The World Bank estimated the potential of the Ukrainian agricultural sector

Submitted by bashun on Fri, 10/13/2017 - 11:03

Agriculture in Ukraine has an extraordinary potential to become the engine of economic growth and increasing the income of the population.

According to the World Bank study "Land reform: for the sake of growth" writes.

In particular, Ukraine has the largest areas of arable land in Europe - 33 million hectares in comparison with 18 million hectares in France, 12 million hectares in Germany and 11 million hectares in Poland. Ukraine also owns the third world reserves of black soil - extremely fertile land that can yield high yields under favorable conditions. In addition, it has a strategic location for access to agricultural markets in Europe, the Middle East, North Africa and Asia.

"All these factors are favorable for the disclosure of the agricultural potential of Ukraine to accelerate economic growth and improve living standards of the population. At the same time, the productivity of agriculture in Ukraine is much less than in other European countries, " says the World Bank study.

So, the added value per hectare in Ukraine in 2014 was $ 413, while in Poland - $ 1142, Germany - $ 1507, France - $ 2,444. And this despite the much higher quality of soils in Ukraine.

It is noted that agricultural production in Ukraine is not only oriented towards products with a lower added value; even if we consider pure crops, the yield in Ukraine is lower than in other European countries. For example, the wheat yield in Ukraine in 2014 was 4 tonnes / ha, while in Poland - 5 tonnes / ha, France - 7.4 tonnes / ha, Germany - 8.6 tonnes / ha.

"Rental rates for agricultural land are ten times lower than in other European countries, which adversely affects the living standards of a large number of rural landowners and does not contribute to the productive use of land," says the document. 

So, the rent price per hectare of agricultural land in Ukraine is $ 37, and in France - $ 195, Germany - $ 219, Bulgaria - $ 279, the Netherlands - $ 672.

"As a result, a large number of rural landowners are deprived of a fair income from one of their most valuable assets. In fact, about 4.5 million small landowners, often pensioners, now receive 10-20% of their annual income from leasing land at rates that are an order of magnitude lower than the potential income. In addition, extremely low rents do not contribute to the productive use of land, " says the report.

In addition, according to experts of the World Bank, the moratorium on the sale of agricultural land is the main obstacle to attracting investment and increasing productivity in this sector of the economy.


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