"The move comes after a number of grain trading companies said they consider suspending operations in Ukraine, as government seeks to restrict grain exports by opening criminal proceedings against grain producers, and government officials local media reported."

"Kozachenko, who worked as a deputy prime minister in 2001 and 2002, said his arrest was part of the new government's tactic aimed at slowing down reforms in agriculture and scarring off foreign investors."

UKRAINIAN JOURNAL
Oleh Borsuk, Publisher
Kyiv, Ukraine
Wednesday, April 2, 2003

Kyiv, April 1....Ukraine's law enforcement agency launched criminal investigations against 200 grain producers throughout the country on accusations they had misrepresented harvest last year, which led to grain shortages on domestic market last month.

Prosecutors "have found numerous facts of falsification of grain harvest statistics, including statistics by grain producers and regional departments of the State Statistics Committee," the Prosecutor General Office said in an e-mailed statement.

The move comes after a number of grain trading companies said they consider suspending operations in Ukraine, as government seeks to restrict grain exports by opening criminal proceedings against grain producers, and government officials local media reported.

Ukraine, the world's sixth biggest grain exporter in 2002, planned to further boost grain exports, but last month called on grain traders to postpone shipments abroad amid deficit of grain and flour on domestic market.

The government had to sell an undisclosed part of its grain reserves amid the deficit last month.

"General Prosecutor's office is for normal relations with foreign companies. We also want to develop exports, but that should be within the law," said Tetiana Korniakova, deputy prosecutor general, in an interview with UT-1 state television Tuesday night.

"There should be equal conditions for all grain traders and none of them should be given any advantages."

The prosecutors have arrested former Deputy Prime Minister for Agriculture Leonid Kozachenko last week, on accusations of mismanagement of grain market and tax evasion.

Kozachenko, who worked as a deputy prime minister in 2001 and 2002, said his arrest was part of the new government's tactic aimed at slowing down reforms in agriculture and scarring off foreign investors.

Ukraine plans to export 11 million metric tons of grain in twelve months ending June 30, compared to about 14 million metric tons that Australia plans to ship.

Next year, export may decline to as low as 5 million metric tons, analysts said. (hp/ob)