Global Grain blog



Published November 2019 by Natalia Skurativska, Outreach and Stakeholders Expert, Ukraine Crop Receipts Project



1. Why Ukraine?
Ukraine is an excellent and prospective place to source your grain supply. The reason for this is that the country is among largest world grain exporters showing high positive trends year-to-year. 70 million tons of grains were produced in Ukraine in 2018 50 million of which were exported. With 33 million hectares of rich black soils and favorable weather conditions the country has a great potential for further yield growth. At the same time Ukrainian agri-producers are professional and highly responsible business-people, who understand world markets and modern trading instruments. Even small and medium farmers in the range between 1,000 and 5,000 hectares can export, meet grain quality requirements and build long-term sustainable partnerships. All these combined allow your company to enter new market and benefit from developing your business in Ukraine.

2. What is a Crop Receipt?

Crop Receipt is an alternative financing instrument for Ukrainian farmers. The instrument allows to use future harvest as a collateral to strengthen forward contracts, secure loans and provide extra access to credit resources for agri-producers in the country. Crop Receipts are tailored for agriculture combining key features of the alternative instruments while providing extra benefits for its users. For the commodity trading segment Crop Receipts allow to plan and ensure goods delivery, secure provided prepayments, while protecting creditors’ rights. The instrument is adapted from success in Brazil and implemented by IFC Ukraine Crop Receipts Project in partnership with Swiss Confederation and within active support from government, public and private sector.

3. Why Crop Receipts?
Crop Receipts enable access to cost effective financing using a future crop pledge from specific land plots. For farmers Crop Receipts are simple and easy to document and the concept is very understandable. Crop Receipts are flexible. They can be used by farmers of different size and specialization as all that is required is land and a crop. There is also no limitation to who can be the creditor via crop receipt. Therefore, Crop Receipts can meet a broad range of financing needs, including trade credit, banks, credit unions and financing against commodity contracts. Crop Receipts are transparent and secure. All Crop Receipts are registered in a public on-line centralized register, allowing creditors to see how a farmer is performing and how many receipts are outstanding at any point in time. This ensures better protection of creditors rights and helps farmer to build their credit history. Also, Crop Receipts are unconditional and supported by an accelerated, out-of-court enforcement process, which has already been proven to work. Crop Receipts can be used by non-residents. Within the Ukrainian currency regulations Crop Receipts can be issued to non-residents with the clear and simple mechanism for issuing, settlement and enforcement with no caps on interest rate and no maximum loan size. Therefore, Crop Receipts allow foreigners to engage with Ukrainian farmers directly to lend or secure commodity supply, improving efficiency and reducing the need for middlemen.

4. Is the instrument already in use?
Crop Receipts have been used in Ukraine from 2015. From that time, over 2,100 Crop Receipts were issued with total value $600 M USD. More than 3.5 M tons of grains and oilseeds were used as pledge within issued Crop Receipts. By the time default rate within Crop Receipts remains less than 1%. 8 Crop Receipts were issued to non-residents – international traders to secure prepayment under forward contracts. And thus, Crop Receipts are an established and well used instrument, reducing your risks to finance farmers and secure origination of supply.




You can also visit our preference centre and make more specific selections based on your interests.  Of course, you can unsubscribe at any time.

If you have previously registered with a Euromoney group website and wish to update your marketing preferences, then please visit our preference centre to do so.


Privacy Notice     Terms and Conditions