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UKRAINIAN AGRIBUSINESS CLUB Agriholdings in Ukraine Dr. Alex Lissitsa President

UKRAINIAN AGRIBUSINESS CLUB Agriholdings in Ukraine Dr. Alex Lissitsa President . Croplands of the Earth. Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua. World’s richest black soils.

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UKRAINIAN AGRIBUSINESS CLUB Agriholdings in Ukraine Dr. Alex Lissitsa President

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  1. UKRAINIAN AGRIBUSINESS CLUBAgriholdings in UkraineDr. Alex LissitsaPresident

  2. Croplands of the Earth Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua

  3. World’s richest black soils • With one-third of the world’s richest black soils, Ukraine occupies a leading place in the world in terms of its proportion of high-quality fertile soils • Black soils in eastern Ukraine contain valuable humus layer of approximately 60 cm which aids in the retention of soil nutrients and moisture and results in the highest productivity of any known soils worldwide • 60 • Average depth of humus layer, cm • 30 • EU • Ukraine Source: Eurostat, Ukrstat Superior chernozems Higher than average chernozems Average chernozems Lower than average chernozems Derno-podzolic sandy soils Soddy soils Forest and mountain soils Chestnut soils Regradatedchernozems Meadow soils Peat-boggy soils and turf peats Chernozems Source: USDA Source: Cartography USSR

  4. Soil Performance andSoil Resistance Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua

  5. Natural conditions. Precipitations Precipitation disproportionately distributed, highest in west and north, lesser in east and southeast

  6. Natural conditions. Temperature Temperatures are continental. Mediterranean only on the southern Crimean coast. Winters vary from cool along the Black Sea to cold farther inland, summers are warm across the greater part of the country, hot in the south

  7. Ukraine is one of the few regions worldwide with the best conditions for agricultural production!

  8. AgriculturalProduction in Ukraine

  9. Agricultural Production in Ukraine Source: State Statistics Committee and own calculations Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua

  10. Grain Production in Ukraine, 1980-2011 * Forecast Source: State Statistics Committee and own calculations Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua

  11. Oilseeds Production in Ukraine, 1990-2010 in mln t. Source: State Statistics Committee and own calculations Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua

  12. Milk and Meat Production in Ukraine Source: State Statistics Committee and own calculations; * forecast Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua

  13. Pork Meat: Production, Trade and Consumption Report of UCAB, 2011

  14. Exports position of Ukraine, m. t. USDA data

  15. Foreign Trade and Investments Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua Source: State Statistic Committee

  16. Export Local Local Consumption Ukrainian Agriculture 1991-2004

  17. Export Export Local Local Local Consumption Consumption Ukrainian Agribusiness 2005-2011

  18. PRICES MARKET RESTRICTIONS POVERTY Market Restrictions, Prices, and Poverty

  19. Nowadays agribusiness reaction on such policy instruments is …

  20. Structural and Technological Change in Ukrainian Agriculture Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua

  21. Agricultural Sector Developments in Ukraine Year 2007: 25 agriholdingscontrolover 2,5-3,0mln. ha of farmland In addition 75-80 “smaller” agricultural producersoperate 1,5-2,0mln. ha of farmland Year 2008: About 40agriholdingscultivatemore than4,0-4,5mln. ha of farmland The next 90-100 agricultural enterprises operate2,2-2,5mln. ha of farmland End 2011: About 100agriholdingscultivatemore than13mln. ha of farmland(ca. 50% of total farmland) The next 200-300 agricultural enterprisesoperate3,5-4,0mln. ha of farmland

  22. Corporate model Family Farming Combines Ownership, Management, and Most Labor Family farming

  23. Small vs. Large

  24. Traditional Agribusiness in the EU

  25. Agribusiness in Ukraine andRussia

  26. Agribusiness in Ukraine and Russia Agricultural Policy Social Responsibility

  27. Public Ukrainian Agriholdings

  28. Agriholdings in Ukraine

  29. Top livestock operators produce: • 84,7% of poultry (10 companies) • 38,8% of pork (20 companies) • 12,7% of cattle (30 companies) • 22,8% of row milk (30 companies) Source: UCAB experts’ estimates, in comparison to gross production by legal entities, 2011

  30. Crop Production in 2010 Source: UCAB experts’ estimates, in comparison to gross production by legal entities

  31. Efficiency andProductivity in Ukraine

  32. Agribechmark-ResultsforRapeseed 2010 Quelle: Agribenchmarkreport 2010

  33. Agribechmark-ResultsforRapeseed 2010 Quelle: Agribenchmarkreport 2010

  34. Agribechmark-ResultsforRapeseed 2010 Quelle: Agribenchmarkreport 2010

  35. Land Relations in Ukraine Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua

  36. Farmland Market in Ukraine • Land market is banned by Moratorium which is being prolonged each year • Land market implementation needs one law “On land market” to be passed. “Land cadastre” law has been already passed. • All agricultural producers with exception of small farms up to 100 ha lease land from private persons for 5 to 49 years • Current maximum land-plot-size owned by one person limited at 100 ha • Ukrainian PresidentYanukuvychannocedliftingoflandmoratouriumbyJanuary 2012.

  37. Land Law (1st reading in parliament on 15 Nov.2011) • Ukrainian citizens, farmers and state are eligible to buy farmland • The maximal amount of land per person/farm is limited by 2100 ha • Previous land lease contracts will be working also in the future • Realistic time forstartofselling/buyingag. land will beJanuary 1, 2013

  38. Something likeSummary Ukrainian agricultural sector has shown in last 3-5 years very stable development due to the increased investments in cash crops, chicken and pork production Investments in industrialized dairy production in 2012-2015 are expected No alternative to industrialized agriculture Agriholdings dominate and will dominate in Ukrainian agribusiness in next decade Association “Ukrainian Agribusiness Club” www.agribusiness.kiev.ua

  39. Ukrainian Agriholdings 2012-2013

  40. A Successful Ukrainian Agriholding will do Optimization of Business-Processes: Strategic Management, Controlling, Project Management etc. Hedging Risks (at least price and production) Technology improvements and innovations adjustment Constant communications with investors, government, rural people, mass-media etc. Productivity and efficiency increasing

  41. But also…. Agriholdings will more cooperate with each other in terms of agricultural policy improvements Developing of human resources strategy (private agribusiness schools) Common strategies for access of foreign markets (EU, Russia, etc)

  42. Association Ukrainian Agribusiness Club www.agribusiness.kiev.ua

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