IVAN MIROSHNICHENKO People's Deputy of Ukraine SAMOPOMICH PARTY - - PowerPoint PPT Presentation

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IVAN MIROSHNICHENKO

People's Deputy of Ukraine SAMOPOMICH PARTY

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)

Committee considered above 300 draft laws. The main focus:

• Deregulation of production, processing and logistic processes;
• Change of tax regime and state support of farmers;
• Development and support of family farms;
• Implementation of EU regulation of identification and registration of agricultural

animals;

• Law on seeds and hybrids regulation
• Adaptation to EU regulation of quarantine control, plants and animals control;
• Improvement the legislation about safety and hygiene of feed;
• Melioration and irrigation of soil;
• Land market;
• Resistance to "agrarian raiding”, anti-raiding legislation.

The number of draft laws submitted to the Parliament Rada for consideration with the positive opinion of the Committee is more than 160. Adopted as laws – 24*

• Law efficiency of passing of draft laws through the Parliament
• Savings on costs – 5-6 billion UAH per year

Mr Miroshnichenko is co-author of 8 from 24 agricultural laws which are adopted by Parliament

Parliament Committee on Agrarian Policy and Land Relations

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3 

1) State budget supporting programs should be changed!!!

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A) Return of VAT reimbursement on oil crops export, such as soy and rape (draft law No. 7403-2)

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B) Return of replacement of the program of financial support to agricultural producers (like ex-special VAT regime)

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C) In 2018 the program of partial (25%) compensation of the cost of agricultural machinery and equipment of domestic production allocated 945 million UAH.

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D) The other program of almost 4 bil UAH provides support to animal production sector and is products

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2) Tax policy

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A) Law on tax on the withdrawn capital is planning to be registered and could be adopted by parliament

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B) Keep good progress on VAT reimbursement !!!

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C) The State Fiscal Service should strengthen control over the payment of all types of taxes

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D) In 2017 Parliament registered a draft law which proposes to set an internal VAT rate of 10% on meat, dairy products, chicken, vegetables, cereals, flour mills and other products

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E) Laws which minimize «the gray-market» of agrarian production and land operation

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3) Currency regulation

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Two alternative laws of currency regulation change were registered liberalizing investment climate.

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For example:

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ex-regime of permission should be replaced by the new regime of informing of state bodies about the market operation with foreign currency;

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residents and non-residents will be equal in their rights;

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• pportunity to make investments in any foreign country, etc

WHERE WE CONCENTRATE IN 2018

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WHERE WE CONCENTRATE IN 2018

 4) Privatization  A) The Law «On Privatization of State and Communal Property» was

adopted in January.

 B) The State Property Fund approved the list of enterprises for

privatization in 2018. This is a list of nearly 100 state entities that are classified for privatization. «Agrarian Fund» and «State Food and Grain Corporation of Ukraine» were among them, but Government has taken them from the list for privatization.

 5) Concession  A) The Law «On the concession» was adopted in a first approval in April.

Needs second approval.

 B) It is planned to transfer Ukrainian state ports exclusively to long-term

concessions (for 25 or for 49 years). Roads, some energy infrastructure can be managed by concession platform

 6) Logistic development and emergency plan  7) Continue with deregulation and business environment protection and

liberalization

 8) Land Reform!!!

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Oil wars – one of the main topics for agricultural sector

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• On

December, 7 Parliament adopted “oil amendments”, which cancelled VAT reimbursement of oil products export . Illegally passed and discrimination of sector!!!

• Agrarians were categorically opposed this decision so they had to use radically actions
• During December – April agrarians organized road blocking in more than 10 regions of

Ukraine

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Oil Oil war ars s

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• The agrarians held two All-Ukrainian Agrarian Meetings, where they

expressed strong demands for state bodies. Strikes at Parliament.

