Farmers urged "Ukrzaliznytsia" not to raise freight transportation tariffs.

The increase in freight tariffs by "Ukrzaliznytsia," along with the lack of booking options for small agricultural producers, could devastate medium-sized farming in Ukraine, leading to a loss of the tax base for local self-government bodies in rural areas.

This was stated at the All-Ukrainian Congress of Farmers (VKF).

"The announced increase in freight tariffs by "Ukrzaliznytsia" of +37% will negatively impact the profitability of micro-farms and agricultural enterprises, as the increased logistics costs will be fully passed on to the purchase prices of agricultural products," emphasized the VKF.

Furthermore, due to significantly lower incomes, small agricultural producers will be unable to purchase enough fertilizers, the congress highlighted, noting that this expense is crucial for balancing small agribusiness: having money means having fertilizers.

"The lack of funds and fertilizers will lead to a 30% drop in yield and, consequently, to losses, as the cultivated area remains the same while the harvest varies. According to expert estimates, the increase in UZ tariffs will result in a loss of approximately 1.3 million tons of grain and oilseed harvests for micro-farms and agricultural enterprises, amounting to $300 million," the VKF emphasized.

Moreover, it is essential to consider that the rise in freight tariffs will redirect agricultural product producers from railways to roads. This shift to road transport could deteriorate their condition, which is extremely unacceptable, especially in the context of war, the congress concluded.

As is known, experts and business associations have accused "Ukrzaliznytsia" of attempting to exploit its monopoly position by increasing the freight transportation tariff by 37%. As stated by the American Chamber of Commerce (ACC), in addition to tariffs, UZ plans to raise the costs of services related to transportation, as well as fees for the use of wagons and containers.

Background. Previously, Mind reported that freight transportation, including the import of agricultural products from Ukraine, both by sea and land, has faced certain difficulties since the beginning of the full-scale invasion by the Russian Federation.