Workshop Enhancing Policy Dialogue in the Sunflower Oil Sector Kiev, 31 June

1
Workshop Enhancing Policy Dialogue in the
Sunflower Oil Sector Kiev, 31 June 1 July,
2004

• Jean Balié
• FAO
• Policy Assistance Division

2
Rationale and Justification

• Agriculture policies strongly influence sector
  performance
• Existing policies suffer from lack of
  consultation between sector stakeholders
• Inconsistent policy framework resulting in
  unstable environment for growers and crushers
• FAO is recognized as neutral partner to promote
  dialogue between sector stakeholders

3
Objectives

• Improve policy dialogue between stakeholders
• Present a review of the oilseed production and
  processing sector
• Identify critical issues for the whole sector
• Introduce current policy issues
• Discuss main policy options /recommendations
• Propose scenarios for the way forward
• Enhance transitional impact of EBRD investment

4
Expected outputs

• Diverse viewpoints presented
• Alternatives of stakeholders discussed
• Dialogue initiated
• Preliminary policy options proposed

5
Proposed approach

• Gather all stakeholders
• Provide a general overview of the sector
• Present critical issues
• Introduce each issue through
• four background papers
• extensive collective discussions
• shared conclusions

6
People and institutions involved

• Partners/facilitators
• EBRD
• FAO
• UNDP
• UkrAgroconsult

• Stakeholders
• Ministry of Agrarian Policy
• Farmers organizations
• Crushers organizations
• Companies
• Traders/brokers
• Banks

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Organization / Schedule

• General introduction
• Round tables involving
• Speaker/presenter
• Moderator
• Panelists
• Participants
• Specific issues
• Wrap-up session
• Synthesis and conclusions

• Prog_eng.doc

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Conclusions 1/2

• A two-days workshop to start a process ....
• Launch the second workshop
• present individual positions
• adjust issues
• seek in depth discussions
• deliver common positions and options
• Prepare the third workshop
• build consensus
• propose policy options
• design a possible way forward

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Conclusions 2/2

• Our aim is to
• Facilitate the process of reforms
• Involve all stakeholders
• Shape a different policy framework
• Give momentum to dialogue
• Support implementation of agreed policy options
• Provide new opportunities for
• farmers
• crushers
• investors
• and policy makers...

10
Thank you!
11

• Annexes

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Issues raised for policy dialogue in Phase 1
Output Report prepared in English distributed to
the Government (MAF), EBRD, processors and
farmers representatives
Conclusions Farm level. Lack of working capital
forces farmers to sell crop immediately after
harvest at low prices Taxation. Export tax of
17 reduces domestic price of seed Crushers.
Failure to reimburse VAT on exported oil products
causes financial burden on crushers
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Recommendations made in phase 1

• Initial recommendations to Government
• improve law on warehouse receipts (so that seeds
  can be used as collateral) ? improve farmers
  access to ST credit
• reduce gradually export tax ? fairer seed prices

• disconnect VAT system from farm subsidy system,
  move towards direct payments ? less distortion
• prompt VAT repayment to crushers ? improve
  crushers margins

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Next step for a better policy dialogue
Next steps moving towards phase 2
Ensure Government support Ukrainian MAF
acknowledges FAO recommendations
done
Launch phase 2 Have phase 1 conclusions publicly
discussed by all stakeholders. Have consensus
solution endorsed by all parties to serve as
basis for policy-makers (in collaboration with
World Bank)
Raise donor support