Ukrainian govt should revise fuel excise taxes, import duties on fertilizers to support agricultural sector – UCAB
Reducing fuel excise taxes, abolishing import duties on fertilizers, and imposing a moratorium on railway tariff increases are three critical steps for the survival of the agricultural sector amid the energy crisis, said Oleh Khomenko, CEO of the Ukrainian Agribusiness Club (UCAB), during an economic review by the Centre for Economic Strategy (CES).
According to him, Ukraine's fuel excise tax is currently among the highest in Europe, while in the EU a zero rate for farmers is widely used as a form of indirect state support.
"We understand the budget deficit and our obligations to partners. But this is precisely the moment when reducing the tax burden on fuel can mitigate risks to food security," Khomenko said.
He also separately highlighted the issue of fertilizers. With domestic consumption at 4 million tonnes, Ukrainian plants produce only about 1 million tonnes, forcing farmers to purchase imports in foreign currency at prices driven by more expensive gas.
"We propose considering the abolition of the import duty on fertilizers. Today it is about 5%, but even such a step would be a significant compensation for the extremely difficult conditions in which agribusiness now finds itself," the UCAB chief said.
In addition, Khomenko called on the authorities and Ukrzaliznytsia to stop the practice of subsidizing other industries at the expense of agricultural producers through tariff disparities.
"The tariff for transporting bulk agricultural cargo is currently higher than for metallurgists or construction companies. We insist on a transparent approach: one category of goods should not subsidize another. In a crisis, increasing logistics costs for the agricultural sector is simply unacceptable," he said.
Khomenko expressed confidence that the combination of these three factors – taxation, duties, and logistics – would help stabilize the sector, which remains under pressure due to the prolonged fuel crisis and the uncertain pace of market recovery.