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Roadmap on Aquaculture Development in Ukraine

Comprehensive analysis of challenges and
opportunities of aquaculture industry in Ukraine, bestpractice
experience and policy recommendations

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Roadmap on Aquaculture Development in Ukraine

  1. 1. 1 Roadmap on Aquaculture Development in Ukraine Comprehensive analysis of challenges and opportunities of aquaculture industry in Ukraine, best- practice experience and policy recommendations November 2017 Kyiv, Ukraine
  2. 2. 2 EXECUTIVE SUMMARY Sources: EasyBusiness PROJECT DESCRIPTION PROJECT OUTCOME CONDUCTED VALUE CHAIN ANALYSIS AND CASE STUDIES Value chain analysis and business case studies through site visits to companies operating within the land-based, pond-based and cage-based aquaculture types ANALYZED KEY MARKET INDICATORS OF AQUACULTURE INDUSTRY Comprehensive aquaculture market assessment focused on definition of main prospect of doing business in aquaculture and identification of key market indicators and trends MADE ANALYSIS OF INTERNATIONAL EXPERIENCE Comparative analysis with international “best practice” (5 countries focused on three aquaculture types) DEVELOPED POLICY RECOMMENDATIONS Specific recommendations for further development of Ukrainian aquaculture industry were formulated PERIOD 02/2017-09/2017DONORS STAKEHOLDERS State Fisheries Agency A comprehensive analytical report developed as a Roadmap for further improvement of Aquaculture industry in Ukraine Based on the analysis of aquaculture industry in Ukraine along with the study of international experience, the Roadmap was developed
  3. 3. 3 In 2016, 82% of seafood demand was imported, while domestic aquaculture has opportunity to improve its production volumes INDUSTRY OVERVIEW 34 888991 226204211219 257245214229 266 226248 293 333350342 300 200 1 000 800 1 100 900 100 0 1 200 931 993 23 997 618 24 2424 1 064 2826 19 1 169 1 021 2008 822 779 2006 2631 31 814 806 771 31 2005 2007 2010 20142001 20092000 934 20161999 2004 20132011 984 20032002 24 22 616 872 2012 2124 23 914 1 070 29 2015 Total aquaculture production in Ukraine, thsd tons Total catch of fish and other aquatic bioresources in Ukraine, thsd tons Total fish and seafood products consumption in Ukraine, thsd tons, % Sources: EasyBusiness Financial crisis caused the decrease of fish and seafood consumption Tough economic situation due to the Crimea annexation and war caused both decline of fish catch and consumption
  4. 4. 4 The low level of production of domestic aquaculture producers is mainly caused by their comparatively low competitiveness… INDUSTRY OVERVIEW Overview AQUACULTURE INDUSTRY PRODUCER PROFILE VALUE BREAKDOWN OF AQUACULTURE IN UKRAINE Business model ▪ More than 10 years of average life cycle ▪ Mainly pond-based aquaculture ▪ Most popular cultivated species are carps and pike ▪ Average total production is 700 tons ▪ Average productivity is 10 kg per hectare ▪ Average profitability is 20% Challenges ▪ Bureaucracy and corruption ▪ Low purchasing power of buyers ▪ Absence of governmental support and high taxation 100 7 2 11 2 1 7 10 60 Rent Salary Brood stock supply Energy resources Feed Fish intesification Other costs* Transport Input Production Post production * - Other costs that account ~7% of production cost are distributed among three stages and depends on the company. Total Sources: EasyBusiness
  5. 5. 5 … that is tightly connected to the unfavorable industry conditions for doing business characterized by the bureaucratic legal framework INDUSTRY OVERVIEW Water body lease agreement Land lease agreement Waterworks lease agreement Special water use permit Veterinary documents Number of Permits Timing (days) Fee (EUR) 23 827 days 3740 EUR 1 14 Only in some cases 1 7 15 272 90 450 52 1218 0 2470 Only in some cases Only in some cases Sources: EasyBusiness
  6. 6. 6 In order to improve business environment in the Ukrainian aquaculture industry, international experience was studied INTERNATIONAL EXPERIENCE Sources: EasyBusiness PREVAILED TYPE OF AQUACULTURE Cage-based NORWAY DENMARK POLAND RANKING IN THE WORLD MAIN FISH EXPORTERS NUMBER OF KEY PERMITS FISH PER CAPITA CONSUMPTION (KG) 53.3 1 2 LITHUANIA Land-based 13.5 3 8 Pond-based 19.0 3 79 Pond-based 12.5 3 61 NUMBER OF KEY REGULATORY BODIES COMPLIANCE WITH EU REGULATIONS 3 YES 5 YES 3 YES 2 YES GOVERNMENTAL ECONOMIC INCENTIVES YES YES YES YES TOTAL AQUACULTURE PRODUCTION ($US MLN) 7607 122 12 112 UKRAINE Pond-based 9.0 9 N/A 8 NO NO 42 The worst performed countryThe best performed country
  7. 7. 7 Having analyzed best international practices in aquaculture industry, a set of policy recommendations was formulated POLICY RECOMMENDATIONS Sources: EasyBusiness MAIN SOLUTIONS TO THE CHALLENGES § Approve a typical rental contract form § Grant a special water use permit along with the other issued by the same institution § Remove the duplicated veterinary permits Decreased the time and money needed to receive relevant permits Established clear procedures for renting water bodies and hydraulic works DUBLICATIONS OF PERMITS LACK OF PROPER INFRASTRUCTURE OBSOLETE AND UNCLEAR PROCEDURES UNEQUAL TAXATION AND TENDER SYSTEM Increased profitability of aquaculture companies Increased capability and profitability of industry § Clarify the legal status of water bodies § Establish the responsibility to provide all relevant waterworks to the renter § Improve veterinary norms for examination § Add the aquaculture producers to the list of special taxation treatment § Establish equal conditions for land tender procedures § Create the aquaculture educational centers and training platforms § Introduce domestic fish food production § Open modern research centers RECOMMENDATIONS EXPECTED OUTCOME
  8. 8. 8 The project is sustainable and divided into 2 stages from the development of the policy recommendations to its implementation PROJECT SUSTAINABILITY Sources: EasyBusiness RESULTS OF STAGE 1 § Duplication of permits that is followed by the existence of several rental contract types § Obsolete and unclear procedures that facilitates development of corruption and bribery § Unequal taxation and tender system that creates room for untransparency § Studied Ukrainian aquaculture industry along with the best international practices § Compared Ukrainian and international aquaculture industry conditions § Developed policy recommendations for aquaculture industry improvement § Adjusted current legislation based on the policy recommendations § Improved business environment in the aquaculture industry that would facilitate the growth of aquaculture production § Set up of new Ukrainian aquaculture industry businesses RESULTS OF STAGE 2 STATUS QUO CURRENT STATE

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  • Ichsanrusydi

    Nov. 30, 2017

Comprehensive analysis of challenges and opportunities of aquaculture industry in Ukraine, bestpractice experience and policy recommendations


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