The Law of Ukraine

On State Support for Agriculture in Ukraine

Date of Entry into Force:
January 1, 2005

The present Law defines the fundamentals of state policy as regards to stimulation of manufacturing agricultural produce and development of agricultural market, as well as ensuring food safety of the population. The Law does not regulate the issues defined by the Land Code of Ukraine.

The state regulates wholesale prices for some kinds of agricultural produce by setting minimum and maximum procurement prices. The essence of the state price regulation lies in conducting by the Agricultural Fund the state interventions in the amounts that allow setting price equation on the level not lower than minimum procurement price and not higher than maximum procurement price.

The Law gives the list of goods for which state price regulation is performed and budget subsidies are allocated. The subject (recipient) of a budget subsidy or a special budget subsidy is a direct producer of the object of such subsidy.

Temporary administrative price regulation is a complex of administrative measures aimed at prevention or stop of speculative or agreed setting of prices by the sellers and/or buyers of the objects of state price regulation at the organized agricultural market, which cannot be corrected in other way. The decision on introduction of administrative regulation regime for a separate object of state price regulation is adopted by the Cabinet of Ministers of Ukraine upon submission of the Agricultural Fund. The term of operation of administrative regulation regime shall not exceed six successive calendar months, including the month in which decision on its introduction was adopted.

The Agricultural Fund is a specialized institution, which is authorized by the Cabinet of Ministers of Ukraine to perform pricing policy in the agricultural branch of Ukrainian economy. It is a budget organization, has its estimate, accounts and carries out non-profitable activity. The Agricultural Fund is subordinate, accountable and under control of the central body of executive power on forming and ensuring implementation of the state agricultural policy. The Fund is not the body of state administration and cannot issue normative legal acts. Provisions about it are approved by the Cabinet of Ministers of Ukraine.

While obtaining credit funds for manufacturing of agricultural produce the business entities shall preliminary insure risks of its destruction (loss). The object of complex insurance shall be any of the following objects:
a) the amount of expenses born due to manufacturing of a separate kind of agricultural produce;
b) an expected price of the agricultural produce that is manufactured;
c) expected income (profit) from the sale of agricultural produce that is manufactured.

The Fund of Agricultural Insurance Subsidies (FAIS) of Ukraine is a state specialized institution which is established for granting insurance subsidies to the producers of agricultural products. The FAIS is a budget organization, has its estimate, accounts and carries out non-profitable activity. The FAIS is subordinate, accountable and under control of the central body of executive power on forming and ensuring implementation of the state agricultural policy. Provisions about the FAIS are approved by the Cabinet of Ministers of Ukraine. The FAIS spends money for:
a) granting insurance subsidy in the amount of 50 per cent of the value of insurance premiums (contributions), which were actually paid by the subjects of agricultural market during complex and index insurance of the agricultural produce;
b) granting insurance subsidy in the amount of 50 per cent of insurance franchise in case of insurance event under complex and index insurance of the agricultural produce;
c) performing settlements with the State Budget.
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