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Piecemeal land ownership complicates farm management. Privatization after the end of Communism left Ukraine with thousands of 5-12-acre farms too small to invest in better technology, and a ban on land sales that makes it harder to combine farms into productive units.
Only 8,500 of an estimated 50,000 farms can muster the resources to compete in world markets. These farms, from 1,200 acres to 100,000 acres or more, are operated by Ukrainian farming companies or foreign investors who assemble their land by leasing it from hundreds of small landowners.
“You may have modern ideas about how your farm should be run,” says Sifferath. “But it’s hard to get enough educated employees and tough to get them following your plan.”
“They had 80 years of top-down driven management where the state told them what to do,” Burrack explains. “That really takes a toll. To get them to try different, modern ideas, you have to sit and watch or it just didn’t happen.”
Other challenges include a lack of on-farm storage and marketing alternatives that would give Ukrainian farmers more power over when and how they sell their crops.
There’s also a problem with corruption.
“Everything involved cash under the table, and there was crime – crops stolen out of the field. We had two 4WD drive tractors just disappear off the docks,” says Burrack, who stuck with it for five years and still believes in Ukraine’s agronomic potential.
“When our in-country manager was hired away, we didn’t have someone we could trust. Otherwise I would be there today. You have to have somebody reliable on the ground,” he says.
Like Burrack, government leaders, European investors and grain-hungry nations around the world are betting that investments to modernize Ukrainian farming methods and infrastructure can pay off with big productivity gains and a growing flow of exports.
This summer, China agreed to loan Ukraine up to $3 billion for agricultural improvements reported to include construction of a fertilizer plant and purchases of Chinese equipment and seeds – a loan that will be repaid in part with agricultural output.
At the farm level, Ukrainians are beginning to make more use of inputs to increase yields, and the country is on the upswing as a corn supplier, becoming a “formidable competitor in regional grain markets,” according to Sifferath.
Further down the supply chain, “there’s been a lot of investment by Ukraine and foreign interests in export facilities, and their export capacity has grown quite a bit,” he reports. “Ukraine has Nibulon, its own export facility, and runs barges up and down the Dnieper River. Bunge built a new terminal this year near Nibulon.