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Ukraine won't become agrarian superpower even after opening of land market

Author : Pavlo Vernivsky

Source : 112 Ukraine

Real figures once again prove how absurd is the belief that agriculture can become a driver of economic development in Ukraine
23:27, 12 February 2020

112 Agency

In 2018, capital investments (combines-harvesters, agricultural machinery, elevators) in the agriculture of Ukraine amounted to 64.9 billion UAH (2.4 billion USD). This is approximately 1,545 UAH per hectare. At a rate of 27 USD/1 UAH, this is 57 USD per hectare.

Why so little amounts? Just because we have no market?

In 2016, capital expenditures in US agriculture were approximately $ 30 billion. This is near 73 dollars per hectare of land. As you can see, there is a land market in the US, but the situation is not much better.

And what about the EU? In 2015, total capital investment in agriculture in 28 EU countries amounted to 56.8 billion euros. This is 312 euros per hectare.

At the same time, the data differ significantly between countries. In the Netherlands, capital investments amounted to 4.5 billion euros, and this is 2 500 euros per hectare.

You need to understand that the Netherlands has developed small farming, and this means that if every farmer buys agricultural machinery, this means rather large capital investment. In Poland, it is 1.5 billion, or 100 euros per hectare.

Another interesting thing. The total level of capital investment in the United States is 3.8 trillion dollars. Capital investment in agriculture is only 0.78% of total capital investment!

In the EU, total capital investment is $ 3.9 trillion! Capital investments in agriculture - 1.5% of the total.

In Poland - 124 billion. Agriculture forms 1.2% of the total.

Even if we assume that the level of capital investment in Ukraine will be higher than in Poland, and will reach the average European level, which I deeply doubt. Then we will get only 13 billion dollars. This is only a tenth part of the capital investment in Poland.

And these figures once again prove how absurd is the belief that agriculture can become a driver of economic development in Ukraine. Personally, I can’t imagine how we can reach the level of Poland with such numbers. And here we even did not mention the Polish level of foreign investment, the level of exports and jobs.

Related: Business partners Bogdan and Solsky got control over agricultural policy of Ukraine, and NABU do not investigate them, - press

Related: Ukraine's parliament might consider market bill this week, - Agriculture minister

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