Ukraine Seeks to Establish Itself as the Granary of Europe

By CnAgri Print

With its rich black earth and bountiful supplies of grain, Ukraine was once known as the "breadbasket of Europe," reads the article by Roman Olearchyk in the Financial Times. After 20 years of being independent Ukraine yet again aims at becoming number one in global barley, corn, wheat and sunflower oil export.

Ukraine, which historically has been one of the largest producers of agricultural products among the countries of the former Soviet Union, has gone through some difficult times in the 90s. Ukrainian agricultural GDP declined by more than 50 percent between 1991 and 1999, reported OECD. It took the country about 10 years to increase its grain harvesting to more than 55 million tons in 2011 compared to less than 25 million tons in 1996, 1999 and 2000.

There is still a huge potential for Ukraine to become one of the leading players in global food production. The plan is to increase grain production to 80 - 100 million tons a year, and vegetables - to 30 - 40 million tons a year and a lot of it will depend on investments, said Prime Minister of Ukraine Mykola Azarov on July 26. According to the European Bank for Reconstruction and Development Ukraine could increase its oilseeds and grain production by 100 percent over the next decade, reads the article in FT.

Evidently, the climate, geographical location, rail network, and labor cost create favorable conditions for agriculture in Ukraine. "It's agriculture the only economic sector that showed positive gains during and after the global financial crisis that hit in late 2008," said Ukrainian expert Bohdan Chomiak in his September interview with FT. He also noted that, currently, the sector had been working on 40 percent capacity.

Ukraine claims its position as one of the leading agricultural countries in the world. The country with an area of 60 million hectares (148 million acres) has about 42 million hectares (103 million acres) of agricultural land, including 33 million hectares (over 81 million acres) of the arable land. Almost half of the arable land in Ukraine is black soil - the most favorable soil for agriculture. Presently, Ukraine ranks number one in global barley exports. In 2011, Ukraine became world's largest sunflower exporter, according to Erste Bank.