REUTERS
The largest decline in investment was recorded in the forestry and logging sectors.
Head of the Department of Investment and Logistics at the National Scientific Center "Institute of Agrarian Economics" Oleksandr Zakharchuk says the investment in agriculture, hunting and related services in January-March 2020 (Q1) shrank by 35% year-over-year (y-o-y), to UAH 7 billion (US$259.3 million).
"A 35.3% disinvestment in the agricultural sector of the economy over the three months of 2020 is one of the largest declines in investment in the past five years after the outbreak of hostilities in eastern Ukraine and the temporary loss [as result of the Russian occupation] of territories of the Autonomous Republic of Crimea and parts of Donetsk and Luhansk regions," the Center's press service quoted Zakharchuk as saying on May 28.
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The largest decline in investment in the agricultural sector was recorded in forestry and logging, where investment decreased by 67.1% to UAH 33.5 million (US$1.2 million) y-o-y.
"Such dynamics could be attributed to quarantine restrictions imposed by the government over the coronavirus pandemic. However, the decline in investment occurred even earlier, in 2019. It is the result of the government's inconsistent and imperfect investment policy in the agricultural sector, where the principles of residual allocation of budget funds for investment measures in agriculture dominate," he said.
Zakharchuk believes that the government should focus on implementing measures to increase the performance of agricultural enterprises and create an effective tool for state support of innovative and investment activities of agricultural producers to improve investment support of the sector.
The expert noted that, total capital investment in the national economy over the period under review amounted to only UAH 76.9 billion (US$2.8 billion), which was 29% down from UAH 108.3 billion (US$4 billion) y-o-y, according to the State Statistics Service.
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As UNIAN reported earlier, the government has fully preserved the amount of state support (UAH 4 billion/US$148 million) to farmers in 2020 after changes required to tackle the coronavirus spread in Ukraine had been made to the national budget. In particular, the funds were earmarked for such key areas as livestock, farming, and gardening, as well as compensation for the price of agricultural machinery and interest on loans.