Ukraine is being urged to realize its agricultural potential – and not to leave behind the human development of rural areas in the process
A sensational harvest has stimulated discussion of agricultural policy. By the end of August, 43 million tonnes of grain had been harvested, 40% more than in drought-hit 2007. Up to 20 million tonnes could be exported, bringing in $5 billion, Troika Dialog analysts believe.
Asad Alam, World Bank sector manager for Europe and central Asia, says that higher food prices are here to stay and that Ukraine, given its soil quality, climate and geographical position, is well placed to take advantage. “High food prices present all sorts of challenges, but they also provide a tremendous opportunity for agriculture”, Alam says. “There have been no fundamental reforms in the agricultural sector in the years of transition.”
The World Bank says that developing private-sector investment is the key to raising agricultural productivity. Government should focus on transport and storage infrastructure, together with creating a legal framework for the land market, it argued in a document presented to the government in May.
Roman Shmidt, Ukraine’s deputy state secretary for agriculture, warned a recent World Bank video conference on agriculture in the former Soviet Union that policy also had to deal with human development issues in the countryside. There are 9 million Ukrainians in rural businesses and on family farms, but many young people are “abandoning their homes and going into towns”. A targeted government support programme had not yet reversed the trend.
Shmidt urged the World Bank to help efforts to provide mortgage-backed loans for people to buy agricultural land.—S.P.