Ukrainian farmers raise US$157 mln through crop receipts

Ukrainian farmers raised UAH 4.4 billion, or US$157 million, through crop receipts as of October 9.

"During the entire period of the use of crop receipts, 696 receipts worth UAH 4.4 billion have been issued, including 290 commodity receipts worth UAH 2.5 billion and 406 financial ones worth UAH 1.9 billion," the press service of Ukraine's Agrarian Policy and Food Ministry said in a statement on October 11.

In particular, 514 crop receipts totaling UAH 3.2 billion ($114 million) were issued to agricultural producers in January-September 2018, it said. "Some 74% of the total number of crop receipts have been issued this year. This shows that this financial instrument is effective and is becoming more popular with agribusinesses. Crop receipts are convenient due to their simplicity and speed of execution, as well as due to the fact that they meet the needs of small- and medium-sized businesses," the press service quoted Deputy Minister of Agrarian Policy and Food of Ukraine Olena Kovalyova as saying.

According to the official, crop receipts have covered a wide range of agricultural sectors, as this financial instrument is used by producers of grains and oilseeds, as well as those who are engaged in vegetable growing, gardening, and livestock breeding. Crop receipts were also issued for the future harvest of maize, wheat, peas, rice, milk, apples, watermelons and other crops put up as collateral, the press service said. In addition, financial receipts account for 60% of the total number of the crop receipts issued. As of today, obligations on 176 crop receipts totaling UAH 1.4 billion ($50 million) have been repaid, the ministry said.

As UNIAN reported earlier, the Verkhovna Rada, Ukraine's parliament, in November 2012 passed a law on crop receipts to let farmers use receipts as documents of title to goods. The mechanism of crop receipts is an alternative to bank lending. The Agrarian Policy and Food Ministry has repeatedly stressed an annual rate on loans issued by Ukrainian banks is too high for agricultural enterprises. Mostly manufacturers of grains and oilseeds use receipts.

However, demand for this tool is also growing among farmers who are engaged in vegetable growing and gardening. In 2017, the project was implemented in eight regions of Ukraine, namely Vinnytsa, Poltava, Cherkasy, Kharkiv, Mykolaiv, Sumy, Ternopil, and Khmelnytsky regions. A crop receipt is a document of title to goods that fixes the debtor's unconditional obligation secured by a future harvest put up as collateral. Using a crop receipt, a borrower can repay obligations either in cash or by farm produce supplies.

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