• Law 7403-2, which was supported by all the leaders of agrarian associations
• Loss for farmers on soy and rape of cancelling VAT reimbursement is around

7-8 billion UAH per year

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Raiding and illegal seizure of property

• During 2017 there were more than 500 cases of raider attacks
• A Public sector has fixed a lot of attacks on small and medium-sized farms and

even on food processing industries

• Almost

all cases are “covered” by authorities, police, administrations, prosecutors

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The following laws were adopted:

“On Amendments to Certain Legislative Acts on Facilitation of Business (Deregulation)” No. 191-VIII dated 12.02.2015 A number of licenses, authorizations, and certificates in the veterinary and sanitary regulation were canceled “On Amendments to the Law of Ukraine "On Plant Quarantine" (Concerning the Reduction

• f

Administrative Burden) No. 617-VIII dated 15.07.2015 (authored by І. Miroshnichenko ) Requirement for mandatory quarantine certificate for internal grain transportation was abolished; issue terms for phytosanitary and quarantine certificates were reduced by 3 times from 3 days to 24 hours. “On Amendments to Certain Legislative Acts of Ukraine Regarding Deregulation in the Agro industrial Complex” No. 867-VIII dated 08.12.2015 (authored by І. Miroshnichenko ) 22 authorization procedures and requirements for economic activities were canceled and limited “On Licensing Certain Types of Economic Activities”

• No. 222-VIII dated 02.03.2015

A number of licenses in the agro industrial complex, in particular, marketing licenses for pesticides, agrochemicals, livestock resources, production and distribution of veterinary medicinal products and drugs were canceled

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The following laws were adopted:

“On Amendments to Certain Laws of Ukraine Intended for Harmonization of Ukrainian Legislation for Seeds and Seedlings in Line with European and International Norms and Standards” No. 864-VIII dated 08.12.2015 (authored by І. Miroshnichenko ) The system of certification of seeds and confirmation

• f its conformity has been improved, the registration

procedure of plant varieties has been improved “On Amendments to the Land Code of Ukraine on the Operation of Land Auctions”

• No. 1012-VIII dated 18.02.2016

A number of provisions which established cases of non-competitive sale of state or communal land or land rights was excluded.

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Draft Law on Amendments to Certain Legislative Acts of Ukraine to Resolve the Issue of Collective Ownership of Land, Improvement of Land Use Rules in Areas of Agricultural Land, Prevention of Raidership and Stimulation of Irrigation in Ukraine No. 6049-d dated 26.12.2017 (authored by І. Miroshnichenko ) The draft law offers an effective mechanism to resolve the land use optimization issues within the whole land, preventing raider attacks, removing lattice block design and stimulating irrigation development. Draft Law on Amendments to Certain Legislative Acts of Ukraine on Land Resources Management within the Territory of the Unified Territorial Communities and the Settlement of Other Issues in the Area of Land Relations No 7118-1 dated 04.10.2017. It is proposed to authorize the united territorial communities to manage lands outside of settlements (except for of defense lands, natural reserve and other environmental lands). Draft Law on Amendments to the Land Code of Ukraine and Certain Legislative Acts of Ukraine Concerning the Stimulation of the Creation and Development of Family Farms and Termination of Corruption Abuse in the Sphere of Management of State and Communal Land No. 7060 dated 04.09.2017 (authored by І. Miroshnichenko ) Draft Law provides the introduction of auctions. In these auctions the citizens of Ukraine, who are members of family farms and at the time of the auction cultivate less than 20 hectares of land, can

• nly participate.

