The following is the text of the article, published in the Ukrayina Moloda newspaper on 1 April:

The grain "search", which swept through the regions like a typhoon, accusations against international grain traders and the arrest of Leonid Kozachenko, former deputy prime minister [for agriculture], on trumped up charges throw doubts on Ukraine's previous export policy, which was considered very successful as recently as on the New Year's eve.

It would not have been so bad, after all, but the sudden changes in the agricultural sector, without government funding and just before the sowing campaign, have put commercial funding at risk. Not only representatives of agrarian business, but Kozachenko himself draw attention to this fact.

In a statement released through his lawyer Ihor Usenko, Leonid Kozachenko warns: "An attempt is being made to restore the inefficient command-administrative system of managing the agricultural sector using the problems on the Ukrainian grain market as an excuse".

Kozachenko, the president of the Ukrainian agrarian confederation, has described the present campaign as an attempt to misinform the country's leadership and the wide public about the main problems of the Ukrainian grain market. Leonid Kozachenko considers the Prosecutor-General's Office charges against him politically motivated and flatly denies his guilt.

According to his lawyer, the former deputy prime minister does not understand the logic of these events: "When there are grain shortages in the country, Kozachenko is arrested. What if there is a shortage of money, will they arrest the head of the National Bank?"

Using this principle, it is possible to arrest half of this country's leaders. Kozachenko told the investigators: "When I was resigning from my post, the country had three times the amount of grain it needed on the domestic market." Where did it all go and who is to blame?

Thus, the former deputy prime minister and his lawyers say the resolution of the Prosecutor-General's Office contains no actual charges - it contains "an opinion of the Prosecutor-General's Office which believes Kozachenko' agrarian policy was wrong".

"Such an approach shows that the Prosecutor-General's office is prejudiced", Ihor Usenko said. "The actions of the Prosecutor-General's Office discredit the country's export policy and undermine Ukraine's international reputation", Leonid Kozachenko said in his statement.

The entire grain affair with one person being blamed rouses more and more indignation on the part of the opposition, whose representatives themselves used to criticize Kozachenko for his agrarian policy.

MP Yevhen Zhovtyak is convinced that the case was fabricated in order to put pressure on Kozachenko in the run-up to the presidential election. In his words "someone who will run for president from the presidential team" has done it.

In the meantime, Leonid Kozachenko, charged with abuse of office when he occupied the post of deputy prime minister and failure to pay 584,940 hryvnyas [over 100,000 dollars] in taxes when he was the head of the Ukrahrobiznes [Ukragrobusiness] company, is in custody in Podil [district in Kiev].

Yesterday his lawyers lodged a complaint with the Kyiv court of appeal against the Pechersky district court's decision sanctioning Kozachenko's arrest.

Ukrainian Grain Association (UGA), embracing major grain trading companies operating in Ukraine, published an Appeal March 27 where the analysis of current situation in Ukrainian grain market was given, with regard to inspections being currently performed by Procurator's Office in this market and their coverage in mass media .

UGA includes leading grain trading companies such as Cargill, Toepfer, W.J. Exp., Glenkore, Dreyfus and Nidera.

According to UGA, the charges against ex-Deputy Prime Minister L. Kozachenko, recently set up by General Procurator's Office, actually put the blame on all the grain traders, working in Ukrainian market, despite the fact that their activities have been within the limits of Ukraine's effective legislation and adequate to the norms of fair competition.

"Within 2002 and 2003 the efforts of the grain market operators were aimed at fulfillment of Decree No. 601 of the President of Ukraine, dated August 7, 2001 "About Measures of Food Market Development and Encouragement of Exports of Agricultural Products and Foodstuffs"", the UGA Appeal reads. "Thus, the unfolded in mass-media campaign of discrediting grain export achievements of Ukraine, is in fact directed against decisions of Ukrainian President", it proceeds.

Analysing the issue of grain crop assessments and current stocks of milling grain in Ukrainian market, UGA has pointed out that the idea of milling grain shortage, being now pushed on by some mass-media, is as an essentially incorrect one. Besides, neither trading companies nor officials could be blamed for a lack of precision in official statistics, the UGA Appeal says.

Commenting on accusations of exports at underrated prices, being currently brought against the traders' , UGA has emphasized that grain exports from Russia in the period from July to December 2002 were being made at still lower prices.

At the same time, UGA draws attention to the fact that operations of trading companies in Ukrainian grain market generally improve its transparency and increase the level of competition between the purchasers, which encourages growth of selling prices for Ukrainian grain.

Pointing out to the fact that trading companies are the largest investors into the grain growing business in Ukraine, UGA maintains that one of the gravest consequences that can be entailed by current situation is its negative effect upon the level and quality of cooperation between investors and the farmers. In conditions of started sowing campaign, this can have the hardest effect upon the whole of the country.

On these reasons Ukrainian Grain Association calls on all market participants and governmental bodies to approach prudently to the assessment of grain market situation and to restrain from any declarations that could further aggravate condition of agrarian sector in the country.

Starting of criminal case against L.Kozachenko, former Vice-Prime Minister is a warning to executive power.

According to Vice-Prime Minister I. Kyrylenko, the agricultural block so far did not fulfill the Presidential decree about the state regulation in the market of grain using the mechanism of pledge purchases. As I.Kyrylenko added, so far executive power appeared to be unable to allocate corresponding money in state budget and remove excess of grain that made pressure on price policy from the market.

At the same time present Vice-Prime Minister forecasts changes among governmental officials of APK (Agro Industrial Complex) if it will be impossible to regulate the situation in the grain market till the end of April. In April the government will have to find money for pledge purchasing of grain in order that in August-September, 2003, ensure purchasing of 2-3 million tons of grain.

This week the State Reserve started to supply flour to regions that have deficit of it, which, in the opinion of the Vice-Prime Minister, will normalize prices of bread without their significant increase.

As we informed earlier, on March 21st Office of General Public Prosecutor started criminal case against L.Kozachenko, former Vice-Prime Minister, accusing him in abuse of power and avoidance of tax payment. Criminal cases were also started about stealing of budget money and forgery against such enterprises as "Regional contract", "Kharkiv regional MTS" and "UkrSibincor".

The Ukrainian State Reserve started selling flour of the highest grade to various regions at 985 UAH/MT and flour of grade 1 - at 840-860 UAH/MT.

The grain that is processed at the enterprises of the State Reserve is sold from stock that exceeds the irreducible stock.

According to I.Kyrylenko, Vice-Prime Minister, the State Reserve is able to satisfy all applications received from regions.

Thus, according to him Crimea and Lviv region receive 5,000 MT of flour each month, Ternopil region - 3,500 MT, and the Khmelnitsk region - 1,500 MT.

NOTE: To Read the UGA Grain Market Analytical Report Click On:

http://www.ArtUkraine.com/buildukraine/Analitic%20report_1_eng.doc