Tuesday, 13 August 2013

The problem with Ukraine is...

Ukraine has land, lots of it; 32 million hectares of large flat arable fields.

Ukraine has a great climate; an intense growing season that turns the country from drab winter greys to a vibrant green jungle inside of a week and allows all the major commodities to flourish.

Ukraine has soil; deep, fertile, easily worked stuff, even the Nazis, not best known for their agronomy skills, recognised the potential, shovelled it in to wagons and carted it back to Berlin.

Ukraine is perfectly located to market; 400m next door in soon to be annexed Europe, 140m in the former colony Russia and a further 500m hungry souls just though the Bosporus in the Mediterranean and North African countries.

So why does Ukraine's agricultural productivity not reach the much hyped potential?

I could write a thesis on the subject but today I am going to pick specifically on contractors.

There aren't any.  At least not any that behave like contractors.  There are farmers and chancers that portray themselves as contractors but in reality no contractors.

Take one contractor I use for example - I'll call him Sergey.

Sergey has no problem turning up late; not turning up at all; turning up with discs that have discs missing leaving an uncultivated strip running down the middle and doesn't see why this is a problem; cultivating too shallow so he can speed through the hectares; stealing diesel; stealing fertiliser; overcharging; making up invoices; charging twice for the same job; all in all just being an out and out dick.

Before you ask why use him, the others are the same but turn up drunk.

There is a huge opportunity for young budding entrepreneurs to establish a contracting business here in Ukraine, providing a normal standard and normal quality of service to established large farming entities.

Many, me included are looking to fund capex and outsourcing machinery services in partnership with a proper contractor is a very real option.

To my mind initiatives like this will lead to increased productivity and improved profitability and the likes of Sergey will go the way of the dinosaurs.

Forced to eat his own defecate as he runs out of food.