Ukraine: Reinforcing Public-Private Dialogue in the Grain SectorUkraine: Reinforcing Public-Private Dialogue in the Grain Sector

Since 2009, FAO and the European Bank for Reconstruction and Development (EBRD) have been working in Ukraine to create open dialogue between the public and private stakeholders in the grain sector. Ukraine has a major role as a global grain exporter and it still has potential to grow, which makes transparency and efficiency key sector improvements. FAO and EBRD recognized the importance of facilitating open dialogue between the private and the public sector stakeholders in the grain sector. In 2011 they commenced the joint project Reinforcing Public-Private Dialogue in the Ukrainian Grain Sector with primary activities of (i) setting up a consultation process, and (ii) providing continued support for improving transparency in key data collection systems on the grain sector in Ukraine.

Results: Since 2010, the EBRD/FAO-led Ukrainian Grain Working Group (WG) has provided a platform for policy dialogue. Thanks to the WG, policy transparency and predictability have improved, in turn increasing investor confidence. The platform, now run by the industry, has demonstrated that targeted policy dialogue between the industry and the Government can improve the business climate and bring about specific sector reforms. A tangible result has been the discontinuation of past practices of imposing damaging export restrictions. This has helped reduce volatility in the business environment as well as corruption that often accompanies such measures. Reduced export volatility has also helped global trade and importing countries in particular.

Specifically, the Ukraine Working Group, which has historically focused on grain exports, can claim major results: (a) a Memorandum of Understanding (MoU) between the Ukrainian Ministry of Agrarian Policy and Food and the grain industry that requires the Ministry to provide a prior notification to and to engage in consultation with the industry in case of possible export restrictions; and (b) increased efficiency in state testing requirements to certify grain without delays, greatly facilitating grain transportation and exports in peak times.

Topics: Since the first meeting, the WG has officially met over a dozen times. Meetings of the WG are often chaired at a deputy and/or first deputy minister level and recently topics have included international and domestic grain market perspectives; Ukraine’s grain market needs and export potential for wheat and corn; possible export restrictions; needs for a more efficient grain transportation system (using unit train shipment by Nibulon, an existing EBRD client, as an example); shortage of grain wagons at the Ukrainian Railways; reduced state testing and certification requirements for grain; and pre- and post-harvest financing options. Although the parties of the dialogue could not always agree, discussions have been institutionalized, open and transparent.

Members: Private-public sector platforms are industry-driven, with the participation of all stakeholders (including relevant government ministries/agencies, market participants and IFIs). International organizations – namely the EBRD, FAO and the World Bank – have played key roles in bringing all stakeholders together and helping the start of the dialogue. The objective has been to improve the business environment by removing jointly identified policy obstacles to trade and investment in the sector. The forum gives strong voice to private sector views and concerns in an objective manner, while advancing standards for public governance. Demonstration effect: An important indicator of success is the demonstration effect. In May 2013, Ukraine’s dairy industry representatives and the government requested that EBRD lead the establishment of a similar Working Group for the dairy sector in Ukraine. Public-private partnership is also planned to start in Egypt following up on recommendations of the meeting in Cairo in June 2013. The latter was an example of how success from the transition region can directly be transported to support policy reform in the new transition region SEMED. A Letter of Intent was signed in Cairo by the EBRD, FAO and the Ministry of Agriculture. The new public-private platform in Egypt will focus on grain import inefficiencies and improvements of trade logistics through private sector investments. Similar private-public platform initiating meetings are also planned in Serbia.