Taras Vysotskyi: Loans at 10% and more financing secured by grain will help farmers weather price fluctuations
The Government is strengthening financial instruments to support the agricultural sector, ensuring farmers’ access to working capital, stabilizing the domestic market, and preventing forced sales of grain at undervalued prices. At the same time, export regulation conditions are being adjusted to reflect real logistics costs and external market situations. Minister of Agrarian Policy and Food of Ukraine Taras Vysotskyi explained this in an interview with one fo media outlets.
One of the key Government decisions is expanding concessional lending opportunities for farmers under the Affordable Loans at 5‑7‑9% program. The restriction that no more than 20% of a loan could be used for working capital has been lifted. Now all borrowed funds can be directed to current production needs.
In addition, the effective interest rate for farmers has been reduced from 15% to 10%, with the difference compensated by the state. Preferential terms apply both to new loans and to the extension of existing ones.
“For the autumn sowing season, the maximum loan amount is UAH 90 million — sufficient to finance the production cycle on up to 3,000 hectares. In November, the Government plans to consider raising the limit to UAH 150 million to prepare for the spring sowing campaign. It is expected that the volume of state guarantees for loans may reach UAH 80 billion. The agricultural sector needs UAH 40 billion monthly for sowing. Thus, the state already provides resources for the next two months,” emphasized Taras Vysotskyi.
The overall need for working capital financing in the agricultural sector for autumn is estimated at about UAH 200 billion. For spring 2027, another UAH 300–350 billion will be required.
According to the Minister, the idea of lending is to remove chaotic grain supply from the market, which drives prices down. Instead of selling grain at low prices, farmers can access credit to cover current needs. This will help them get through the period of sharp price drops and reduce speculative factors.
Another important tool is the increase of the NBU collateral coefficient for grain from 0.4 to 0.75. This means farmers can attract more financing against grain collateral. For example, in June, a farmer pledging one tonne of wheat priced at UAH 10,000 could obtain a loan of UAH 4,000. In August, when grain prices fell to UAH 6,000–7,000, it became possible to secure even larger loans — UAH 4,500–5,000.
This mechanism is designed to help producers avoid selling grain immediately after harvest at minimum prices. Instead, farmers can obtain necessary funds, store their products, and sell them later when market conditions are more favorable. At the same time, it reduces excessive grain supply on the domestic market.
The Government also adjusted minimum export prices for agricultural products. This decision was made at the proposal of agricultural associations, taking into account changes in logistics and actual market prices.
For example, when exporting via alternative routes, a significant share of product value is formed by delivery costs to European ports. Logistics to Romania’s Constanța port may amount to around USD 170 per tonne.
The applied coefficient of 0.714 accounts for possible sharp price drops on external markets. It is based on the maximum monthly decline during the most difficult period of 2022 — 28.6%. Meanwhile, actual decreases, according to official statistics of real transactions, currently stand at about 19%.
Taras Vysotskyi also drew attention to alternative export routes. According to the Ministry of Agrarian Policy and Food, they could potentially ensure the export of up to 3 million tonnes of Ukrainian agricultural products per year. He stressed that Ukrainian agricultural products transiting through Poland and other EU countries are intended for third‑country markets, including Algeria, Indonesia, and South Korea. Such transit also provides additional loading for the port infrastructure of Baltic countries.