The year 2018 did not see record high yields, like in 2016. The reason for this was the weather. Dry May began to destroy grains and vegetables, and then the rainy summer months, mixed with unprecedented heat, did the rest. Part of the crops was lost. Producers of grain are not lucky this year. Ukraine was shaken but unhurt. We have an updated crop forecast of 63 million tons of cereals, of which more than 24 million tons are wheat. Food classes account for 60%, the Ministry of Agrarian Policy calculated. The export forecast for the 2018/2019 marketing year is 42 million tons. It seems like a good prospect, but there is one catch.
The fact is that Ukraine with its agro-industrial complex could produce much more grain. There is some information that in terms of the effective use of agricultural land, Ukraine is capable of feeding 1 billion 200 million people. The other sources give a twice more modest figure of 600 million. It looks like Ukrainian scientists broke away from the reality. Perhaps, this is the case, but the fact remains: Ukraine has 27% of the world black soil; the world is in need of increased food production, and no one can provide such a large increase as Ukraine. At the same time, Ukraine lags in the third ten countries in terms of wheat yield. Why?
Let us consider two problems of the domestic agro-industry. First: in fact, an increase in yield. The second is the processing of this very crop into new products. It was calculated: in order to increase gross output three times, it is necessary to invest about 70 billion dollars in the Ukrainian agricultural industry. These funds are just gigantic since we recall that in order to receive the next tranche of the IMF, which is measured at 1.9 billion dollars, Ukraine is to a number of concessions and even sacrifices, I mean the decision to raise the gas price for the people. We simply have to opportunity to get the amount, which is 35 times higher.
Let us leave aside the question of the effectiveness of the production itself, the choice of crops, plant varieties and animal breeds, the legal issues of land use. Let us talk about the infamous domestic processing industry. I will say, probably the obvious things. It would be possible to squeeze the oil from the sunflower seeds, grown in our fields, and export barrels of sunflower oil. But this is not the end of the story. Oilcake can be processed into feed and dietary supplements, and they can also be sold both domestically and abroad.
But the point is not only that one of the farmers lacks patience. The processing industry, which is represented in Ukraine in its nascent state, also requires considerable investments. Today we have few truly modern processing industries. Agricultural producers would be happy to invest in the processing in order to get more profit in the future, but they simply do not risk doing so in the face of general economic uncertainty. A vicious circle: there is no money because they do not earn in processing, and there is no normal processing because they do not have enough money.
That is why it is easier and cheaper for a peasant (especially if we are talking about small farms) to leave part of the crop on the field (or give it to his cattle) than to spend money on diesel, collect fruits and vegetables, and then donate them at penny prices. As for collecting tomatoes, for example, processed into tomato juice or tomato paste, this is not an easy task. Small agribusiness is not able to organize processing, and it is extremely unprofitable for suppliers to deliver the product because of the unprofitability of such an operation.
Actually, Ukraine’s infrastructure for the preservation of fresh products is also a big problem. We suffer from the lack of specially equipped modules in order to save, for example, an apple gathered in August until winter. Therefore, it is easier to feed this apple to the pigs, and in the winter to import tomatoes or apples from Poland and Turkey. It is difficult even to determine how many losses a similar management style causes to Ukraine. And this is despite the fact that in the context of global climate changes, they have a lesser effect on Ukraine than on the countries of Central Europe.
Well, standing apart from global trends and remaining for our partners a raw materials appendage, Ukraine only increases the successful chances of the other states. For example, for the United States, which is in the top most developed countries in the agrarian world. Of course, we do not compete with the US for agricultural markets, but while Ukraine is straining to think how to turn fruit and vegetables into squash, and sunflower into butter, the US is already talking about the era of biotechnology.
They have calculated that the internal "bioeconomy" will be able to satisfy 90% the need for organic and chemical fertilizers and 50% the need for liquid fuel. Today, every million liters of bioethanol directly creates 38 jobs. That is, new jobs appear now not in factories and offices, but in agricultural regions, but in the field of high biological technologies.
The fact is that Ukrainian farmers have the same products and substances as the Americans. For example, waste plant production, the unnecessary leaves and stems. In America, all this green mass remains in the amount of about 280 million tons per year. Ukraine does nothing with this waste plant production. And in the US, a part of this material is being used for producing chemicals, electricity, lubricants, plastic, adhesives, and fuel.
Sugar (glucose), starch (sugarcane) or cellulose (straw, sawdust) are becoming raw materials for most products of the bioeconomy. One of the most modern American bio-plants is the DuPont plant, which produces 100 thousand tons of corn bioplastics per year. This bioplastic surpasses nylon in cost and consumer qualities.
Or is there not enough corn in Ukraine? Of course, not. This is one of our traditional export positions. But we are selling corn abroad, while the United States is preparing to produce composite materials from vegetable raw materials - even stronger than steel and Kevlar, a heat-resistant and strong synthetic fiber. America already lives in the near future, and we are still crowding in the deep past, where “a cherry orchard by the house, above the cherries beetles hum.”
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