Draft laws in the agro industrial complex, which are under consideration at Parliament

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Economic policy: 1. Draft Law on Capital Markets and Regulated Markets No 7055 dated 01.09.2017 . Infrastructure: 1. Draft Law on Amendments to Certain Legislative Acts of Ukraine on Improvement of Legislation in Compliance with Weight or Dimensional Standards, No 4660-1 dated 27.05.2016. 2. Draft Law on Amendments to Certain Legislative Acts of Ukraine on the Settlement of Urban Planning within Seaport Areas, in the Area of Navigation Equipment Activities and Maritime Traffic, No. 5431 dated 18.11.2016 . 3. Draft Law on Inland Water Transport, No 2475а dated 04.08.2015. Ecology: 1. Draft Law on Amendments to the Law of Ukraine "On Regulation of Urban Development" on improvement of investment opportunities in the production of electric power from alternative sources, No 6081 dated 13.02.2017 (adopted in the first reading) Business protection from abuse of law enforcement officers and counteraction to raider attacks: 1. Draft Law on Amendments to Certain Legislative Acts on Enforcement of Rights of Participants in Criminal Proceedings and Other Persons by Law Enforcement Agencies during Pre-Judicial Investigation No. 7275 from 10.11.2017 (adopted as law) 2. Draft Law on Amendments to the Land Code of Ukraine and Certain Other Legislative Acts against Raiding No 8121 dated 14.03.2018

Other laws, except for AIC, authored or co-authored by І. Miroshnichenko:

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LAND REFORM

Ivan Miroshnichenko concept

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Is there a consensus in society and business: to open land market?

NO! WHY? FEARS!!!

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• Don’t think we should start land market from State owned land.

Only rent rights of State land can be sold (auctioned) or used for pilot project.

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Distribution of enterprises engaged in agricultural activity, by agricultural land's size

71,2 % of all farm entities have arable land area below 10kha

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Crop production by different area of agricultural farms

Farms of area category 50ha - 10kha produce of 68,3 % of total grains and leguminous in Ukraine

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Мilk (73,9 %)

Householders Agricultural enterprises

Householders niche in gross production

Beef and Veal ( 4 7 % )

Household ers Agricultural enterprises

Fruit and vegetable crops( 6 4 % )

Householders Agricultural enterprises

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Reform or cemetery?

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Reform or cemetery?

2) There are 6,8 mln. owners

• f land plots in Ukraine

But the 1 million of them are already died 3) The non-inherited land plots cover the square of 1,5 mln hectares 1) The hidden land market is really existing 5) 33,4 mln hectares of arable land

More than 400 000 Ukrainians didn‘t get a possibility to be a real

• wner of their land plot and

couldn’t inherit it to anyone The owners, country economy system, business, state don’t use the land as an asset or instrument

4) Moratorium 100-150 bln USD

• f investments*

* 1 hectare of agricultural land could attract from 2200 to 4300 USD per HA of

• investments. Also a billions of USD could be invested in logistics, processing

industry, infrastructure, markets and port terminals

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Ukrainian national antilogic:

• The moratorium is valid for almost 20 years, everybody criticizes the

resultant situation in agro sector, but it is still in force & nothing new

• ffered. Things are bad but let’s do nothing. Keep the same moratorium!
• Farmers working on the land “artificially persuaded” to be against the

market, but want to be land owners to transfer their lands to children as inheritance

• Although the land market is officially limited by the moratorium, the gray

market is doing well with 3-4 schemes of working by-passing the

• moratorium. Millions of hectares were privatized

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Ukraine should have its own way of the land reform

 The Ukrainian way should be based on the present structure of our

production and the present economic and social situation

 The fears of each market participant should be removed, and

everybody should be provided with alternatives and options and have the confidence of development opportunities on their own land to establish own production

 IMF and Government opinions are important, but the level of the

land reform can be compared with the decision of “war and peace” for our society. People should understand and support reform

 One should note that there is enough place on the market and on the

land itself for everyone: family farms, small and medium-sized farmers, agro holdings, but everybody should pay taxes and equal rights and support

 All existing drawbacks of the market and production structure can

and even should be adjusted. There is no need to break anything, market structure just should be corrected

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The Land Reform: national integrated solution (concept of I. V. Miroshnichenko)

There are 4 blocks of questions, the complex and simultaneous solution of which is the key to success of the land reform:

• 1. All blocks should be specified in bills and adopted in 2018 as one "package", however, the implementation should be dissolved in

time.

