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Would Ukraine become an agricultural monster?

Author : Oleksandr Okhrymenko

10:09, 29 February 2016
Would Ukraine become an agricultural monster?

Author : Oleksandr Okhrymenko

Grain is one of the products that Ukraine can grow and can sell for export

10:09, 29 February 2016

gazprom.ru

The U.S. Ambassador to Ukraine Goeffrey Pyatt suggested that Ukraine could become an agrarian superpower. The idea is not new, a lot was already said before him. Indeed, Ukraine could become a kind of agrarian monster in the world, then it will be respected or, rather, be afraid of: it will sell or will not sell food in the world. If Russia can boast of its oil in the world, why Ukraine cannot boast of its sunflower oil? Speaking of sunflower oil.

Related: Geoffrey Pyatt, - Ukraine should be agricultural superpower

Ukraine really is a world leader in the production and sale of sunflower oil. Ukraine produces about 30% of sunflower oil in the world, and it accounts for about 54% of total world exports of this product. By the way, in 2001 Ukraine sold on the export of sunflower oil in 10 times less. Nevertheless, during this time, much has changed, and the export of sunflower oil was one of the most important areas of Ukrainian exports. Its share in the export of Ukraine is about 8-10%. So in this area of ​​the agricultural business in Ukraine has made great strides. Largely due to large foreign capital, which made Ukraine an oil monster. It would be logical to further increase the production of this product. Although we should not forget about the problem with the fact that the cultivation of sunflower seeds significantly reduces the fertility of the land. So it is very dangerous to uncontrollably grow only sunflower seeds - this can lead to rapid depletion of fertility Ukrainian lands, and no black soil will not be saved. But, again, it can be solved due to the rotation, but without a land market, where agricultural land is owned by large agricultural businesses, organizing a full rotation is not possible. Rental - it is always ineffective. There are no guarantees, so manufacturers try to squeeze the most out of the ground as long as the lease agreement. Ownership of agricultural land can solve this problem.

Related: Capital investment in agriculture went up by 27% - Minister

The same goes for cultivation and export sales of corn. It is the second largest agar culture in Ukraine after the sunflower seeds. The total world production of maize in Ukraine is about 3%, but among the exporters of maize in Ukraine accounts for about 12% of world exports of this crop. And from time to time even Ukraine takes 2-3 place in the world in the export of maize. This technical culture has now a stable global demand, and Ukraine, with its black soil is able to feed the world with these products.

As for wheat, the share of Ukraine in the world production of this crop does not exceed 3%, while the share of Ukraine's exports is about 10% of the global market. Quite a significant position is occupied by Ukraine in the global barley market and more or less prominent position in the market of oats and rye.

Corn, grain, and grain again – these are the products that Ukraine can grow and can sell for export. Now the grain harvest is at the level of 50-60 million tons, but with the use of new technologies can bring up to 100-120 million tons. In addition, it needs the land market, where large multinational corporations will own the land in the property, and then they will be able to invest in the development of the agricultural business.

Related: IFC corporation invests $300 million in Ukrainian agriculture

As for the meat market, then Ukraine can only boast of the successes of the poultry. But here, the positions are small. Ukraine's share in the export of poultry meat world market is just 2%. Although it is a success. Once upon a time Ukraine was not an exporter but an importer of poultry meat. With regard to beef and pork, Ukraine produces and exports not that much. Here it is difficult to expect something new. So far, the poultry meat - that is all Ukraine has to offer to the world market.

As for dairy products, the position of Ukraine on global market are weak. Earlier Ukraine had 4th place at the global market of cheeses, now it is not even among ten world exporters. Ukraine controls about 1.5% of the market of export of milk powder and less than 1% of butter exports. And this is all. Maybe there are oligarchs who want to invest money in the dairy business?

Related: 30% of people in agricultural sector in Ukraine work unofficially

So, what do we have as agricultural superpower? So far, only sunflower oil and grain. Other areas are unimportant to the economy as a whole. But now it remains the case for small - to run the agricultural land market and resell it to large multinational companies, including those from the United States. Most likely, Goeffrey Pyatt thought about it, when he said that Ukraine is doomed to become a monster in the agricultural world. To do this, it might be advisable not only to launch the market of agricultural land, but cut it to scrap most of the Ukrainian industrial enterprises, and to cultivate the land and plow a field. Why not. It just meets the U.S. guidelines, and will be largely welcomed by the authorities of Ukraine and the EU. Industry explicitly prevents Ukraine to become rich and successful country.

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