Commentary on the liquidation of the Ministry of Agrarian Policy and Food of Ukraine

On 29 August 2019 the decision to liquidate the Ministry of Agrarian Forestry and Food of Ukraine was announced by the Government. The Ministry is to be taken over by the Ministry of Economic Development, Trade and Agriculture (the former Ministry of Regional Development, Construction, Housing and Communal Services).

The new Minister of Economic Development, Trade and Agriculture Tymofii Milovanov in his public commentary claimed that the new Ministry will be better equipped to give boost to key reforms, like agricultural land market introduction, privatizing state enterprises, agricultural markets access, agricultural education reform, labor market liberalization etc.

The response of the main stakeholders was mostly very cautious or negative. The fear was expressed that the reform was the indicator of the policy priorities shift from agriculture to other sectors. Without the agricultural Minister as the member of the Government agribusiness lost a powerful advocate and was risking to be deprived of existing state support.

In my opinion the merger of Ministries can be useful, if it leads to the elimination of duplicity in functions, ensures more comprehensive management approach, optimization of staff and removal of obsolete functions and units. If it comes to the Ministry of Agrarian Policy and Food, the very list of units within the Ministry creates an impression, that most of them are performing merely secondary tasks (accounting, document flaw support, HR, PR, internal audit, corruption prevention, legal department, planning etc), and not its core functions (rural development, state support of agriculture, food safety control etc). This shows that there are good opportunities for optimization.

On the other hand, any restructuring is combined with the risk of management destabilization, decline in efficiency (at least for the transition period). This risk can be mitigated through the careful preparation and planning, which, unfortunately, was not the case here.

To sum it up, the liquidation of the Ministry of Agrarian Policy and Food and its merger is only a tool. It is not clear yet how this tool will be used.

Prof. Dr. Anatolii Miroshnychenko, EUCON Legal Group, Senior Partner

Source: The Ukrainian Journal of Business Law