Head of Ukraine grain storage monopoly resigns over slow privatization progress
June 01, 1999
by Teresa Acklin
KIEV, UKRAINE Hryhory Omelyanenko, the head of the Ukraine grain storage monopoly Khlib Ukrainy, has resigned. Lack of progress on privatization, failure to ensure timely repayment of state credits and rising food prices due to low grain reserves were reasons cited for his resignation.
The International Monetary Fund, which recently approved an increase of its Extended Fund Facility to almost U.S.$2.6 billion over three years, has made privatization of Khlib Ukrainy and its grain elevators a key condition for monetary aid.
A government order in February reorganized Khlib Ukrainy, a former state ministry in charge of grain procurement and storage, into an open joint stock company. The company continues to hold state grain reserves, a holdover from days under Soviet control under which collective farms were bound to sell a certain amount of grain to the state, but is no longer responsible for providing fuel, fertilizer, seed and other crop inputs to farmers.
The privatization and restructuring process in Ukraine has been slow. Western economists have blamed the system, in which farmers take inputs on credit against the season's crop, for pushing Ukraine's fertile farms deeper into indebtedness, low productivity and profit losses.