Washington, 22 October 1996 (RFE/RL) -- The World Bank has approved a $300 million loan to Ukraine to help promote the growth of a market-based agricultural system.
The bank says the loan will be used to facilitate key agricultural and trade reforms. These include pushing the development of commercial marketing and distribution channels for domestic and export markets by reducing state procurements and ending restrictions on farm exports.
The program will also promote land reform and encourage the privatization and demonopolization of existing agribusiness firms.
Ukraine, once known as the breadbasket of the Soviet Union, still has a "comparative advantage" in agricultural production, says the bank. But "unsustainable agricultural policies" from the Soviet days, which cut farm production by more than 30 percent before independence, must be overcome, the bank adds.
The loan will be disbursed in two tranches -- $150 million as soon as the papers are signed, for balance of payments support, and the rest to be released upon fulfillment of reform conditions agreed to in the loan program.