Tuesday, 18 November 2014

Agri-business news from Ukraine and Russia

USAID has presented a new eight-year programme to support agricultural development in Lviv, Kherson and Kharkiv oblasts with a budget of up to $6 million.  

It would be interesting to find out the rationale behind the choice of those three oblasts because it certainly looks politically motivated rather than technical.

An article by GRAIN (a non-profit organisation that works to support small scale farmers) pointed out that in Ukraine, small farmers operate on 16% of agricultural land, but provide 55% of agricultural output, including: 97% of potatoes, 97% of honey, 88% of vegetables, 83% of fruits and berries and 80% of milk.  

The article goes on to highlight the predicament of small farmers faced with an increasing mobilization of funds to support large scale agri-business at the detriment of the local population.  

A valid point and not one I would necessarily argue against but the question I have is who will fund agricultural development and food production if investment doesn't come from private finance?

Russian wheat prices rose slightly supported by the falling rouble and limited crops sales by farmers as they hold onto grains and sell sunflower seeds.

Moscow Times report that a shortage of available finance for farmers may affect the state's plans to quickly replace food imports with domestic production.

Agriculture Minister Nikolay Fyodorov reports that Russia no longer experiences pork shortages that emerged after the country imposed an embargo on imports.  It was eliminated by opening new markets and new countries and giving them permissions to import to Russia.  Does that sound credible given the time scale?

North Korea wants to rent 10,000 hectares in Russia's far-eastern Khabarovsk region and will farm it using its own workers and machinery to produce grain and vegetables.  Khabarovsk Agriculture Ministry has been quoted as saying the region is receptive to collaboration particularly in the construction of greenhouses and livestock farms.  So not a done deal yet.

The dispute over the CAP budget continues to gather momentum as twenty farm minister voiced their objection to the previous commission’s decision to activate the agricultural crisis reserve for next year to finance measures in response to the Russian food import ban.  

It seems they have already spent €344m of €433m put aside for 2015 and want to hang on to what’s left for next year’s unforeseen problems.