What stops Ukraine from running agricultural reserve?

If Ukraine really wants to become a global player in the sphere of agriculture and food production, it should open free market of agricultural land. This is the point of view expressed by John Tefft, US Extraordinary and Plenipotentiary Ambassador to Ukraine. “Ukraine will be forced to turn the land into commodity,” said Tefft answering The Day’s question after visiting the production facilities of the UkrLandFarming Group. According to him, “the situation with the Ukrainian land ownership is too politicized and complicated.” The ambassador also noted that the US, in its turn, just as well as the European Union, is ready if necessary to provide assistance in finishing the implementation of the land market reform in Ukraine. “This process is not easy. However, in order to be able to implement all agricultural potential and take advantage of all the benefits Ukraine will simply be forced to move in this direction,” Tefft stressed on the importance of completing implementation of the land market reform.

After looking at the Ukrainian land processing technology and production facilities of UkrLandFarming, the largest agricultural holding in Europe, Ambassador Tefft said what he thought about it: “It felt like home.” The American diplomat comes from an agrarian state Wisconsin. According to him, he saw the first-class Ukrainian agricultural company that achieves significant results and works efficiently. The ambassador explained that he was greatly impressed with the advanced technology not only for the Ukrainian level, but even according to the global standards. He meant computerization and precision farming. Tefft said that such an approach is very important because it allows you to gain double profit from the same situation. This means that, on the one hand, the whole country benefits from it, and, on the other hand, population of the whole planet also benefits from it because much more of high-quality products are produced.

According to the company’s information, efficiency of production in UkrLandFarming increases every year. However, the group of companies acknowledges the fact that this year the drought, which especially affected the south of the country, changed the harvest rates. But the overall results of the harvesting are very optimistic. The average yield of wheat was 5.1 tons per hectare. The harvest of corn, especially in western Ukraine, also caused a great joy: the average index is 7.5-9.8 tons, and sometimes it reaches 10 tons per hectare.

In anticipation of the threat of food crisis and amid worsening of weather conditions that negatively affect agriculture the increase in productivity of farming companies is very important. Because it will help to avoid food riots in the world and the rapid rise in prices. Food and Agriculture Organization (FAO) has warned of an increase in prices for meat and dairy products due to extreme weather conditions in the US, the EU, and other world centers of food production. The Guardian reported the recent statement of Abdolreza Abbassian, FAO Senior Grains Economist: “The population is growing and production can not keep up with consumption. Wheat prices have already gone up by 25 percent in 2012, by 13 percent – for corn, and by 7 percent for meat only in the past month. Food reserves (which are stored to create a buffer against rising prices) are at a critically low level.” Jose Graziano da Silva, Director-General of the UN Food and Agriculture Organization is convinced that with a proper global agricultural policy the number of starving people in the world can still be reduced by half by 2015.

In this regard, high hopes are pinned on Ukraine and its agricultural sector. “We think of Ukraine not only as a land where you can effectively farm and manage a successful business,” stressed Ambassador Tefft. The answer lies in a deeper plane. “It is all about the survival of humanity and the important role that Ukraine will definitely play in this process,” he said. The ambassador noted that the United States would like to help Ukraine overcome such challenges. According to him, American banks are willing to finance Ukrainian agricultural companies and American companies also have nothing against wider cooperation with Ukrainian agricultural complex.

Halyna Vasylyk, operating director of the holding UkrLandFarming told The Day that the visit of the ambassador to the company’s facilities will give an impetus for cooperation in new ways with the US companies. In particular, she said that they plan to import American cattle for the development of dairy and beef production of the company. The holding has the first place in dairy sector in Ukraine in terms of industrial production of milk: the daily milk production is 300 tons. Besides, the company also plans to expand elevator capacities and to purchase modern technology.