Farmers from frontline areas promised help with railroad transportation tariffs
2 April 2025 15:35
The Ministry of Agrarian Policy is looking for mechanisms that could compensate for the abolition of a 30% discount on rail transportation for farmers from the frontline areas. This was announced by the Ministry following a meeting of the Coordination Council for Logistics in Agriculture, "Komersant Ukrainian" reports.
As it is known, on March 20, 2025, Ukrzaliznytsia stopped providing the aforementioned discount, referring to the order of the Ministry of Community and Territorial Development No. 376 of 28.02.2025, which approved an updated list of combat areas.
Minister of Agrarian Policy Vitaliy Koval called for a joint solution to the problem and said that various mechanisms are being considered.
“For example, we are talking about finding resources to cover the costs. We also discussed the tariffication of transportation of products from ports. As options, we are considering indexing tariffs, creating a single tariff, or splitting the amount into two payments: for infrastructure deterioration and separately for kilometers. We agreed to set up a working group of representatives of the relevant agencies to develop a roadmap for both farmers in the frontline areas and all other regions,” the Minister said.
All-Ukrainian Agrarian Council demands to restore the discount on rail transportation
The All-Ukrainian Agrarian Council calls the abolition of the 30% discount on the transportation of agricultural products from the frontline areas to Ukrainian ports by Ukrzaliznytsia simply unlawful and cites relevant arguments.
Representatives of the farmers point out that Ukrzaliznytsia, when terminating the discount, referred to a new order of the Ministry of Community and Territorial Development dated February 28 this year, which approved an updated list of combat areas. For some reason, Ukrzaliznytsia believes that the cancellation of the previous order of the Ministry has also invalidated the grounds for granting the discounted tariff.
However, according to the All-Ukrainian Agrarian Council, such a position of Ukrzaliznytsia is legally unjustified, since, for example, the Resolution of the Cabinet of Ministers of Ukraine of February 9, 2024, No. 129 and the Order of April 30, 2024, No. 380-p, which provide for compensation for the company’s losses due to the provision of such a discount, remain in force.
“This 30% discount allowed farmers working in difficult conditions to reduce logistics costs and ensure a stable supply of grain for export. Increased logistics costs may simply make their business unprofitable. That is why we called on the government and Ukrzaliznytsia to restore the discount for farmers,” said Denys Marchuk, Deputy Chairman of the All-Ukrainian Agrarian Council,
Ukrzaliznytsia also has to count money
Last year, Ukrzaliznytsia demonstrated record volumes of cargo transportation for the three years of full-scale invasion. However, the growth rate of transportation began to slow down in the second half of the year. In January 2025, the trend continued. For this year, the company expects a reduction in cargo turnover by about 6%.
Freight transportation is the main source of the company’s financial stability. Revenues from this activity cover the company’s expenses and part of the cost of passenger transportation.
By the end of 2024, without government support, Ukrzaliznytsia’s net loss is projected at UAH 1.5-2.5 billion, according to the company’s presentation to creditors on the Irish Stock Exchange website.
The key reason for this is a sharp drop in the transportation of key cargoes: grain (minus 24%), iron ore (minus 12%), and coal (minus 17%) in the second half of 2024 compared to the number of shipments in the first half of the year.
Meanwhile, Ukrzaliznytsia’s expenses increased due to a 166% rise in electricity, 110% in diesel, and 217% in spare parts.
