Agricultural Sector's Bountiful Harvest: A Boon for Ukraine
Ukraine’s rich, black soil is one of the country's greatest resources. It is
becoming increasingly important to the rest of the world. The vast fields of
wheat, barley, rye, oats, sunflower, rapeseeds and other grain and oil crops
have long made Ukraine a “breadbasket.”
Of Ukraine's total land area of 60 million hectares, roughly 42
million is classified as agricultural land, which includes cultivated land
(grains, technical crops, forages, potatoes and vegetables, and fallow),
gardens, orchards, vineyards, and permanent meadows and pastures. Winter
wheat, spring barley, and corn are the country's main grain crops. Sunflowers
and sugar beets the main technical, or industrial, crops. Agricultural land use has shifted significantly since
Ukraine declared independence from the Soviet Union in 1991. Between 1991 and
2000, sown area dropped by about 5 percent, from 32.0 million hectares to 30.4
million, and area decreased for almost every category of crop except for
technical crops (specifically sunflowers). Forage-crop area plunged by nearly
40 percent, concurrent with a steep slide in livestock inventories and feed
demand.
Barley has been the top feed grain in
Ukraine for most of the past ten years in terms of consumption, surpassing wheat in the early 1990's. Spring
barley accounts for over 90 percent of barley area, and the main production
region is eastern Ukraine. Spring barley is typically planted in April and
harvested in August, and is the crop most frequently used for spring reseeding
of damaged or destroyed winter-grain fields. Area
is inversely related, to some degree, to winter wheat area. Winter
barley is the least cold-tolerant of the winter grains, and production is
limited to the extreme south. The increasing demand for malt from the brewing
industry has led to a jump in malting barley production and the import of
high-quality planting seed from the Czech Republic, Slovakia, Germany, and
France. Consumption of barley for malting purposes has surpassed 300,000 tons,
but still accounts for only 5 percent of total barley consumption.
Sugar beets are grown primarily in central
and western Ukraine. Beets are planted in late April and early May and
harvested from mid-September through the end of October. Production has been on
the decline since the early 1990's due chiefly to low profitability compared to
grains and sunflowerseed. Between 1994 and 2003, planted area declined by 50
percent to less than 0.8 million hectares, and production from 28.1 to 13.4
million tons. Large farms are sometimes encouraged
by the local administrators to plant sugar beets not so much to make money but
rather to provide a social safety net or to supplement to pensioners or farm
workers. A family may be responsible for weeding a specific section of a field
and the workers in turn receive 20 percent of the sugar processed from the beets
harvested from its section. Sugar also frequently serves as part of farm
workers’ salaries.
Ukraine: Agricultural Overview
Ukraine agriculture has been evolving since it achieved
independence in 1991, following the breakup of the Soviet Union. State and
collective farms were officially dismantled in 2000. Farm property was divided
among the farm workers in the form of land shares and most new shareholders
leased their land back to newly-formed private agricultural associations. The
sudden loss of State agricultural subsidies had an enormous effect on every
aspect of Ukrainian agriculture. The contraction in livestock inventories that
had begun in the late 1980's continued and intensified. Fertilizer use fell by
85 percent over a ten-year period, and grain production by 50 percent. Farms
were forced to cope with fleets of aging, inefficient machinery because no funds
were available for capital investment. At the same time, however, the emergence
from the Soviet-style command economy enabled farmers to make increasingly
market-based decisions regarding crop selection and management, which
contributed to increased efficiency in both the livestock and crop-production
sectors. Difficulty in obtaining credit, especially large, long-term loans,
remains a significant problem for many farms.
Agricultural Land Area and Major Crops
The climate of Ukraine is roughly similar to that of Kansas:
slightly drier and cooler during the summer and colder and wetter during the
winter, but close enough for comparison. The weather is suitable for both
winter and spring crops. Average annual precipitation in Ukraine is
approximately 600 millimeters (24 inches), including roughly 350 millimeters
during the growing season (April through October). Amounts are typically higher
in western and central Ukraine and lower in the south and east.
Of Ukraine's total land area of 60 million hectares, roughly 42
million is classified as agricultural land, which includes cultivated land
(grains, technical crops, forages, potatoes and vegetables, and fallow),
gardens, orchards, vineyards, and permanent meadows and pastures. Winter
wheat, spring barley, and corn are the country's main grain crops. Sunflowers
and sugar beets the main technical, or industrial, crops. Agricultural land use has shifted significantly since
Ukraine declared independence from the Soviet Union in 1991. Between 1991 and
2000, sown area dropped by about 5 percent, from 32.0 million hectares to 30.4
million, and area decreased for almost every category of crop except for
technical crops (specifically sunflowers). Forage-crop area plunged by nearly
40 percent, concurrent with a steep slide in livestock inventories and feed
demand.
