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1 Report on activities carried out during the reporting period 10

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1.6. Sector context
Specific Objectives
1.8. Expected results and main activities
Project components & indicative activities
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1.6. Sector context


The agricultural sector in the Ukraine makes up a significant portion of the country’s GDP (14, 5%). The sector is a major employer (about 20% of the national labour force) and is the main source of income for the majority of Ukraine’s rural population. With over 30 million ha of arable land of which over 50% composed of very fertile black soil, the sector’s economic potential is however largely underutilised. The sector suffers from low operational and economic efficiency due to overall low productivity, high production costs, scattered farm structures, outdated technologies, and overall poor farm management.

Little change in agricultural policy concepts and planning has occurred since 1992. To date, Ukraine lacks a coherent agricultural and rural development policy framework. Key structural issues like: rural socio-economic development (with 1/3 of the population living in the rural areas), sector competitiveness, the institutionalisation of food safety and quality (including sanitary and phyto-sanitary control), have largely been neglected. Consequently with the demise of the agricultural sector, the socio-economic situation in rural areas is worsening, causing ongoing depopulation, increasing levels of rural poverty and food safety problems, degradation of the environment, of farm land biodiversity and the rural landscape. In a recent Resolution (23 September 2005), the Ukrainian Parliament had to finally acknowledge the critical situation of the agricultural sector and the rural areas, and the need for reform.


However, unlike in the past, reform of the agricultural sector cannot be automatically linked anymore with socio-economic development of the rural areas; as was experienced in Europe after it has gone through several agricultural reforms. This was further confirmed in the EU Agenda 2000, when alongside the common organisations of the market that constitutes the “first pillar” of the Common Agricultural Policy (CAP), rural development policy was solely placed as the “second pillar”. The main purpose of this second pillar is to improve the economic, social and environmental situation of all rural areas in a context of sustainable development; independent from the development of the agricultural sector. With the introduction of the first pillar for agriculture - without compromising EU’s role of ensuring the supply of affordable food and providing a reasonable standard of living for EU farmers - more attention than before is paid to food quality and safety, environmental protection, animal health and welfare.


3. Description


The project will aim at implementing an agreed sector-wide programme (based on SWAP) in the development of an agricultural, food safety and rural development policy and strategy, thereby allowing the Ukrainian government to federate its own and foreign donors’ efforts into a coherent policy framework based on EU policies.

Keeping in mind Ukraine’s WTO aspirations, the implementation of the WTO and the ENP Action Plan commitments will be considered altogether by the project.


1.7. Objectives


The overall objective of the project is to implement Ukraine’s commitments under WTO and ENP framework.

Specific Objectives


The specific objective of the programme is to develop a common framework approach and understanding of the priorities and issues in agriculture, food sector and rural areas, through:
  • Facilitating a common understanding and approach between the EU and the Government of Ukraine, in development of the agriculture and food sectors and addressing key issues of rural development;
  • Facilitating a common understanding and approach between the EU and the international donor community, minimising duplication and overlap, to ensure greater co-ordination and consensus on the priority issues for development in agriculture, food and rural areas, in partnership with government.


In particular:


Increasing the capacity of the Ministry of Agrarian Policy to enable it to fulfil its enhanced role in the SWAP development and in its dialogue with DG Agriculture


Improving institutional systems organised along EU risk analysis principles for the formulation and implementation of foods safety policy including traceability and an effective system of reference laboratories.


Improving access of small and medium sized agricultural producers to the market (including an improved system of wholesale and assembly markets) through access to credit and price information in rural areas, increased and more effective producer marketing groups supported by agricultural civil organizations.


Improving the framework conditions and mechanisms for development and support of rural sustainable development programmes based on EU best practice.


1.8. Expected results and main activities


Overall project results are expected to be the following:
  • Greater EU integration and harmonisation (with reference to CAP and EU’s Rural Development Policy 2007-2013)
  • Closer compliance with WTO requirements and harmonization of the legal framework with the EU. Emphasis on ‘green box’ issues, reduced ‘yellow box’ measures.


Specific project results are:


An increased capacity of the Ministry of Agrarian Policy to enable it to fulfil its enhanced role in the SWAP development and in its dialogue with DG Agriculture


Improved institutional systems organised along EU risk analysis principles for the formulation and implementation of foods safety policy including traceability and an effective system of reference laboratories.


Improved access of small and medium sized agricultural producers to the market (including an improved system of wholesale and assembly markets) through access to credit and price information in rural areas, increased and more effective producer marketing groups supported by agricultural civil organizations.


Improved framework conditions and mechanisms for development and support of rural sustainable development programmes based on EU best practice

Project components & indicative activities