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mostovaya-200

Dear Friends!
 

Dozens of millions of tons of grain, millions of liters of sunflower oil, over hundreds of thousands of tons of nuts… Every year, Ukrainian farmers produce more and more products, which are enough for using by ourselves and selling to other countries. Even during a crisis, the agro-industrial sector makes profit and remains one of the main sources of currency proceeds to our country. However, we are used to see only negative in everything: “hopeless raw materials exporter”, “they ruined collective farms – built nothing new”, “they will introduce a land market – they will take away the last from people for nothing and will sell to foreigners”, “Chernozems are completely exhausted”, “the products are made of glass, injected and overfilled with chemicals”… In our country, it is accepted to speak a lot about the agricultural business, but not many people truly understand what it consists of, what trends and opportunities it has. Everyone keeps telling that we need to change something, but, in the meantime, they are hostile to any innovations and surround them with myths. When preparing for an interview with Alex Lissitsa, CEO of one of the country’s largest agricultural holding, we processed a lot of factual material and polarized views about the Ukrainian agricultural sector. We made sure that we still have many challenges and not so many successes as we’d like. However, it is definitely worth looking into something before yelling “zrada” (treason) right and left.

For example, in the late fifties, there were over 19 ths collective farms on the territory of Ukrainian SSR. Here we should remember that a few years later, these creations of the Stalinist regime, composed of the property, seized from affluent villagers during the collectivization, became one of the reason of a terrible famine in villages, and then turned out to be extremely unproductive and non-profitable, because the peasantry, forcibly gathered in collective farms and living from hand to mouth, worked very reluctantly. Currently, on Ukraine’s market, there are over 40 ths agricultural enterprises, over a dozen of which dispose of a land bank, totaling over 100 ths hectares. The average crop yield of any of these holdings is higher than of small entrepreneurs. Meanwhile, the average and small farmers employ most rural people. That is why, alas, enhancing the efficiency and further growth of agricultural holdings will inevitably increase the unemployment in villages.

Ukraine occupies the world’s leading positions in producing and exporting AIC’s products (over the past decade, only exports to Europe increased 2.5 times). 11.2 mln tons of sunflower, cultivated in Ukraine per year, is almost one third of all sunflower seeds, produced in the world. Ukraine also ranks the first in exporting the sunflower oil – 3.3 mln tons per year, II – in exporting grains and nuts, III – in producing and exporting oatmeal as well as exporting rapeseed. Even though Ukrainian farmers still seriously lag behind Europeans in the effective use of lands. The yield from a hectare is often significantly lower than in Europe. There are many reasons for that. They include the underdeveloped technologies, the outstanding issue of the land market, absence of government support, (for example, as in Europe, where farming households can afford to focus not only on the expenses for a hectare, but on a race for the crop yield). The high rates of our agricultural sector are largely due to the use of huge areas, favorable climate and fertile soil. Unfortunately, both in Ukraine and other countries, the fertile lands are threatened by the destruction due to the erosion and pollution. According to UN data, annually, 12 mln hectares of fertile lands in the world become unfit for agriculture. In Ukraine, there are over 1.1 mln hectares of degraded, unproductive and technologically polluted lands, subjected to conservation, while we still do not have a law on protecting soil fertility.

Of course, all the countries that produce raw materials are at risk: its main commodities may at any time decrease in price and wreck the economy (or gradually decrease in price, forcing to increase sales and still receive decline in their profit). For such states, it is difficult to control their development. They lose benefits from exports of processed products, and, certainly, should seek niche for selling more complex value-added products, launch projects on advanced processing. The process is time-consuming and labor-intensive. However, the Ukrainian agricultural sector in this case has a very high potential. When there's a will there's a way.

Yulia Mostova,
Editor-in-Chief

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