The Law of Ukraine

On Grain and Grain Market in Ukraine

Date of Entry into Force:
July 31, 2002

The Law of Ukraine On Grain and Grain Market in Ukraine (hereinafter referred to as the Law) defines state policy regarding development of grain market as a priority branch of economy of agro-industrial complex of Ukraine.

The Law aims at creation of legal, economic and organizational conditions of competitive production and forming grain market for ensuring internal state needs in food, seed and fodder grain, raising its export potential.

The state recognizes priority of grain market, facilitates its development and sustainable functioning.

The Law defines such terms and concepts as accredited exchange, grain production, state resources of non-requested mortgage grain, mortgage purchase of grain, mortgage grain, granary, intervention transactions, intervention fund, register of grain (mortgage grain) and other.

Pursuant to the Law subjects of grain market are:
  • subjects of grain production;
  • subjects of grain storage;
  • subjects of mortgage purchases of grain and conducting of intervention transactions;
  • accredited exchanges;
  • other subjects of entrepreneurial activity, which operate at grain market.

Thereto subjects of grain production are owners, lessees and users of land plots, which use them for production of grain.

The Cabinet of Ministers of Ukraine conducts state regulation of grain market by:
  • introducing mechanism of state mortgage purchases of grain;
  • creation of intervention grain fund;
  • ensuring financing of intervention fund and mortgage purchases of grain at the expense of State Budget;
  • certification of services for storage of grain and products of its processing;
  • conducting pricing policy at grain market and insurance of risks for the subjects of grain market;
  • introducing mechanism of export and import of grain and products of its processing under international agreements, as well as other measures.

The Law defines the procedure for forming and use of grain resources. Grain resources of Ukraine consist of: grain of state reserve; grain of intervention fund; non-requested mortgage state grain; grain of state seed insurance fund; regional resources of grain; own grain resources of subjects of market.

Intervention resources of grain are formed by the State agent for conducting intervention measures at the expense of the State Budget. State resources of non-requested mortgage grain are formed at the expense of the State Budget and bank credits by the State agent for ensuring mortgage grain purchases.
Regional resources of grain are formed by concluding agreements at the accredited exchanges at the expense of budget of the Autonomous Republic of Crimea, oblasts, cities Kyiv and Sevastopol within defined by them volumes.

The Law introduces mechanisms for declaring and control of quality of grain. The procedure for declaring grain is defined by the Cabinet of Ministers of Ukraine. Grain warehouse shall monthly present declarations regarding volumes of mortgage grain, grain of state reserve, non-requested mortgage grain, grain of intervention fund and other stored grain.

Grain shall be stored in grain warehouses. The owners of grain shall be entitled to conclude agreements on storage of grain in grain warehouses with obtaining storage documents for grain. The owners can also keep grain in own granaries.

Pursuant to the Law, grain warehouse shall issue one of the following documents to confirm admission of grain: double warehouse certificate, simple warehouse certificate or warehouse receipt.

The Cabinet of Ministers of Ukraine envisages assignment of funds for procurement of grain as food and seed in the draft of the State Budget of Ukraine annually. Mortgage purchases of grain shall be conducted by the State agent for ensuring mortgage purchases of grain and the persons authorized thereto within their authorities.

The State agent for ensuring mortgage purchases of grain shall be designated by the Cabinet of Ministers of Ukraine on a competitive basis.

The Law defines the procedure for forming and use of intervention fund, which is created for regulation of level of internal prices for the products of grain processing. Intervention price for grain is the constituent of pricing policy and aims at support of level of prices and profits of agricultural producers.

The Law also defines the export and import procedure of grain and products of its processing under the international agreements of Ukraine. Activity of the State agent for ensuring export and import of grain and products of its processing, which is connected with export and import of grain and products of its processing under the international agreements, shall be conducted at the expense of the State Budget.
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