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24 July 2017

Taras Vysotskyi

I would like to start a discussion that has been brewing in Ukraine for several years and in recent times, with development of society and agricultural sector, is becoming clearly expressed.

Every year in late March in Brussels FFA 2017 is held where industry leaders, scientists, ministers, representatives of non-governmental organizations dispute about the future of agriculture trying to balance two main challenges - food and environmental safety.

This year the main theme at the jubilee FFA 2017 was achieving of balance between the needs of agricultural business and requirements of society. In the developed countries such compromise is being actively quested for. In Europe, the debates are conducted regarding how to encourage private business to share profits, how to determine the optimal payment distribution for sustainable development. It is important to realize that sustainable development, including economic development as well, is not only the ecology but also the environment and social life.

With regard to any provocative accusations like ‘we are destroying the planet’ it can be answered that from the economic point of view, the other benefits are gained. It is impossible to deal only with the environment issue, since then the food will be expensive and inaccessible, and people will die of hunger. It is important to conduct a constructive dialogue between all parties in order to avoid radicalism and one-minded populism, we must strive for balance of all the interests. It is essential to prevent any party from running to extremes: environmental, social or economic. Ukraine is currently not able to cope with such task. There are elements of lobbying, indifference, misunderstanding of some aspects, and, therefore, it is necessary to work hard so that all components will be balanced.

We have all the prerequisites in order to start the dialogue. Domestic private business has changed. Capital accumulation period is over. Now the companies should integrate into the international economy, use available external financial resources. The civil society has been gradually changing as well. It differs from the society that was even five years ago, there is understanding of the price of freedom and civil rights.

We have an association with the EU and there's no going back for us. Since the government is willing to continue communication on the international stage, we should solve the problem of sustainable development as it is important for the society we integrate into. If we are moving toward the EU it needs to act. It does not mean to pattern upon the EU experience but at least to make sense of it, adapt, show understanding. For Europe, perhaps, this phase was typical 10 years ago and notwithstanding that we are behind, the direction and parallel movement with our partners are essential.

During the forum we got to know that the major exporting countries of agricultural products are planning to make a great leap forward in the nearest future and moving towards it. By 2025, New Zealand intends to double agricultural exports and Brazil intends to double gross output.

It is only possible since they integrate actions of three components: business, government and society. Looking at the EU progress in 1980-1990, when the emphasis was put on production, we can observe that it did not give a synergistic effect because the process was hampered by the state and society. The progress accelerated when the orientation to gain profit was shifted away. In Ukraine business is still focused only on the enrichment and, therefore, our development is so slow. There is no qualitative leap forward due to the fact that such three factors as state, business and society are not balanced.

In order to increase production, the funding is necessary and in order to multiply it the investment attractiveness should be enhanced. For this purpose, it is necessary to enlist the support of international community. Everything is interconnected, you cannot just focus on the efficient production as there will be no perception in the community, support and resources. Unfortunately, very slow progress forward can be observed at present. While in other countries the annual agricultural growth is + 5 - 7%, in Ukraine it amounts from + 0.3% to 2.3%. 

Issues concerning environment, social and economic development are becoming more important and will be acute with introduction of the land market. The land will be valued more by the owners. For example, in Brazil 30-40% of the preserved natural areas are privately owned. People have every right to start sowing soybeans or corn even tomorrow. But they don’t do it since they understand that they will receive a short-term effect, and in the long-term perspective of 10-20 years such actions are not justified. Thus, in Brazil the private property provides a possibility to see beyond of more than 3-5 years, and without such perspectives the incentives simply do not work. A significant advantage for Ukraine is that the knowledge, expertise and experience to do it right at once are available for us.

Long-term experience has shown that qualitative leap forward occurs only when the interests are balanced and integrated. This effect is not calculated in business plan but is clearly visible within 3-5 years in terms of macroeconomics. Therefore, in Ukraine it is high time to act since we have already gained the guidelines.

Text has been drawn up specially for AgroPortal.

 




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