Ukrainian Agriculture Minister Oleksiy Pavlenko can reel off one optimistic statistic after another about the growing economic sector that he oversees, except for one: Success in prosecuting the alleged financial crimes of his predecessor, Mykola Prysyazhnyuk.
The key numbers regarding Prysyazhnyuk, the minister under disgraced President Viktor Yanukovych, ousted 19 months ago, are:
160 – the number of complaints filed with the Interior Minister and General Prosecutor’s Office outlining allegedly corrupt schemes under Prysyazhnyuk;
0 – the number of criminal cases filed against Prysyazhnyuk and his associates;
0 – the amount of money recovered that was allegedly stolen under Prysyazhnyuk;
Hr 9 billion – the amount of money suspected to have been stolen (more than $400 million).
Pavlenko is still finding corrupt schemes among the mainly money-losing state enterprises under his control. They’re adding to a long list of losses to Ukrainian taxpayers from state agricultural enterprises, including the State Grain Corporation, Agrarian Fund and alcohol producer Ukrspyrt.
“We sent inquiries to the General Prosecutor’s Office, Interior Ministry, Security Service of Ukraine, the parliament agrarian committee, anticorruption committee,” he said.
The only answer the ministry gets in return is the “investigation is in process.” When asked if he believed the statement, Pavlenko smiled. “But we will keep raising this issue,” he said..
His ministry is not alone as there has been a universal failure of the Ukrainian criminal justice system to either recover the billions of dollars allegedly stolen under the Yanukovych administration or punish anybody responsible for the theft.
But now the good news from Pavlenko.
Ukraine is the world’s third largest grain exporter after the U.S. and the European Union.
Ukraine sold 34.8 million tons of grain abroad in the 2014-2015 marketing year.
It has so far harvested 36.7 million tons this year and is expected to reach 60 million tons by Dec.1.
Currently, Ukraine is self-sustainable in agriculture, consuming only 24 million tons of grain per year.
“We are feeding the world,” Agriculture Minister Oleksiy Pavlenko told the Kyiv Post.
His goal is to reach 100 million tons of production and 75 million tons of exports by 2020. Even the Donetsk and Luhansk Oblasts under Ukrainian control have already produced over 2 million tons of grain this year.
And Pavlenko doesn’t even think that the moratorium on the sale of agricultural land is essential to reaching his production goals. He said that public support for a land market is low – in the range of 20 percent. He also said that there are plenty of nations that lease agricultural land with good results.
But Ukraine could be so much better off without the corruption that made insiders wealthy.
Only 20 of the 96 functioning agricultural state enterprises reported a profit last year on paper, but even those reported moneymakers are highly suspicious. The ministry’s goal is to “take control” of the state enterprises under its jurisdiction, including firing poor managers and investigating their finances. Pavlenko wants to sell them off in transparent auctions as soon as possible.
It’s hard to say what the final toll of losses will be for Ukrainian taxpayers.
A recent inspection of the State Grain Corporation revealed around $55 million in losses that the company caused the state in 2013-2014, while the artificially bankrupted “Khlib Ukrainy” (Bread of Ukraine) cost over Hr 0.5 billion ($22 million) in stolen assets at market prices since 2006.
And then there’s the by now the infamous loss of $132 million for 660,000 tons of corn that was contractually sold to offshore companies under Prysyazhnyuk. Ukraine never saw one penny from the sale of the exported corn.
“Dark forces are afraid of light and you should put on the light, make it public,” Pavlenko said.
Despite these setbacks, Pavlenko remains proud of the results so far this year.
Agricultural exports to the European Union grew by 6 percent, to $5 billion; to Asia by 10 percent, to $6.6 billion; and to China – by 2.1 times, to $780 million. Also, Kazakhstan opened its market for Ukrainian milk, Israel – for eggs – and the Canadian Free Trade Agreement is waiting for parliament’s approval.
“Many people don’t understand the importance of other markets. They think that Russia and (Eurasian) Customs Union were, are, and will be the top markets for agribusiness,” he said.
In reality, Russia accounts only for 2 percent of total agriculture exports, compared to 8 percent last year. So the prospect of a Russian import ban on Ukrainian agriculture will have only a minimal effect, he said.
So far, there is no infrastructural bottleneck for export, but the capacities need to be increased for transportation and storage.
According to Pavlenko, port facilities for up to 10 million tons are under construction, while the great potential for logistics lies in river transport, currently used to move only 5 percent of exports despite being the cheapest means, costing $6-8 per ton, compared to $26 for road transportation.
Kyiv Post staff writer Olena Gordiienko and chief editor Brian Bonner can be reached at [email protected] and [email protected] .
