Saturday, 15 May 2010

A great leap…backwards

I spend a lot of time explaining to directors, village leaders, agronomists and just about anyone who will listen that investors looking to invest in Ukraine farming are not looking to rebuild the old state run farms.

The new model has to be a much leaner, fitter and sleeker operation to survive.

I have regular requests to repair the ancient and clapped out infrastructure and I patiently explain that we can not justify repairing knackered sheds, stores, tractors or offices just to make it look like the old days. The new order is capitalism – like it or loath it, it is the system we are operating under and it’s free market rules from now on boys.

I then explain that if we can make commodity farming viable then we can look at other enterprises and added value projects to spread our risks, boost the local economy and provide meaningful employment opportunities for the village. And to be fair most of them get it.

Ukraine’s vice prime minister, one Viktor Slauta doesn’t get it at all.

He wants to merge the country's main crop buyer, which is poorly financed, and a silo operator with a reputation for losing grain to form one single state grain entity. Just like in the old times. Read a fuller account here.

C’mon guys, wake up, it didn’t work then so why should it work now? I might not agree entirely with Friedman economics and the "free market at all costs" approach but it is the system we currently have to manage our business under.

Even my one legged, gold toothed, vodka soaked, incompetent agronomist gets it.