OREANDA-NEWS. July 08, 2011. The introduction of full private ownership of land in the agricultural sector can involve up to 80 billion UAH per year, that is almost completely cover the needs of agrarian and industrial complex. The Minister of Agrarian Policy and the Food Mykola Prysyazhnyuk declared this. As he said, the basic sources of loans can become bank credits, a part of the international loans of Ukraine and means of the international investment companies.

The Head of the Ministry of Agricultural Policy said that even in the best for the Ukrainian Agriculture 2008 year in agriculture it was managed to attract only 20 billion UAH loans for technological needs 100 billion UAH per year. "That is only 20 % from demand for operational expenses in branches and only 4 % of the general credit portfolio of banks. This disparity confirms the presence of risk, especially for investment "long money" in agricultural production", - Mykola Prysyazhnyuk said.

He said the introduction of a fully institute of land ownership will significantly reduce these risks, and therefore will attract additional investment in agriculture. "In the largest accounts, today farmers have the only liquid asset - agricultural land, which also is not involved in agricultural production", - the Minister said.

According to the calculations of the Ministry of Agrarian Policy and Food, even the current agricultural land value at 10 thousand UAH per hectare can be fully provide the liquid mortgage for banks as use of the land as the pawning in the ratio one up to two give producers the way to get up to 5000 UAH per hectare. "If we introduce the refinancing of commercial banks by the National Bank of Ukraine at the reduced rate for lending to agriculture target, they could give credits at the interest rate 10-12% per annum, which is absolutely acceptable for the industry", - Mykola Prysyazhnyuk said.

Other mechanisms for attracting investments in agriculture - the use of borrowed from international financial organizations funds, which amount may be about 2-3 billion dollars per year, and funds from international investment companies that are involved in Ukraine under the Government or large Ukrainian companies’ guarantees. This is potentially another 5-6 billion dollars a year.

"Total borrowing by all sources can be up to 80 billion. per year, with equity investors virtually ensure farmers in need of financial resources ", - concluded Nicholas Prysyazhnyuk.

"The total sum of loans from all sources can reach up to 80 billion UAH per year, that together with own funds of investors practically completely will provide demand of agricultural producers in financial resources", - Mykola Prysyazhnyuk concluded.