• 2. This concept is based on the economic, political realities, takes into account the structure of the agrarian market and the existing

"fears" of the subjects of land relations, landowners.

• 3. The concept was discussed with representatives of the IMF, the World Bank and presented during meetings with owners of land

shares and agrarians. It found general support among them.

Legislative block 1: support for Ukrainian landowners (enters into force as of 01.01.2019) State financial support for creation of small farms, family farms by the owners

• f land shares. National program of

support (the duration of 2-3 years), that foresees provision of funds to citizens on a collateral basis (land mortgage) for financing typical competitive projects with a high level of localization (75%), in particular, for the

• rganization
• f

greenhouse farms, dairy farms of the family type, gardening, berry picking, vegetable growing, etc. The funding should be long-term (10 years +) and with low interest. Advantages:

• 1. The alternative for selling! In case of

lack of funds to organize own business

• n citizen`s own land.
• 2. Elimination of political manipulations

that after the market

• pening

the citizens` lands will be massively bought up.

• 3. The increase in employment in rural

areas and the development

• f

infrastructure.

• 4. The development and support to
• ther branches of the economy due to

the high level

• f

localization and investments. Legislative block 2: first stage - limited land market (enters into force as of 01.01.2019) Pilot and limited opening of the land market for agricultural use exclusively for natural persons-citizens of Ukraine and Ukrainian legal entities with the limit of land`s area owned by one person from X to Y ha. The establishment

• f

minimum prices (state`s priority to ransom land by this price). Advantages:

• 1. The citizens` constitutional right to

dispose of their property.

• 2. Conditions for legal sale or mortgage
• f land with the aim of obtaining

financing for own agribusiness. 3. Creation and development

• f

"culture" of the landowner.

• 4. Implementation of agreements with

IMF. State-owned land will not be the object

• f sale-n-purchase. The issuance of land

bonds (other financial instruments) for 10-12 years for placement on financial markets and securing state-owned agricultural lands. The lease of state land will be sold through auctions. There is also a preliminary agreement from the EBRD side, IFC to provide long-term mortgage loans for the purchase of land. Legislative Block 3: Strengthening Land Leasing Institutions and emphyteusis (enters into force as of 01.01.2019) The introduction of effective, clearly regulated in the legislation regulatory mechanisms for the development of the land lease market, emphyteusis, ensuring the possibility of selling lease rights and emphyteusis, as well as their mortgage (mortgage). Providing mortgage financing

• f

redemption of land shares. Advantages:

• 1. Structuring the redemption of

plots/shares under its mortgage. Providing farmers with access to financial resources in case

• f

necessity to buy

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leased plots/shares.

• 2. Producers of agricultural products

(users, leas) will have the opportunity to sell the rights of use, lease of land, transfer and deposit them in the bank, receive mortgage loan for business development and further purchase of land. At the same time, state and private banks should provide long-term and preferential (by low interest rates) mortgage loans for which the tenant, having made the first contribution of 20-30% of the cost of land, could take a mortgage loan for 10 years or more for its redemption. Legislative block 4: the second stage - completed land market (enters into force as

• f

01.01.2022) X years after opening of the limited land market we shall decrease the limits of the area (of the land) owned by one person to Z ha. In Y years the right to purchase land will be provided to foreign citizens: a) only for agricultural commodity production, with limits of the land area owned by the foreigner; b) if foreigner resales land, citizen

• f Ukraine has the priority to

purchase it. Advantages:

• 1. Encouragement of investments,

increase of cost and liquidity of land. 2. Increase in the cost and capitalization of agrarian business. * Safety precautions: Max. square in

• ne's

hands; concentration within the area; prohibition of resale, prohibition of change of intended purpose for a certain time; etc. - at the discretion of members of Parliament.

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IVAN MIROSHNICHENKO THANK YOU!