Agricultural associations in Ukraine are voicing strong opposition to a proposal by Ukrzaliznytsia to increase freight tariffs across all categories by 30%. They argue that this approach is administrative and fails to reflect the actual economics of transportation.
One major concern raised by the agricultural sector is the practice of cross-subsidization, where profitable cargoes subsidize losses from other categories. The associations warn that further increases in tariffs may lead to a shift from rail to road transport for freight. They cite a trend already observed in fuel transportation, suggesting that such a hike could further erode Ukrzaliznytsia’s cargo base.
The Ukrainian Agrarian Fund (VAF) also emphasizes that the proposed strategy contradicts the principles of railway reform that Ukraine has committed to as part of its European integration efforts. These principles include transitioning to a transparent tariff model, separating infrastructure operators from transport providers, and fostering market competition.
In light of these concerns, agricultural associations advocate for moving away from mechanical tariff increases in favor of a more economically justified tariff formation model. Proposed measures include differentiating tariffs based on the type of transport, establishing a unified base tariff grounded in actual production costs, and adhering to a government-approved profitability level.
The authors of the appeal believe that this approach would support Ukrainian producers, maintain export competitiveness, and ensure the financial stability of Ukrzaliznytsia without adding pressure to the economy amid ongoing conflict.
Context
- In June, various Ukrainian industrial, transport, and sector associations appealed to Prime Minister Yulia Svyrydenko and the head of the President’s Office, Kyrylo Budanov, urging them to prevent an increase in Ukrzaliznytsia’s freight tariffs in 2026.
