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Ukraine: Public-private policy dialogue in the dairy sector

Ukraine’s milk production has more than halved in the past 20 years, creating serious concerns for the Government. A FAO/EBRD dairy market study offered preliminary recommendations to address these concerns, including a greater focus on the sector couple with increased stability, and also identified the apparent need for more dialogue between the private and the public sectors.

In April 2013, FAO and EBRD gathered leading milk producers and processors, key industry associations, scientists, analysts and government representatives to discuss key issues that prevent the sector from developing more rapidly. The Minister of Agriculture, who chaired the meeting, pledged his full support for the establishment of a Ukrainian Dairy Sector Working Group (WG), which was officially formed in June 2013.

Shortly thereafter, the FAO/EBRD project “Public-private policy dialogue in the Ukrainian dairy sector” was initiated to provide technical support for the activities of the WG and ensure its efficacy. With the support of FAO and the EBRD and through effective dialogue, the WG seeks to develop transparent dairy policy mechanisms and commonly accepted milk market indicators, as well as to provide capacity development, solid market analysis and legal advice.

To improve the efficiency of the WG activities, four subgroups were created in May 2014 dealing with the following focus areas: (1) legislation improvements related to primary milk production, (2) dairy products, (3) taxes and regulations in the dairy sector, and (4) market and market prices.

Results-based dialogue of the Ukrainian Dairy Sector Working Group (WG)

Thanks to the WG, policy transparency and predictability have improved and numerous long-standing issues have been resolved. The WG met 12 times as of late January 2015. Working subgroups met 2-4 times per week from May – September 2014, which resulted in the development of the significant laws required by the European Union-Ukraine Association Agreement and which Ukraine had not been able to develop and pass in the Parliament for the previous five years.

The WG developed, significantly modified or contributed to five draft laws:

  1. “On Amendments to Certain Legislative Acts of Ukraine Concerning Identification and Registration of Animals”. The Draft Law has been approved by the Parliament and was signed by the President of Ukraine on 15 September 2014.
  2. “On Amendments to Certain Legislative Acts of Ukraine Regarding Food Products” The Draft Law has been approved by the Parliament and was signed by the President of Ukraine on September 15, 2014 and will come into force on 15 September 2015.
  3. “On Feeds”
  4. “On Amendments to Certain Legislative Acts of Ukraine (on improvement of legislation in the field of agricultural cooperation)”
  5. “On Production and Turnover of Organic Agricultural Products and Commodities” where it relates to the use of work “bio” usually “bio-yogurt” or “bio-kefir”

FAO/EBRD support to the Ukrainian dairy sector and the WG

Together with the Association of Milk Producers of Ukraine, FAO and the EBRD have carried out a fundamental market study which helped to determine the key issues facing the dairy industry.

The FAO/EBRD team also developed an automated milk and dairy products balance system to engender greater market transparency. The system is updated monthly and provides a forecast for the upcoming season. It is already actively used by the businesses in the dairy sector as well as the Government of Ukraine.

In December 2014, FAO and the EBRD organized a study tour to the US for Ukrainian dairy farmers, industry associations and policy makers. The group visited several farms in Illinois, Wisconsin and Minnesota as well as two dairy cooperatives, a dairy processing plant, extension services and the University of Wisconsin, where met with a number of leading industry experts. The tour helped discover new approaches for dairy business development in Ukraine, which should lead to better quality and higher efficiency of milk production.

In March 2015, FAO and the EBRD supported the largest ever dairy industry event, the Dairy Congress in Kiev. It was organized by the Association of Milk Producers of Ukraine and gathered more than 1 000 Ukrainian industry experts and many dairy specialists from various countries.

Project Leader:

Andriy Yarmak; Andriy@Yarmak@fao.org

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Useful resources
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Milk Supply and Demand Balance System Eng URL Download
Association of Milk Producers of Ukraine Ukr URL Download
Strengthening Ukraine's Dairy Sector- video Eng URL Download
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