KYIV – As Ukraine’s parliament gears up to debate allowing sales of farmland, agriculture executives say that Ukraine already is on its way to becoming a world food power.
“In 10 years, Ukraine could exceed the US as the number one world exporter of grain crops,” John Shmorhun, president of AgroGeneration SA, told executives and investors gathered Wednesday for the Empire State Capital Partners New Ukraine Investment.
A farm land market, modern management and investment in modern technology could boost production at a critical time for the world.
“We are going to see 9 billion people in world in the next 20 years,” Shmorhun, an American, continued, referring to a 20 percent increase in the world’s population. During that period, he said, Ukraine could double its grain production from last year’s bumper crop level of 66 million tons.
For starters, of 32 million hectares of arable land, Ukraine does not till 5 million hectares and underutilizes half of the rest, according to a food security report by SigmaBleyzer, a privately held American company with extensive farm investments in Ukraine.
China, India, and North Africa growing markets for Ukraine’s grain exports, said Shmorhun, who recently returned from representing his French company in China and South Korea. In Asia, many consumers like the fact that Ukrainian farmers do not use genetically modified organisms, or GMO.
A similar growth story came from Mykola Kovalski, Marketing Director for Astarta Holding, Ukraine’s largest sugar producer.
After $500 million invested over the last decade, Astarta’s milk production tripled and its sugar production jumped eight-fold, Kovalski told the audience of about 200 Ukrainian and foreign business people.
Astarta, he said, has invested heavily in bioenergy with five units attached to farms around the nation. Producing over 25mw of power, Astarta plans to take advantage of a new law, passed in March, which liberalizes heat and power sales.
“Technologies are improving,” he said, reviewing his company’s circular integration of farms, food processing and energy generation.
He and other panelists agreed with Shmorhun that Ukraine could double grain production in 20 years.
“Land market reform is key,” Taras Vysotskyi, general director of the Ukrainian Agribusiness Club, the nation’s leading farm lobby.
“With land market reform, we will see either very fast growth of the sector – more than 5 percent – a year, or we will see stagnation,” warned Vysotskyi, whose association favors replacing the current leasing system with a land market.
Ukraine’s agriculture needs $5 billion in investment each year to grow at a fast pace. At present, it is only getting $1 billion a year.
It is unclear if Ukraine’s Rada, or Parliament, will approve a land market bill before its summer session ends, in July.
Agriculture Challenge – Logistics.
“We are missing 15 million tons of inland storage facilities,” Shmorhun said, referring to modern grain silos. “As we saw last year, Ukraine does not have enough grain cars, not enough maneuvering locomotives.”
The new leaderships of railroad, a state-owned monopoly, says it is buying new cars and locomotives. The goal is to have this new rolling stock in place in time for the fall harvest.
For comments and story tips, please contact UBJ Editor in Chief James Brooke at firstname.lastname@example.org
Photo: John Shmorhun, president of AgroGeneration S.A., talks Wed. to a participant at the Empire State Capital Partners New Ukraine Investment Conference in Kyiv’s Parkovy conference center. (James Brooke)
The UBJ website, like most websites, uses small text files called cookies. This note provides information on what cookies are, which cookies The UBJ uses, and how they can be controlled.
If you wish to restrict or block cookies you can set your internet browser to do so- click on the following link for further information: Cookies statement
- What are cookies?
- Which cookies does The UBJ use?
- How to control cookies
- Full list of cookies used by The UBJ
Read about Cookie Statement
Welcome to the UBJ
The UBJ is a subscription based service specifically designed for senior executives. To use the service, please Register and we will automatically grant you 7 days Free access! Or Subscribe online and get 15% discount immediately (promocode UBJ000555). We hope you will enjoy using the site over this period and come to the conclusion that it is an indispensable intelligence service on all that is happening in what is Europe's new frontier economy.
To subscribe immediately please click the link:
If you have already Registered and you see this window, all you need to do is to Subscribe.
I already have an account Sign in