Ukraine : The Agriculture Sector in Transition Book

This report describes the current status of the food and agriculture system and the ongoing process of transformation in the Ukraine and it also provides an agenda and recommendations for continuing sectoral reform. The food and agricultural sector has greater economic potential in Ukraine than in any other region of the Former Soviet Union (FSU). Performance of the sector, however, has been far below potential. Ukranian agriculture still exhibits the major hallmarks of the Soviet system. Most of the production is organized in large-scale state farms and collectives. The decline in production is a reflection of the deterioration of the overall economic situation of the FSU: high inflation, worsening terms of trade for agriculture, reduced availability of vital inputs, overall decline of real wages and domestic demand, and the collapse of intra-regional trade. The Government has moved cautiously in reforming and restructuring the food and agricultural sector. To continue the effort and develop a reform strategy, the report makes the following recommendations: 1) the continuation of market and price liberalization and subsidy reduction; 2) restructuring and privatizing the agricultural distribution and processing system; 3) reform of the agricutural credit system; 4) land reform and farm restructuring; 5) investing in, and improving, farm productivity and efficiency; 6) restoring international trade; and 7) defining new roles and structure for the government.