The Ukrainian government has been talking about installing a state run grain monopoly which many considered to be a bit of smoke and mirrors..
Well it seems the government is more serious about it than most of us thought and have started to implement legal changes that may well make the spectre of a Ukrainian grain board a reality.
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My mate Cuck Penner of LeftField Commodity Research tells me that when he researched the Canadian Wheat Board he found that it left Canadian farmers some $400-600 million worse off each year mostly due to inefficiencies and a lack of competitive bidding.
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Is the UWB likely to be any more efficient than the CWB?
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The EBRD and World Bank have been financing some spectacularly expensive grain storage and handling facilities with private trading companies.
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I can't see them financing a state run monopoly so who is going to pay to upgrade the sorely needed storage?
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Two years in the last three saw grain export bans; ships full of wheat sat at port through most of August and September last year; a poor 2010 harvest coupled with low prices made it difficult to make a return on investment; murky land ownership procedures; difficulties in sourcing reliable inputs; corruption; theft etc.
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You can see why private investment is not rushing headlong in to Ukraine agriculture; the introduction of a UWB is unlikely to boost confidence and encourage further investment now is it.
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So what is anybody doing about this?
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The EBRD, World Bank and IMF held a round table discussion and have written a stern letter to the Prime Minister of Ukraine!