Agricuture in Ukraine

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Agricuture in Ukraine





  1. Potential of agriculture
  2. Major crops
  3. Agriculture machinery
  4. Problems of this sector of economy
  5. Investment in agriculture



1. Potential of agriculture


Ukraine is blessed with rich farming and forestry resources. According to the Statistical Year Book of Ukraine (1996), about 71 percent of the countrys surface (41 million hectares) was used for agricultural activities.

About 80 percent of the agricultural area is arable land, two-thirds of it the agriculturally rich "black soil" (chernozem). The primary food harvest products are barley, maize, potatoes, rice, soybeans, sugar beets, and wheat. The primary meat products are beef and veal, lamb, pork, chicken, horse, and rabbit. In terms of value, the largest agricultural exports in 1998 were refined sugar, raw sugar, beef and veal, sunflower seed, and fish. The total value of agricultural exports in 1998 estimated $1.898 billion. The total value of agricultural imports in 1998 was $999 million. The largest single crop produced in 1999 was potatoes at 15.4 million metric tons. The number-two crop was sugar beets at 13.89 million metric tons, followed by wheat at 13.47 million metric tons. The main livestock product was beef and veal with 786,000 metric tons, followed by swine with 668,000 tons, and chicken with 194,500 tons.

In recent years, agricultural production has declined drastically because of a decrease in the number of tractors and combine harvesters in working order and to the lack of fertilizers and pesticides. According to official data, between 1991 and 1997, the number of tractors in use decreased from 497,300 to 361,000. (In order to operate efficiently, it is estimated that the country would need 515,000 tractors in use.) Similar shortfalls exist for harvesting combines. Between 1990 and 1997, the consumption of pesticides and fertilizers per hectare declined about 78 percent. From 1995 to 1999, crop production declined by an average of almost 10 percent per year, while livestock production declined by an average of 9 percent per year. These shortfalls in agricultural inputs reflect declining investment in agriculture, and feed directly into declining production.

Under communism, agricultural lands were held by the government and worked by the people, who owned no land. Privatization planned to shift most such land into the hands of individuals and farming collectives (jointly held farming cooperatives). By August 1995, the transfer of lands into private hands had begun. Over 8 million hectares of land had been privatized, with plots averaging 5 hectares. By 1996, most of the agricultural land in Ukraine was in collective and private hands, although 40 percent was still owned by the government. Household plots and private farms accounted for about 15 percent of the Ukrainian territory and they filled an important role in the delivery of products to the marketplace.

In general, the agricultural sector is experiencing serious internal difficulties, due to the transitional nature of the economy. A new policy and direction for Ukraines agricultural sector is necessary. Agriculture poses the greatest challenge to the survival of Ukraines political leaders, because almost half of the Ukraines population live in rural areas.

About 57% of the total land area is arable, with another 11% utilized as permanent pasture land. Agriculture accounted for 17% of GDP in 2001. As in other former Soviet republics, total agricultural production has dramatically declined since 1990. Although the rate of decline is slowing, yearly declines still prevail. The average annual decline during 19902000 was 5.8%. By 1999, the agricultural sector was only producing 47% as much as it had during 198991. Production amounts in 1999 included (in 1,000 tons): sugar beets, 13,890; potatoes, 15,405; wheat, 13,476; dry peas, 510; fruit, 1,594; sunflower seeds, 2,750; cabbage, 1,015; grapes, 270; wine, 73; soybeans, 42; and tobacco, 3.

Ukraines steppe region in the south is possibly the most fertile region in the world. Ukraines famous humus-rich black soil accounts for one-third of the worlds black soil and holds great potential for agricultural production. However, the soil is rapidly losing its fertility due to improper land and crop management. Ukraine typically produced over half of the sugar beets and one-fifth of all grains grown for the former USSR. In addition, two of the largest vegetable-oil research centers in the world are at Odessa and Zaporizhzhya. Agroindustry accounts for one-third of agricultural employment. To some extent, however, agroindustrial development has been hampered by the deteriorating environment as well as a shortage of investment funds due to the aftermath of the nuclear power plant disaster at Chernobyl. According to estimates, nearly 60,000 hectares (148,250 acres) of arable land in the Chernobyl vicinity are now unavailable for cultivation. Out of 33 million ha (81.5 million acres) of total arable land, more than 17 million ha (42 million acres) are depleted, 10 million ha (24.7 million acres) are eroded, and another 10 million have excessive acidity. Furthermore, 17% of arable land is located in areas where there is risk of drought.


