Thursday 24 July 2014

Ukraine: the feed trough of the Soviet Union?

It's a fact that every article ever written about Ukraine agriculture starts off with the assertion that the country was once the bread basket of the Soviet Union.

Except it wasn't.

It did produce a lot of grain but my local reliable sources tell me that at the time quality was low and most was used for animal feed.

But Ukraine, the feed trough of the Soviet Union doesn't have the same ring to it.

Ukrainian agriculture consistently fails to live up to expectations and production figures stubbornly scrape along at unimpressive low levels although this year is looking like it might be slightly better than the average.

Compared to the ten year average for EU27, Ukraine grain yields ranks 24th right behind Romania and Estonia and just ahead of Greece and Cyprus.

Hardly stuff of legends.

Recognising that a lot of Ukraine’s wheat comes from subsistence farmers who lack technology and finance for seeds and fertilisers which skews the average yield downwards, the professionally run well financed agribusinesses don’t do much better either.

Wheat yields published by four of the big agribusiness rarely exceeded 4.5mt/ha which would rank them 13th out of an EU29. 

Better but still not great when you consider the average yield for the top five producing countries was over 8.4mt/ha.

So why does Ukrainian agriculture consistently fail to live up to the hype?

Depressingly it's a long, long list of technical, economic and political issues but less depressingly it is relatively easy to pick off some of the low hanging fruit and to see an immediate uplift.

I class those changes in to three areas.

Those that cost nothing but involve a change to management, often not doing something like not "sealing in the moisture" which is a cultivation practice that can best be described as recreational.

Those that cost a relatively small investment such as changing the five year old sprayer nozzles.

Then there is the big investment expenditure such as buying more efficient and effective equipment that allows you to do the job better and in a tighter timing window.

Then overarching all of this is the attention to detail brought about by bringing local staff on with the new approach.

A positive from this is that once those new, young managers are introduced to new methods and management styles they rarely want to go back.

The future is bright for Ukraine even if it doesn't much feel like it right at this moment.