Wheat is grown throughout the country,
but central
and south-central Ukraine are the key production zones. About 95 percent of
Ukraine wheat is winter wheat, planted in the fall and harvested during July and
August of the following year. On the average, approximately 15 percent of
fall-planted crops fail to survive the winter. The amount of winterkill varies widely from year to year, from 2 percent
in 1990 to a staggering 65 percent in 2003, when a persistent ice crust
smothered the crop. Wheat yield declined during the 1990's following the breakup
of the Soviet Union and the loss of heavy State subsidies for agriculture.
Farms struggled with cash shortages, and the use of fertilizer and
plant-protection chemicals plummeted. Due to a combination of favorable weather
and a modest but steady improvement in the financial condition of many farms,
wheat production has rebounded in recent years (except for the disastrous
2003/04 crop which fell victim to unusually severe winter weather). Ukraine
produces chiefly hard red winter wheat (bread wheat), and in a typical year
roughly 80 percent of domestic wheat output is considered milling quality, by
Ukrainian standards. Feed consumption of wheat
dropped sharply during the 1990's, from over 12 million tons to less than 5
million. Meanwhile, food consumption has remained steady at around 10 million
tons.
Barley has been the top feed grain in
Ukraine for most of the past ten years in terms of consumption, surpassing wheat in the early 1990's. Spring
barley accounts for over 90 percent of barley area, and the main production
region is eastern Ukraine. Spring barley is typically planted in April and
harvested in August, and is the crop most frequently used for spring reseeding
of damaged or destroyed winter-grain fields. Area
is inversely related, to some degree, to winter wheat area. Winter
barley is the least cold-tolerant of the winter grains, and production is
limited to the extreme south. The increasing demand for malt from the brewing
industry has led to a jump in malting barley production and the import of
high-quality planting seed from the Czech Republic, Slovakia, Germany, and
France. Consumption of barley for malting purposes has surpassed 300,000 tons,
but still accounts for only 5 percent of total barley consumption.
Increased production -- specifically, three bumper harvests since
2001 -- and diminishing domestic demand for feed grains have contributed to a
jump in Ukrainian wheat and barley
exports. The boom in exports was fueled also by relatively low production
costs and the reduction or elimination of price controls and export restrictions
in 1994. Most exports go to the Middle East, North Africa, and Europe. (See
attaché reports: Grain and Feed
Annual, April 2004, and How is Ukrainian
Grain Competitive?, August 2002.)
Corn is the third important feed grain
in Ukraine. Planted area has increased despite several impediments: obsolete
and inadequate harvesting equipment, high cost of production (specifically
post-harvest drying expenses), and pilferage. The main production
region is eastern and southern Ukraine, although precipitation amounts in
some oblasts in the extreme south are too low to support corn production. Corn
is typically planted in late April or early May. Harvest begins in late
September and is usually nearing completion by early November. Only 25 to 50
percent of total corn area is harvested for grain; the rest is cut for silage,
usually in August. (The USDA corn estimates refer to corn for grain
only.) Corn is used chiefly for poultry and swine feed, and production and consumption have risen since 2000 concurrent with a
rebound in poultry inventories. Russia and Belarus are the chief destinations
for Ukrainian corn exports.
Sunflowerseed is Ukraine's chief
oilseed crop. Production is concentrated in the southern
and eastern oblasts. Sunflowers are typically planted in April and
harvested from mid-September to mid-October. Because of a combination of high
price, relatively low cost of production, and traditionally high demand,
sunflowerseed has become one of the most consistently profitable crops. (See Sunflowerseed
Production in Russia and Ukraine, June 2004.)
Its high profitability fueled a significant expansion in planted
area beginning in the late 1990's. Many
farmers in Ukraine abandoned the traditional crop-rotation practices recommended
by agricultural officials which called for planting sunflowers no more than once
every seven years in the same field. The aim of the 1-in-7 rotation is to
prevent soil-borne fungal diseases and reduce the depletion of soil moisture and
fertility. (Because of their deep
rooting system, sunflowers reportedly extract higher amounts of water and
nutrients from the soil than do other crops in the rotation.)
Sugar beets are grown primarily in central
and western Ukraine. Beets are planted in late April and early May and
harvested from mid-September through the end of October. Production has been on
the decline since the early 1990's due chiefly to low profitability compared to
grains and sunflowerseed. Between 1994 and 2003, planted area declined by 50
percent to less than 0.8 million hectares, and production from 28.1 to 13.4
million tons. Large farms are sometimes encouraged
by the local administrators to plant sugar beets not so much to make money but
rather to provide a social safety net or to supplement to pensioners or farm
workers. A family may be responsible for weeding a specific section of a field
and the workers in turn receive 20 percent of the sugar processed from the beets
harvested from its section. Sugar also frequently serves as part of farm
workers’ salaries.
On private household plots, meanwhile, sugar beet area has
increased. Sugar beet production requires a significant amount of hand labor
and remains a viable option for small household farms with limited access to
agricultural machinery. Household plots now account for approximately 25
percent of Ukrainian sugar beet output compared to only 3 percent in 1995. (See
attache report: Sugar Annual,
April 2004.)
