The head of one of Ukraine's major farm operators has warned of a potential "collapse" in the country's grains production if it does not repeal quotas which could cost farmers up to $1.3bn.
Eugene Leng, the chief executive of Ukrzernoprom Agro warned that a fall in sowings of winter crops would herald an even greater drop in spring plantings unless the government lifts the quotas which are denying farmers the full benefit of high world crop prices.
Mr Leng - a former journalist who helped set up Ukrzernoprom Agro 10 years ago, and who was decorated for his services to farming by Ukraine's former president, Victor Yushchenko ?conceded that the export curbs had "played a role in stabilising the domestic food market".
However, the quotas, which have been extended until the end of March, were a "major impediment" to farmers, who were also facing a dearth of subsidy support and, in with their finances deteriorating, growing difficulty in obtaining loans from banks.
'Significant losses'
"The absence of free grain exports is causing significant losses to farmers," Mr Leng said, estimating the losses could reach 10bn hryvnia, ($1.3bn).
"With no funds available for villages in the state budget, rural residents are dealt a heavy blow."
He attributed a fall in winter sowings, estimated by UkrAgroConsult on Tuesday at 3.0% for wheat and 24% for both barley and rapeseed, to "confusion" among farmers over their prospects.
"If quotas remain intact then there will be even greater reduction in spring wheat, barley and maize [corn]," Mr Leng said, adding that they threatened a "collapse of grain production this season".
'Deficit of working capital'
The comments follow a warning from UkrAgroConsult itself about farmers' shortage of cash, saying they faced a "deficit of working capital" which could "seriously hamper growing operations in spring and summer".
Limitations on many farms' ability to afford higher priced fertilizers and agrichemicals "will substantially reduce the grain yield potential of both winter and spring crops", the influential analysis group added.
However, it highlighted the late arrival of rains to break last summer's drought as a reason for the drop in autumn seedings, denying many farms adequate soil moisture until well after the optimum planting period had passed.
And, despite its reservations, UkrAgroConsult forecast Ukraine's total grains harvest rebounding by nearly 18% to 46.2m tonnes this year, including a 22% rise to 21.0m tonnes in wheat production.
Quotas handed out
Ukraine's parliament last month approved the extension of export quotas until the end of March, adding a further 1m tonnes of corn and 500,000 tonnes of wheat to permitted shipments.
Earlier this week, Ukraine said that it had distributed this extra wheat export quota among 15 companies, with Khleb Investbud recieving the lion's share, at more than 221,000 tonnes, Kernel being awarded 46,100 tonnes and Volary 31,400 tonnes.
Ukrzernoprom Agro, whose holding company MCB Agricole is listed in Frankfurt, farms some 100,000 hectares, with barley, rapeseed, sunflowers and wheat its biggest crops.
