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Saturday, 6 October 2012

October 1st Ukraine Brief

Walking and driving around the streets of Kiev enjoying the amazing architecture of this beautiful city between our busy meeting schedule was fantastic. Kiev is a modern clean city with lots of amazing architecture. Unlike many other cities in Europe it was not bombed during the second world war so it has retained many old buildings

Our meetings included;
  1. The Ukraine Agribusiness club; They are a lobby organization with large Agriholding, and Agri industry companies as members.
  2. Bridges; Originally set up by the US government to sponsor Medium sized Ukrainian farmers to travel to the US to study Agriculture. They are now a private company, commercially taking Ukranian farmers on commodity based study trips around the world
  3. Gavillon; A Multinational grain trading company, which has recently set up to accumulate grain in the Ukraine

Some key learning points that I took from the day were.

  1. Ukraine has huge potential to increase production
  2. The key things holding the country back from increasing Agricultural production are;
    1. A relatively small amount of  investment into agriculture by both government & private sectors
    2. Corruption at all levels of government and industry makes doing business very challenging
    3. Infrastruce is aged and struggling to keep up
    4. There is no working land market, all land is still owned by many small individual farmers. This means that to achieve scale you need to lease from many small farmers  of 1 to 5 ha in size, creating enormous administrative challenges.
  3. Corn Production and area is increasing rapidly at the expence of Wheat and Barley
  4. Infrastructure, though currently somewhat of an impediment, is better than I expected and is rapidly improving
  5. Labour is very cheap. 
  6. The Dinepro river a huge river that runs right up the centre of Ukraine is fast being developed to efficiently transport grain to the black sea, similar to the Mississippi in the USA.
  7. There is very little beef production in the Ukraine 

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