2. Major crops


The climate of Ukraine is roughly similar to that of Kansas: slightly drier and cooler during the summer and colder and wetter during the winter, but close enough for comparison. The weather is suitable for both winter and spring crops. Average annual precipitation in Ukraine is approximately 600 millimeters (24 inches), including roughly 350 millimeters during the growing season (April through October). Amounts are typically higher in western and central Ukraine and lower in the south and east.

Of Ukraines total land area of 60 million hectares, roughly 42 million is classified as agricultural land, which includes cultivated land (grains, technical crops, forages, potatoes and vegetables, and fallow), gardens, orchards, vineyards, and permanent meadows and pastures. Winter wheat, spring barley, and corn are the countrys main grain crops. Sunflowers and sugar beets the main technical, or industrial, crops. Agricultural land use has shifted significantly since Ukraine declared independence from the Soviet Union in 1991. Between 1991 and 2000, sown area dropped by about 5 percent, from 32.0 million hectares to 30.4 million, and area decreased for almost every category of crop except for technical crops (specifically sunflowers). Forage-crop area plunged by nearly 40 percent, concurrent with a steep slide in livestock inventories and feed demand.

Wheat is grown throughout the country, but central and south-central Ukraine are the key production zones. About 95 percent of Ukraine wheat is winter wheat, planted in the fall and harvested during July and August of the following year. On the average, approximately 15 percent of fall-planted crops fail to survive the winter. The amount of winterkill varies widely from year to year, from 2 percent in 1990 to a staggering 65 percent in 2003, when a persistent ice crust smothered the crop. Wheat yield declined during the 1990s following the breakup of the Soviet Union and the loss of heavy State subsidies for agriculture. Farms struggled with cash shortages, and the use of fertilizer and plant-protection chemicals plummeted. Due to a combination of favorable weather and a modest but steady improvement in the financial condition of many farms, wheat production has rebounded in recent years (except for the disastrous 2003/04 crop which fell victim to unusually severe winter weather). Ukraine produces chiefly hard red winter wheat (bread wheat), and in a typical year roughly 80 percent of domestic wheat output is considered milling quality, by Ukrainian standards. Feed consumption of wheat dropped sharply during the 1990s, from over 12 million tons to less than 5 million. Meanwhile, food consumption has remained steady at around 10 million tons.

Barley has been the top feed grain in Ukraine for most of the past ten years in terms of consumption, surpassing wheat in the early 1990s. Spring barley accounts for over 90 percent of barley area, and the main production region is eastern Ukraine. Spring barley is typically planted in April and harvested in August, and is the crop most frequently used for spring reseeding of damaged or destroyed winter-grain fields. Area is inversely related, to some degree, to winter wheat area. Winter barley is the least cold-tolerant of the winter grains, and production is limited to the extreme south. The increasing demand for malt from the brewing industry has led to a jump in malting barley production and the import of high-quality planting seed from the Czech Republic, Slovakia, Germany, and France. Consumption of barley for malting purposes has surpassed 300,000 tons, but still accounts for only 5 percent of total barley consumption.

Increased production -- specifically, three bumper harvests since 2001 -- and diminishing domestic demand for feed grains have contributed to a jump in Ukrainian wheat and barley exports. The boom in exports was fueled also by relatively low production costs and the reduction or elimination of price controls and export restrictions in 1994. Most exports go to the Middle East, North Africa, and Europe. (See attach reports: Grain and Feed Annual, April 2004, and How is Ukrainian Grain Competitive?, August 2002.)

Corn is the t