10 April 1998

Ukraine tries to emerge from its legacy of muddle and inefficiency

UKRAINE was once the breadbasket of the Soviet Union, and the collectives that in their own inefficient way contributed to this position struggled on for some 70 years.

But then perestroika blew the wind of change across the landscape and Ukraine found it hard to fend for itself. But surely, with a favourable climate and over 30% of the worlds black soil plain, it had the potential to be a major agricultural country? There were after all more than 30m hectares (75m acres) in use, and the main crops were grain, sugar beet and sunflowers. In the south there were large areas of vegetable and dairy production, and cattle and pigs were also farmed on a large scale.

The emphasis, though, is on the word "potential". The legacy of the old Soviet system was deeply ingrained and new market-driven farming systems were needed. How far has it achieved this, more than five years on? Does it pose a threat to Western Europe in terms of competing exports, and what opportunities are there for imports from countries like Britain?

Independent consultant UkrAgro-Consult reckons it has its finger on the pulse. It has developed a method of interpreting official figures issued – sometimes more in hope than confidence – by the official State Committee on Statistics.

Director Sergey Feofilov is philosophical about the chances of his country exporting. His company has close links with GAFTA in London and he thinks it will be many years before Ukraine poses a threat to western Europe. Lack of cash for fertilisers, pesticides and herbicides depresses yields, and in any case, he says, production is geared to feed quality, not the more profitable milling or malting standards.

"The improving quality of life in Russia means that country will require imports of meat and of feed wheat to fatten their own livestock," he adds. The best potential, Dr Feofilov feels, is with sunflowers – a significant crop in Ukraine. Indeed the European Unions Tacis technical assistance programme subsidised an exhibition last year to attract foreign investment in the Zaporizhzhia region, which has more than 210,000ha (520,000 acres) of sunflowers. But local sunflower processing factories are inefficient, and Dr Feofilov estimates that only 8-10% of the 450,000t produced each year could actually be refined in Ukraine.

Oilseed rape is seen as another crop of the future, with 22,000ha (54,000 acres) grown currently. Ironically, it used to be grown much more extensively in Soviet times, when it literally oiled the wheels of the USSRs war machine.

Western expertise is eagerly sought and willingly given. Ukraine is the second largest beneficiary after Russia of funds under the Tacis aid programme and the budget for 1996-99 envisages a total contribution of some £358m. Current projects include the development of land registration, assistance for processing vegetables and meat, and assistance in agricultural marketing and trade support structures.

Apart from these EU aid programmes, a joint Anglo-Dutch initiative is organising the first ever international agricultural and horticultural exhibition in the sports palace. It took place in the first week of April, but already the Ukrainian show organiser is looking to stage a bigger and more comprehensive event next year.

Newark-based Agricultural Travel Bureau, which organises study visits to events ranging from SIA in Paris to tours of farms in China, had been hoping to organise a visit to this years show, but had to call it off due to lack of interest.

Same disinterest

Ironically the same disinterest made itself apparent in the reverse direction. Ukraine reserved a plot at last summers Royal show, next to Georgia. In the event the site was empty, though Georgia (a smaller and less-well off country) put on an exhibit.

But Travel Bureau spokesman Simon Cox is optimistic that there will be interest in next years event in Kiev.

The post-communist free market economy has seen an impressive growth in private shops, some of them pump-primed by the EU, and there are also little free enterprise kiosks on almost every street corner. But its an indictment of the Ukrainian system of agricultural production and distribution that amongst the improbable mixture of Nescafe, caviar, batteries, bras, and Snickers bars on offer, there are also kilo bags of muesli. But a close check revealed that every one was from either Germany or Poland.

Surely the former breadbasket can product the oats, wheat, nuts and other ingredients that go to make up the average muesli?

"I eat porridge made with Ukrainian oats every single day." Peter Thomson told me in his Scottish burr. He is the director of a second company confusingly also called Ukragrokonsult, but nothing to do with Dr Feofilov. Mr Thomson did admit though that his breakfast oats were not easy to come by, "though the taste is as good as at home."

Growing as a package

His company runs an operation selling technology for growing vegetables as a package – from seed to fertiliser, and from drill to sprayer. The equipment they supply is entirely Western European, notably British, Dutch and Danish.

"There are already people starving in this country, and a lot more will be starving by the end of the year," he says. He puts this down to the lack of agricultural reform, and adds that land which was once owned by the state or a collective may now be sold off into foreign ownership.

But there are severe economic worries. There is talk of the country effectively going bankrupt by the end of the summer and the local currency, the hryvnia (pronounced "Greevna"), having been quite stable, is now dropping daily against the dollar.

But despite all this, there is every chance that Ukraine can emerge from its former legacy of muddle and inefficiency, and, with restructuring can again become the breadbasket it once was.

UkrAgroConsult director Sergey Feofilov reckons it will be several years before his country poses a

threat to west European agriculture.

Above:Inside the central market, Kiev. Above right: The author outside the house of Kavalenko, a 16th century Cossack horseman who exported grain to Russia. Right: A venerable-looking crawler ambles past whats hoped to be the site of a farm exhibition in Kiev.