Ukraine could be the 'European California' if it fixed the problems hampering its agricultural development, such as lack of proper irrigation, claimed panellists in a discussion at the Black Sea Economic Forum in Yalta in late October.
“Ukraine is the key” to solving the world’s looming food shortages, said Bate C Toms, chairman of the British Ukrainian Chamber of Commerce. “Forty percent of the world’s black earth is in Ukraine, but millions of hectares lie fallow or underutilised because of lack of water.”
The Crimea region, in particular, he said, “could have all the water it needs if it were irrigated properly. California is running out of water. But Crimea does not need to worry about this; it is just a question of infrastructure.”
Irrigation infrastructure does exist in Crimea, but as in other parts of Ukraine much of it needs updating. “There is a Soviet system of canals already in Crimea, which is a benefit. If we had to start from the beginning it would cost billions,” said Elena Voloshina, the International Finance Corporation’s country officer for Ukraine. ”We just need to upgrade what is there – and we need better government policies for managing it.”
Pavel Burlakov, first deputy prime minister of Crimea, added: “Investment can come not just in production but also in processing [of agricultural goods]. Our processing facilities are out of date so there is huge investment potential in developing new processing technologies.”
A potential leader
Sergey Mazin, CEO of Ukrainian agricultural company KSG Agro, said that in his company’s experience the limitation for development of agriculture in Crimea is infrastructure. “Luckily the pipes are in place but pump facilities and pipe conditions vary. There is scope for public-private partnerships to improve the pipes and pump stations. But investors should be mindful of the limitations of Ukraine’s infrastructure which prevents the high provision of crops.” He added that the country also needs better port facilities and a clearer tax system to be able to export agricultural good internationally.
Despite the difficulties, Mr Mazin said: “We believe Ukraine as a whole and Crimea in particular will take its place as a leader in world agriculture.”
There is a clear and immediate opportunity for providers of irrigation systems and equipment. “We look at Ukraine and see nothing but huge, huge potential,” said Aaron Schapper, vice-president and general manager of international irrigation for Nebraska-based Valley, a maker of irrigation equipment. “The secret to having a successful agriculture sector is water: water at the right place, at the right time, and when you need it. The countries that get this right are those that can succeed in agriculture.”
Due to the infrastructure constraints, it is too early to implement large-scale agriculture projects in Crimea, Ms Voloshina said, but smaller projects may already be viable.