Ukraine can feed the world
Ukraine is undergoing a historic transformation that will be felt around the world. The globally significant progress I am referring to is land reform.
For centuries Ukraine has been known as “the breadbasket of Europe”. This title is absolutely correct, given that Ukraine is home to about a quarter of the world’s super fertile “chernozem” or “black soil”.
However, Ukrainians have failed to fully capitalize on this agricultural wealth in the thirty years since the country’s independence. Instead, independent Ukraine has become one of the six nations in the world without an agricultural land market, joining North Korea and Venezuela. Fortunately, the situation is changing and Ukraine is preparing to take its rightful place as an agricultural superpower.
The untapped potential of Ukraine’s agricultural sector is staggering. The country has about 42 million hectares of agricultural land. Currently, 32 million hectares are cultivated each year, which is an area larger than Italy. Considering the size and fertility of the country’s agricultural land, as well as the vast possibilities for increased harvests and greater efficiency through ongoing modernization, it is no exaggeration to say that the ‘Ukraine can feed the world.
Ukraine is already among the top three grain exporters and a world leader in areas such as soybeans and sunflower oil. Ukrainian agricultural exports enjoy a growing profile in major world markets such as China, Egypt, India, Turkey and throughout the European Union.
The countries of the Middle East represent a particularly promising pole for Ukrainian agricultural exporters. This was evident during President Zelenskyy’s February 2021 visit to the United Arab Emirates, where agricultural trade featured prominently in a series of signed memoranda and agreements worth around $ 3 billion. Looking ahead, Ukraine aims to ensure food security for the UAE as well as a number of other countries in the region, including Saudi Arabia and Qatar.
Ukraine has also shown great promise in some of the world’s fastest growing agricultural niche markets. Today Ukraine is among the top three exporters of organic products to the EU. We plan to achieve similar penetration of the organic market in the United States and throughout Asia. Organic products can be one of the engines for the future development of the Ukrainian agricultural sector.
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These ambitious goals are quite realistic, but they require a sensible and modern approach to the development of the Ukrainian agricultural industry. Since its independence in 1991, Ukraine has never established a functioning agricultural land market. Instead, an official moratorium on the sale of farmland was put in place in 2001, when I was only thirteen.
I grew up in a farming family in rural Ukraine where life revolved around farming. My parents and all the other members of the community who rented land quickly came to the conclusion that the moratorium was a way to steal land. However, there was no legal mechanism at our disposal that could protect us from the arbitrariness of corrupt officials.
When I became head of the state agency responsible for the use of land resources, I carried out an inventory of state lands. At least five million hectares had simply disappeared since the start of the moratorium. Unscrupulous officials turned over the land to developers in exchange for illegal payments. This is how the shadow land market of the past decades has impoverished Ukrainians while generating obscene wealth for a small group of corrupt officials and their associates.
Many actors in the agricultural sector have fought for years to end the moratorium. In March 2020, the Ukrainian parliament finally voted for land reform and overturned the moratorium. Thanks to this historic decision, seven million Ukrainian landowners were granted the right to use their land as they pleased.
This breakthrough is just the start. Due to public fears and concerns fueled by those who benefited the most from the moratorium, the spring 2020 reform bill was very conservative. Over time, as people begin to see the benefits of a functioning agricultural land market and develop a sense of confidence in new market rules and regulations, other changes will be introduced. Eventually, Ukrainians will be invited to participate in a national referendum on the issue of allowing foreign citizens to buy agricultural land.
Safeguards will remain in place to ensure that reforms benefit ordinary Ukrainians rather than the country’s billionaire class. These measures include limits on the amount of land an individual can buy.
Along with the emergence of an agricultural land market, we are also developing instruments to provide affordable finance to Ukrainian agro-industries. In cooperation with the National Bank of Ukraine, farmers will be able to access loans at competitive rates to finance the modernization of machinery as well as the purchase of quality seeds and fertilizers. The Ukrainian parliament is currently working on a partial guarantee fund for agricultural loans, which will provide assistance to small and medium-sized farms.
At every stage of the land reform implementation we are guided by what we call the 3D formula: deregulation, shadow removal and digitization. We aim to collect information on all natural resources in the country, including agricultural land, by satellite. This will be made available online as part of our commitment to transparency and digitization.
The recently adopted legislation governing concessions and public-private partnerships will help modernize Ukraine’s infrastructure and strengthen the country’s capacity to transport greater volumes of crops and value-added agricultural products to global markets. At the same time, the river traffic reforms adopted at the end of 2020 will allow the Ukrainian Dnipro River to regain its historic role as one of the major waterways in Europe and to become an increasingly important route for agricultural exports. .
Land reform last year was a turning point in modern Ukrainian history, but experience elsewhere in the region indicates that market development will continue for many years to come. In neighboring Poland, for example, land reform has been underway for 15 years. The process will evolve in the same way in Ukraine, given the changing social and economic situation in the country.
At every step of this process, we will ensure that Ukrainians are protected from the greed of tycoons and corrupt officials. The government will never lose sight of the central idea that Ukrainian farmland is the nation’s greatest asset. In the years to come, this will leave Ukraine in a good position to assume an increasingly important role in global food security. Ukrainians will finally reap the fruits of the country’s legendary fertility, and the whole world will know Ukraine as a land of unparalleled agricultural wealth.
Roman Leshchenko is the Ukrainian Minister for Agrarian Policy.
Fri 5 Feb 2021
On February 2, President Zelenskyy shut down three Kremlin-linked TV channels, a move touted as a blow to Russia’s hybrid war against Ukraine. This step sparked a debate on the balance between national security and freedom of expression.
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