Since 1997 Ukrainian Grain Association (UGA) actively participates in development of the legislation regulating the Ukrainian grain industry, building up effective dialogue between the authorities and grain business.
During 20 years of work, UGA became the powerful organization having the corresponding reputation in the agrarian market of the country. Nowadays among the participants of the Association are world famous multi-national trading companies, the largest domestic exporters and producers of grains. The companies engaged in UGA realize nearly 80% of all grain exports of Ukraine.
Ukrainian Grain Association actively cooperates with the Cabinet of Ministers of Ukraine, the Verkhovna Rada of Ukraine, the Ministries, and other public authorities.
Representatives of UGA are the members of Coordination council on agrarian policy under the Cabinet of Ministers, the government working groups on grain market coordination questions. Also, it actively participates in work of public councils and boards of the profile Ministries. The Association has partner communications with a number of the international organizations in the agrarian sphere.
Mykola Alekseevich Gorbachev holds a position of the President of Ukrainian Grain Association since February 20, 2017. And since March 28, 2005, he is the Director of New World Grain Ukraine (Soufflet Group). Also, he is a co-chairman of grain and oilseeds committee of the European Business Association (EBA). Since 1992, worked at executive positions in such companies as Tradigrain SA (Commercial Director), Adora, Ukrimpex (Sirector).
Mykola Alekseevich graduated from the International University of the market relations getting the specialty of economist. In 2009, received the degree of the Business Master Administration at the International institute of management, and in 2016 – the degree of the master of public administration in the sphere of homeland security at the National academy of public administration.
- Mykola Alekseevich, why is it so necessary to support and lobby the interests of grain exporters?
Supporting of UGA members is one of the most important tasks in our daily work. The members of our Association are the companies of world class who well know the requirements of the agricultural market. Forming the conditions for civilized work of the market can be achieved, only by combined efforts of the state and business, and we are that necessary link in a fixed discussion. And if someone tries to create difficulties for any company, it is always simpler to find more rational solution for counteraction in common efforts.
15-20 years ago Ukraine even didn't dream about such a dynamic production and logistics development. Today the export volume of grain totals nearly 7 bln USD and the attraction of such funds from the market is a huge work. More than 40% of currency receipts are provided thanks to export of grain. Imagine a situation when traders wouldn't be able to provide payment of such amount. Thus, remaining the balance of not redeemed grain would provoke internal fall of the prices and reducing the profitability of grain production and lead to production reduce in the next season. Therefore, protection of traders interests is directly connected with the produced volumes in our country. Any concerns, whether financial risks or logistic problems, steadily affect the amount of the attracted financial resources to Ukraine.
- What most important achievements of UGA can You allocate during its activities?
Our organization is more than 20 years old, and all this time we prompted by all possible methods the development of agricultural industry of Ukraine. Our most important achievement is the market development of grain and, as a result, increase of grain export from Ukraine. On this way we participated in the development of laws and rules for effective functioning of the grain market, made recommendations of liquidation the unnecessary organizations and procedures, advanced Ukraine as full-fledged and civilized participant of world trade. Besides, there were a set of invisible actions which affected all agricultural sector.
First of all we are thankful to all the state bodies for support of our undertakings on deregulation. We are glad that there is no more State grain inspection which took money just because no other country of the world accepts their certificates.
Also, we have achieved the simplified quarantine certificates which aren't obligatory for grain movement within the country now. Also we are happy with an exception of paper turnover of rail waybills for transportations as they are all in electronic form. From the last of our achievements I would mark the cancellation of the No. 661 instruction of the Ministry of Agrarian Policy. Obligatory certification of elevators is cancelled. And this all has occurred because of that fact the Association is a member of working groups and the initiator of creation of these working groups under the Ministry of Infrastructure and the Ministry of Agrarian Policy, where we had an opportunity to express the opinion on improvement work in the grain market. Market liberalization which happens step by step instills confidence in investors and participants of the grain market.
