A victory with warnings

This year, Vinnytsia oblast, justly called “the sugar Donbas,” harvested 2,670,000 tons of sugar beets. This figure, which is 30 thousand tons more than last year, is the highest in the past 16 years. Vinnytsia residents may be rightly proud. By the end of the season the region plans to harvest 300,000 more tons of the sweet, edible roots. In connection with the sugar record, Oleksandr Dombrovsky, the head of the oblast administration, invited journalists to see the process of sugar beet harvesting and processing at a sugar refinery.

The journalists began their trip through the sugar-producing Vinnytsia region in the village of Mala Klitynka, where harvesting was in full swing. Workers from the Rikon agricultural farm dug, sorted, and counted the gathered harvest. The guests wandered around piles of beets, admiring the endurance of the pickers, who produced this “white gold” not only with machines but mainly with their ordinary work-hardened women’s hands. Governor Dombrovsky’s words may be considered a tribute to them: “Today almost the entire harvest has been gathered; only about 10 percent is left in the fields. It will also be transported to sugar refineries soon.”

This fall, harvesting the beets has not been easy as the dry ground was hard to work with the help of machines. But the difficult harvesting conditions “sugared” the beets — the sugar content is 17.2 percent. A few years ago experts noticed that in dry weather sugar beets sweeten while rainy weather makes the sugar content drop. It only started recently, after most of the crop had been harvested.

But harvesting is only half of the work. It is equally important to process the beets on time to ensure quality. Every day that a refinery does not operate creates additional problems for sugar processors because beets are a specific product, and the processing is tedious and energy-consuming.

After familiarizing themselves with beet harvesting, the journalists made their way to the Brodetske sugar refinery to get a clear idea of the entire cycle from field, harvesting, processing, to sugar. In addition to the largest sugar refinery in Brodetske two more plants, Makharynetsky and Kyrnasivsky, have resumed operations. In total, the oblast has 21 sugar refineries. They have received 2,138,000 tons of beets and processed almost 65% of the raw material. To date the oblast has given Ukraine 158,000 tons of sugar.

One can crow about records but reality has a way of putting everything in its place. If increased harvests become a trend, the farmers of Vinnytsia will face the problem of selling it. Dombrovsky’s forecast is quite unpleasant: “If we don’t solve the problem of the beet market, we will have to decrease its cost value by cutting wages, which is very undesirable.”

In view of the high sugar beet yield, Vinnytsia oblast is also especially leery of a new expansion of sugar cane. The governor noted that the oblast administration will do its best to prevent it from reaching the refineries.

INCIDENTALLY

Ukrtsukor, the National Association of Sugar Producers of Ukraine (NASPU) is requesting the Verkhovna Rada not to pass draft laws proposed by the government, which intend to change the mechanism of state control in the sugar market. They entail canceling the B quota (sugar supply under international contracts) and C quota (overseas sugar sales only), as well as mandatory export of sugar made of imported raw material. Moreover, according to the association’s information, a draft law “On Setting a Tariff Quota for Importing Raw Cane Sugar to Ukraine” is being prepared for parliament.

Experts emphasize that these documents have been drafted without taking into account the position of sugar producers, who “do not support them in principal.” The NASPU believes that the proposed changes will damage the national sugar industry because they will spark uncertainty, limit prospects for developing farms and enterprises, and creating export sugar reserves and international sugar supply contracts.

According to the NASPU, right now it is economically unjustified to raise the question of importing raw sugar to Ukraine because national sugar production capacity is twice as high as the needs of the domestic market. There is also the problem of overproduction of domestic beet sugar.

The Ministry of the Economy’s decision to cancel the above quotas is based on the fact that last year they were not implemented. For the current year the NASPU forecasts sugar production from the 2006 beet yield at over 2.1 million tons, which is a record in the past few years and exceeds the domestic demand, which is between 1.8 and 2 million tons, according to various estimates.

The Ministry of Agricultural Policy has a different view of the sugar overproduction problem. It is initiating the earmarking of 470 million hryvnias from the state budget for the Agrarian Fund to purchase 155 tons of beet sugar. As deputy minister Yurii Luzan said at a meeting of the Parliamentary Committee on Agrarian Policy and Land Relations, the Agrarian Fund will purchase sugar to add it to the state food reserve with the purpose of preventing possible price instability on the domestic market. He also said that the Ministry of Agrarian Policy has proposed to increase state budget expenditures by 430 million hryvnias to partially cover the credit rates issued to farmers.