42 percent (US$ 18 billion) of total export value. Currently, the sector is operating below its potential and, together with increased exports, could make a significantly larger contribution to economic growth.

“Ukraine can improve its economic growth by enhancing efficiency and transparency of its agricultural sector,” said Satu Kahkonen, World Bank Country Director for Belarus, Moldova and Ukraine. “A 30 percent increase in agricultural productivity could result in additional cumulative 4.4 percent of GDP growth over the next five years.”

The program will help improve access to export markets for Ukrainian agribusiness SMEs dealing with the high-value food products of animal origin and live animals. The program will also help facilitate cross-border trade and address export market requirements in Ukraine’s key high-value markets, such as the European Union, China, Gulf Cooperation Council countries, the US, and Canada.

The program is also expected to enhance sector policies to increase access to key agricultural inputs by improving efficiency and targeting of the current agriculture state support programs; enhance transparency in land lease markets; complete the registration of all state land; and strengthen land rights protection by improving owners’ and users’ awareness and enforcement of their rights. The last issue is particularly important for women and poorer property owners.

Since May 2014, the World Bank has provided a total of US$ 5.6 billion to Ukraine, through four development policy loans and seven investment operations, as well as a US$ 500 million gas guarantee and US$ 750 million policy-based guarantee. The World Bank’s investment projects support improving basic public services that directly benefit the people of Ukraine, by improving water supply, sanitation, heating, power, roads, social protection and healthcare, as well as private sector development.

As reported earlier, the World Bank keeps forecast of Ukraine’s GDP growth at 2.7%  in 2019.

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