Agribusiness Potential: Expert Estimates

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Planting

Agricultural experts Mykola Gorbachev, Mariya Kolesnyk and Viktor Ivanchyk answer three key questions to give their expert estimates on the current state of Ukrainian agriculture and its future potential.

We asked three agricultural experts to answer the following questions to give a better understanding of Ukranian potential in agribusiness:
1. To what extent has the potential of Ukrainian agriculture been unlocked?
2. What steps should be taken to realise this potential and how long it is going to take?
3. What Ukrainian agrarian businesses can do to improve their efficiency?
Here are the answers:
Mykola Gorbachev, President, Ukrainian Grain Association
Mykola Gorbachev

1. I think that Ukraine has realised its agrarian potential by less than 20%. In particular, as far as grain growing is concerned, we have achieved half of what the progressive mankind – from Europe to the USA – has. In terms of agricultural processing, we have not lived up to half of our potential.
2. We will be able to get closer to realising our potential at least by 50% in 10 to 15 years. We can speed up the process by more actively sharing technologies and inviting western investors interested in working and making profits in our country.
3. Efficiency is about using land as a resource. It is important to understand that the land market encourages owners to capitalise their plots by installing irrigation, using slow-release fertilisers and so on. Therefore the land market itself will provoke an increase in production and a more efficient use of land as a resource. It will also stimulate the strengthening of the corporate movement in Ukraine.
Mariya Kolesnyk, Deputy Director, ProAgro Group
Mariya Kolesnyk
1. I believe the potential of Ukraine's agribusiness has been realised by less than 50% primarily due to continuous legal uncertainty, including with regard to the land market. Until recently, only sectors related to crop farming developed rapidly in Ukraine. In the processing segment, manufacturers mostly focused on the domestic market. Now that it is saturated, we can expect a sharp leap in development, especially among sector leaders looking to enter foreign markets.
2. The cancellation of the land sale ban and the adoption of a moratorium on any legal amendments concerning the agrarian sector, as well as counteraction to hostile takeovers of agrarian businesses. It is necessary to stimulate the manufacturing of livestock products by industrial companies through the adoption of programmes which would promote domestic consumption. The introduction of new technologies in grain and oil crops production would require putting in place conditions to make hi-tech equipment cheaper by setting up semi-knocked-down assembly facilities on our territory. I am talking about equipment produced by the world's leading manufacturers. Cheaper loans can also give an impetus to the development of our agribusiness.
3. First of all thanks to the use of new equipment as currently, grain harvest losses by old harvesters can reach up to 30%. If funding becomes more accessible, agrarian companies will be able to buy seeds of higher quality and hybrids and follow the required agrotechnologies. Keeping track with the use of new means of communication and control, drones, software and so on will allow businesses to optimise costs and increase the efficiency of cultivated land, and hence the industry as a whole.
Viktor Ivanchyk, CEO and founder, Astarta Agroindustrial Holding
Viktor Ivanchyk

1. We all understand that the potential of Ukrainian agribusiness is yet to be unlocked. Despite a gradual increase in average yield in the recent years, our country is lagging far behind the global leaders. There is room for a 30-50% growth at the least.
At the same time, in my opinion, we should be closely monitoring global consumption trends. In particular, demand for agricultural products, which were previously considered "niche", is growing dynamically. These are energy crops, various legumes, organic products. With the right approach to technology and marketing, we can earn much more per hectare. And do this while improving the ecology and supporting the fertile layer of soil!
2. IT and agribusiness are showing the highest development dynamics in Ukraine. I see a great future in the synergy of these two industries. Modern computer technologies, including processing of a large amount of information (so-called big data), can significantly improve the management of agricultural production and reduce risks.
3. Precision farming, new approaches to the introduction of fertilisers and crop protection agents, and the use of the latest developments in the genetics of plants and animals offer a great potential, too. It takes time to implement these innovations, train employees and rebuild the processes. It also takes time to develop new plants, rotate crops and develop logistics. I would describe it as a never-ending process of improvements in companies and the sector as a whole.

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