Agriculture in Ukraine
Mila Borden, Ukraine Business Insight, October 2010
Both local and foreign experts concur that the main obstacles faced by Ukraine’s agriculture sector are land tenure and access to resources.
Farmers, large agri-businesses and even multinational corporations are unable to acquire the land and equipment necessary for large scale production. As a result, the country’s entire agriculture industry remains disconnected and is not as productive as it could be, given that it should be the breadbasket of Europe.
Frustration is running high among foreign investors who believe that their multi-million dollar investments over the past several decades show their commitment to the future of Ukraine. According to a long-term, high level executive working in Ukraine for a multinational corporation, who asked to remain anonymous, one of the main obstacles to development is the fact that agricultural land cannot be bought and sold easily and cannot be used by farmers to secure credit. To get around this, some multinational companies are financing their Ukrainian operations by accessing credit outside Ukraine. However, unable to own land, they are limited in the amount of risk they are willing to take investing in an uncertain business environment in which they consider there is too much bureaucracy and rampant corruption.
Government intervention is critical when it comes to making decisions about land ownership and property rights. Business leaders are anticipating clear government regulations that will make it possible to move forward. “We just need to know what the rules are, so we can make decisions about our business operations.” That’s the unanimous view of both local and foreign business leaders in Ukrainian agriculture.
Efficiency is another area that’s a top priority for those actively involved in the industry. Unsuitable storage conditions are reported to result in a loss of nearly 30% of the grain harvested in Ukraine. Lawrence Korchinski, president of Agrosource International, is working
to reduce losses during storage and transportation of post-harvest grain in Ukraine. “We focus on direct seeding, conservation tillage, harvesting, grain handling and distribution,” he
explained. “It’s important to manage every step in the production process.” Agrosource International is a Canadian based company that provides technical expertise to agricultural businesses in an effort to reduce grain loss due to frost, decay, spoilage and other damage.
A shortage of qualified specialists is a serious concern for Igor M. Buchatskiy, CEO of Sagro Holding. “This is a problem of the entire post soviet region,” he explained. “We recruit and motivate candidates by offering specialised training and opportunities for personal and professional growth,” he continued. Sagro is a Ukrainian based holding company with a focus on increased productivity through modern technology. The holding company includes five separate business entities with over 1550 employees involved in harvesting grain, fruit and vegetables as well as meat production and processing.
“We urge the government to support the business sector by simplifying the tax code and other bureaucratic processes that impede economic progress. The investment interest is there, and once the land question is resolved, agriculture in Ukraine has a very bright future,” said Buchatskiy. UBi
Both local and foreign experts concur that the main obstacles faced by Ukraine’s agriculture sector are land tenure and access to resources.
Farmers, large agri-businesses and even multinational corporations are unable to acquire the land and equipment necessary for large scale production. As a result, the country’s entire agriculture industry remains disconnected and is not as productive as it could be, given that it should be the breadbasket of Europe.
Frustration is running high among foreign investors who believe that their multi-million dollar investments over the past several decades show their commitment to the future of Ukraine. According to a long-term, high level executive working in Ukraine for a multinational corporation, who asked to remain anonymous, one of the main obstacles to development is the fact that agricultural land cannot be bought and sold easily and cannot be used by farmers to secure credit. To get around this, some multinational companies are financing their Ukrainian operations by accessing credit outside Ukraine. However, unable to own land, they are limited in the amount of risk they are willing to take investing in an uncertain business environment in which they consider there is too much bureaucracy and rampant corruption.
Government intervention is critical when it comes to making decisions about land ownership and property rights. Business leaders are anticipating clear government regulations that will make it possible to move forward. “We just need to know what the rules are, so we can make decisions about our business operations.” That’s the unanimous view of both local and foreign business leaders in Ukrainian agriculture.
Efficiency is another area that’s a top priority for those actively involved in the industry. Unsuitable storage conditions are reported to result in a loss of nearly 30% of the grain harvested in Ukraine. Lawrence Korchinski, president of Agrosource International, is working
to reduce losses during storage and transportation of post-harvest grain in Ukraine. “We focus on direct seeding, conservation tillage, harvesting, grain handling and distribution,” he
explained. “It’s important to manage every step in the production process.” Agrosource International is a Canadian based company that provides technical expertise to agricultural businesses in an effort to reduce grain loss due to frost, decay, spoilage and other damage.
A shortage of qualified specialists is a serious concern for Igor M. Buchatskiy, CEO of Sagro Holding. “This is a problem of the entire post soviet region,” he explained. “We recruit and motivate candidates by offering specialised training and opportunities for personal and professional growth,” he continued. Sagro is a Ukrainian based holding company with a focus on increased productivity through modern technology. The holding company includes five separate business entities with over 1550 employees involved in harvesting grain, fruit and vegetables as well as meat production and processing.
“We urge the government to support the business sector by simplifying the tax code and other bureaucratic processes that impede economic progress. The investment interest is there, and once the land question is resolved, agriculture in Ukraine has a very bright future,” said Buchatskiy. UBi