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Yanukovych pledges to boost food exports
Journal Staff Report

NEW YORK, Sept. 22 – President Viktor Yanukovych, whose government has been unofficially restricting grain exports since the end of July, said his plan was to make Ukraine one of the world’s largest producers and exporters of food.

Yanukovych made the statement on Wednesday while addressing the United Nations General Assembly in New York.

“I am convinced that in the near future, due to powerful agriculture potential, our country can become an important element in global efforts at overcoming hunger in a number of the world’s regions,” Yanukovych said in the address.

Yanukovych said Ukraine was a “responsible” partner in helping the world to overcome the food crisis.

Serhiy Liovochkin, Yanukovych’s chief of staff, said the idea was to make Ukraine the world’s No. 5 producer and exporter of food. “Let’s get down to business,” he said.

The disclosure of the ambitious plan comes a day after Yanukovych issued a number of orders – to officials ranging from the prime minister to the prosecutor general – urging them to take measures to improve domestic food security.

The efforts were aimed at increasing the role of the government in grain trading to try to slow down price increases after a number of food staples have showed some rapid price growth over the past month.

The orders go in line with Yanukovych’s instructions in July to make sure that the government buys up to 4.5 million metric tons of grain “to provide for the country’s food security.”

The increased role of the state in the agriculture sector is an indication that the government has not been committed to reforms that may in fact stifle production of grain and other commodities.

Under the presidency of Yanukovych’s predecessor Viktor Yushchenko, a pro-Westerner and a committed supporter of free market enterprise, Ukraine has become the world’s third largest exporter of grain.

But that very status has now been challenged by the Yanukovych government, which has been unofficially restricting grain exports from Ukraine since the end of July.

The restrictions, which affected some of the world’s biggest grain traders, such as Alfred C. Toepfer International, Cargill A.T. and Serna, a subsidiary of Glencore, are estimated to ha overall losses for the sector at 1 billion hryvnias, according to industry analysts.

The State Customs Service has been blocking at least 24 vessels with grain for exports without any official explanations as of Sept. 8, according to the Ukrainian Grain Association.

Some of these vessels have been waiting to sail since July 28.

The delays have been affecting not only grain traders, but also Ukrainian farmers that could not take advantage of strong prices on world markets.

The grain exports were restricted as the State Customs Service has been requiring some addition quality checking and certification, a non-transparent process that has allowed officials to postpone any shipment of grain.

The State Customs Service denied slapping any special rules blocking the grain exports.

Meanwhile, the Grain and Feed Trade Association, or GAFTA, has recently drawn the attention of the World Trade Organization and the European Union to the obstacles to grain exports from Ukraine.

"GAFTA closely follows the principles of the WTO for liberalized trade and is very concerned to note these recent developments in Ukraine," Volodymyr Klymenko, the president of the Ukrainian Grain Association, said.

"The procedures do not follow the legislation; the tests are not based on sound scientific methodology nor are any known acceptable sampling methods followed," he said.

Klymenko, who wrote letters to Yanukovych and other senior government officials last month, warned that the failure to react would force the grain traders to sue the government in London.

"The people who manage the process have learned nothing," Klymenko said. (tl/ez)




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