Not all rosey farming in Ukraine either
Though agriculture is the largest single contributor to goods sold abroad, a World Bank report published on Oct. 3 said that farm productivity and yields in Ukraine are a fraction of what they are in other European countries, blaming the land law. Wheat yields are less than half of those in Germany, it noted.
Agroindustrial companies say they would be able to boost yields and make higher profits if they owned the land they farm. Myronovskiy Hleboproduct SA, a Ukrainian poultry producer that also grows wheat, sunflowers, and other crops, says the cost of having to manage hundreds of individual leases is a drag on investment, particularly at a time when wheat prices are depressed.
“Given the present level of grain prices, the cost of leasing land, and the headache associated with extending lease agreements, it’s very expensive to expand the areas we farm,” says Yuriy Kosyuk, its CEO. As long as the ban remains in place and the wheat market stays depressed, the company is unlikely to expand its farming operations, he says.
Agrotrade Group in Karkhiv lost 120 hectares of arable land in 2017 because of the vagaries of the leasing system, says CEO Vsevolod Kozhemyako. Hired thugs have been known to strong-arm small land owners into switching partners on leasing contracts, giving rival companies and local political officials tied to them an unfair advantage, he says.
“Politicians have fooled people with the myth that an open land market will lead to poverty and destitution,” Kozhemyako says. “But people are not getting the money they are entitled to if they could sell the land.”
Institutional corruption remains a key concern for Ukraine, which fell in the Transparency International’s corruption index to 131, down four notches from 2013.
As the first of the winter’s snow quietly blanketed a farmyard dotted with idled tractors and other equipment, Nazar Terekh, a crop specialist who works for Mriya, sought the warmth of a barracks used to house seasonal workers.
As other workers in dirty overalls filed past, Terekh quickly flipped through multicolored maps on his tablet to show visitors a cluster of sunflower land with blacked out squares, because some local owners decided not to renew their leases.
That complicates issues for Mriya harvesters, which have to be carefully maneuvered to avoid those plots, says Tarchynskyi, the foreman. “We always need large areas of land given our machinery is designed for a wide sweep,” he says. “It’s difficult to work because we have this checkerboard effect.”