“Ukrzaliznytsia may “kill” Ukrainian farmers: what is at stake
12 February 2025 16:27
A 37% increase in Ukrzaliznytsia’s tariffs will kill Ukrainian farming. This was stated by the All-Ukrainian Congress of Farmers (AFC), [komersnt] reports.
The AFC is confident that the 37% increase in freight tariffs announced by Ukrzaliznytsia will have a negative impact on the profitability of micro and small farms, as the increased cost of logistics will be fully passed on to the purchase prices of agricultural products.
In addition, due to significantly lower incomes, small farmers will not be able to purchase sufficient fertilizers. As you know, this particular expense item is a balancing act for small agribusinesses: having money means having fertilizers. Lack of funds and fertilizers will result in a 30% drop in yields and, as a result, loss-making, since the cultivated area is the same, but the harvest is different.
Experts estimate that the increase in UZ tariffs will result in the loss of approximately 1.3 million tons of grain and oilseeds worth $300 million for micro and small farms.
“Ukrzaliznytsia raises transportation tariffs: what is known
In 2025, Ukrzaliznytsia plans to increase freight transportation tariffs by 37%. This decision has caused concern among businesses and economists, as it could have serious consequences for the Ukrainian economy.
Impact on farmers and the rural population
Farmers have expressed concern about the tariff increase, as it could increase the cost of transportation of grain and other agricultural products. In particular, a 67% increase in the tariff for the transportation of empty wagons could increase farmers’ costs by UAH 50-60 per ton, which would result in additional costs of about UAH 2 billion per season.
Such changes may affect the number of farms in Ukraine, which in turn will affect the size of the rural population. Small farmers may abandon their land, leading to the shrinkage of rural communities.
Economic consequences for businesses
Increased tariffs could lead to higher costs for businesses, especially in times of war and economic instability. Transportation costs could become an additional burden for businesses that are already facing numerous challenges.
Recommendations for the government and Ukrzaliznytsia
The experts recommend that the government and Ukrzaliznytsia carefully assess the possible consequences of the tariff increase and consider alternative ways to increase the company’s revenue. In particular, it is proposed to reduce corruption losses at Ukrzaliznytsia, which amount to hundreds of millions of dollars annually.