- What methods of market participants lobbing interests do You consider to be the most effective?
In this field we aren't originals. We work in close contact with all ministries, embassies and other state bodies both in the territory of our country, and beyond it. Members of our Association have the international work experience in the different countries, and we implement the best practicing and experience in work with authorities.
The most effective method of lobbying interests is a publicity, and we try to inform our position openly everywhere. It concerns both work with executive and legislature.
- How do You assess the situation developed in this market segment at the moment?
The fact that Ukraine annually updates own records on export, demonstrates the correct dynamics of market needs understanding. These are the fruits of the adjusted long-term dialogue of all its participants. There is always a place to something new, especially during such rapid development of technologies. Our task is not to miss additional opportunities of the present for creation more favorable future. However, problems in the Ukrainian grain market still exist. Generally, it is cross-sectorial problems. First of all, it is logistics. In the second, financial component which consists in the financial pressure of the Public fiscal service, compensation of the VAT. In case of the solution these two components in the grain market of Ukraine everything would be much simpler.
As a variant of the logistic problems solution, we offered the ministry that businessmen on their own money constructed additional cars grain-carriers without involvement of public funds. At the same time, we asked about the clear payback period (today it constitutes more than 15 years).
We suggested to make discount in 30% for 5 years for wire payments for private cars. It would allow to make normal payback of cars, and in 5 years there would be also cars in the country, and the railway tariff would be general.
- What, in Your opinion, should be undertaken first of all for the achievement of higher rates of work on the grain market?
First of all we should create and guarantee equal and transparent conditions for all participants of the market. I would also refer the work of the Ministry of Finance, the Ministry of Agrarian Policy and Food, and the Ministry of Infrastructure to this point and all other authorities which are involved in forming business rules in Ukraine. I am very delighted to note that UGA has dense contacts with practically all above-mentioned organizations and what is more important -- mutual understanding of market participants needs.
- How much, in Your opinion, is the role of industry associations in development of the agrarian market, and Your Association in particular?
I can't call the exact criteria for evaluation of the industry associations multiplier, but I would highlight that market participants are undoubtedly more difficult to work and develop without it. Combination of efforts in the achievement of any purposes are always more effective, than separate attempts of everyone. Who else but associations, better know the needs of the market participants, being the essential constitute of any country’s economy. By the experience of developed countries it is obviously, that public organizations and industry associations also create the line item which considerate requirement of the economic system, and society in general.
Message to the market participants
Our mission is to create a balance in the relations between business and the authorities.
Our purpose – to create the comfortable conditions for business in the agrosphere.
We are so grateful to our participants! I am sure that our work finds a positive assessment at the vast majority among companies and any people involved in agricultural sector.
COMMENTS
Volodymyr Klymenko, General Director since 1998, and the President of Ukrainian Grain Association in 2006-2017
I don't think that most market participants in Ukraine understood clearly the role of the associations and their necessity yet in 1997 when UGA was being formed. Still, after its creation TACIS, one of the European projects invited me and group of Ukrainian specialists to London to share the experience of functioning professional associations in Great Britain. There we were explained the role of the associations in the industry development. First of all, the association should represent more than 51% of any economy sector. Thus, if it’s share is just 10-30%, there won’t be any success. Secondly, both the large and small organizations with the equivalent voting power can be members of the associations. The Association should be engaged in three main segments of work – lobbying the interests of it’s members, information support and training.
In 1998 we visited the USA, studied how agrarian associations work there. Here in this context, I can tell that Ukrainian Grain Association was created according to that principles. We determined that the agrarian sector as the key for our Association. We consciously selected the companies which were engaged in export and from the moment of creation, UGA represented the interests of 51% of grain market participants. In recent years we represented nearly 80%. Thus, we occupied our space.
Primarily, the companies-members of UGA are exporters of the Ukrainian grain and by- products. UGA was created when there was practically no grain for export in Ukraine. Nowadays Ukraine takes the third place in the world grain export and this unique result is achieved not without UGA.
