Harvest time is close to its finish in Ukraine. There is only one million hectares left to be thrashed, Prime Minister of Ukraine Mykola Azarov announced on August 6 during his visit to Pyrohiv village near Kyiv. The prime minister noted that Ukrainian farmers had successfully thrashed 31 million tons of grain which had been harvested from 10.3 million hectares of cropland constituting 91 percent of planned acreage (according to the Ministry of Agricultural Policy and Food). The largest harvest was thrashed in Odesa region (2.6 million tons), Mykolaiv, Kharkiv and Kherson regions harvested 2.2 million tons each, while Zaporizhia, Dnipropetrovsk and Vinnytsia regions reported harvest of 2 million each. Farming enterprises already harvested 21.2 million tons of wheat, 8.9 million tons of barley, and 0.5 million tons of rye. In addition, rape crop this year is 1.3 million tons, the Ministry of Agricultural Policy and Food reports. The average yield is 30.2 metric centners per hectare, which is almost 22 percent higher than in 2010. The ministry reports that at the beginning of August, 2010, Ukrainian farmers had the average yield as low as 24.7 metric centners per hectare.
The government is confident that “if only we had fine weather during these remaining few days,” one would be able to congratulate Ukrainian farmers with an excellent harvest, which would be “enough for this year and the next one, too.” The ministry’s experts are hoping that this year’s crop will be 8 million tons bigger than in 2010, which will amount to more than 47 million tons. “Given these figures, we [Ukraine. –Ed.] will take leading positions on a number of export markets as soon as this year. In particular, Ukraine is now world’s number one exporter of sunflower oil, with 60 percent share in the world exports. It will be the leader in the barley export trade, too, and the second or third largest exporter of corn in the world,” Mykola Prysiazhniuk, Minister of Agriculture and Food, said during his working visit to Kherson.
The officials’ bright forecasts are supported by the agricultural sector exports, too. They say that Ukraine has managed to get a really good harvest this year. Both wheat and rye have thrived. Sunflower seed and corn crops are also very promising. However, director of the Ukrainian Agrarian Business Club Association Volodymyr LAPA told The Day that the Ukrainians were unlikely to receive full benefits of this year’s good harvest. “The greater the yield, the worse it is for the producer,” the expert says. He explains that as the grain production increases, the government starts to interfere in “rural affairs”: it introduces restrictions, quotas, price regulation and so on. “The ‘manual mode’ of harvest distribution is still very much prevalent in Ukraine,” Lapa explains to The Day. “Thrashed grain is collected from farmers at procurement bureaus, as the formers are unable to decide on their own, in principle, how to dispose of their crop. So, they sell it at a very low price, sometimes even below its cost.” Nevertheless, the expert stresses that the export sales are the most profitable. But in Ukraine export profits do not go, for the most part, to the farmer who has grown grain or to the government. These profits mostly go to brokers and grain traders.
According to Lapa, the introduction of export duties on grain was a right step for the Ukrainian government, as it allows the government to not only regulate the market, but also increase its revenues. However, the expert notes that this mechanism is quite “immature,” imperfect and requires much improvement, especially regarding the use of collected funds.
Let us recall that with the start of the new marketing year (July 1, 2011) the government has decided to abandon the quota mechanism, introducing the export duties on grain instead. The government believes that the mechanism of duty payment is more transparent, which should cause no criticism from market participants. However, farmers note that grain traders still shift duty costs onto grain producers.
