Although government data throws positive light on this year's harvests, experts say that after years of decline, it is doubtful that Ukraine's agricultural sector is looking at an upswing
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Serhy Feofilov, director of UkrAgroConsult, said he is skeptical Ukraine’s agriculture will bounce back this year after years of decline as suggested by the government’s data.
He was responding to a report from Deputy Prime Minister Mykola Hlady, who said Nov. 10 that Ukraine’s agricultural production in the first 10 months of this year was up 2.1 percent. The announcement indicated the sector was heading for its first growth since independence in 1991.
Feofilov said the government’s optimistic report may have stemmed from the criteria employed in measuring output.
Hlady said the country’s yield from grain and vegetable cultivation was 7 percent higher this year, while cattle breeding was down by 5.4 percent.
Feofilov said it was likely the government’s figures did not reflect an actual growth in agricultural production but an increase in prices of agricultural commodities.
“If 100 tons of grain cost Hr 20,000 last year, for instance, and it now costs Hr 60,000, then you may have growth in agricultural production measured in prices,” he said.
He said prices on many agricultural commodities grew this year amid shortages and lower crops.
Feofilov said he was also surprised to see the grain yield rise in the government’s data because officials had been predicting a lower grain crop this year.
Officials at the Agriculture Ministry were unavailable for comment as no one answered the phone at the office.
According to UkrAgroConsult’s forecasts, Ukraine will harvest some 22.5 million tons of grain this year, down from 24.5 million tons last year.
Ukraine’s agriculture has declined steadily since 1991 due to governmental interference, lack of inputs and obsolete equipment.
Earlier this year the government launched a program to privatize kolkhozy, or collective farms. Since then, many farms have increased efficiency, but most remain loss-making and use archaic methods, despite being officially privatized.
According to Dragon Capital, an investment banking firm, private farms reported 4.6 percent growth in the first half of this year, while the output of state-owned farms dropped by 19.4 percent.
The state farms are dragging the sector’s overall performance down as they still tend to be larger and more numerous than private farmers.
Leah Soroka, an agricultural project manager at International Finance Corp., said it was unclear whether the government’s reform efforts have actually made the sector more efficient this year.
“There are a lot of issues here,” Soroka said. “But I’m not sure if statistically one can make any direct correlations.”
