Photo by Dan Meyers on Unsplash

The Ukrainian agricultural sector requires investments in areas such as irrigation. However, the news that Valmont Industries is entering the Ukrainian market creates hope that things might improve soon. 

Valmont Industries, a global leader in agricultural equipment, is entering the Ukrainian market soon, revealed Roman Leshchenko, Ukraine’s minister of agrarian policy and food, recently on Facebook. The minister pointed out that “almost every second irrigation system in the world is their product” and has big expectations.

“The company knows about the successful implementation of land reform and the start of irrigation reform in Ukraine. It has ambitious plans to deploy its high-level localization production: it will be able to produce and sell full-cycle irrigation systems in Ukraine – from pump stations to latest-generation rain machines,” wrote the minister and pointed out that a new law is on its way in parliament. 

The new law (No. 5202-D) focuses on accelerating the investments in irrigation in Ukraine to increase agricultural output. Among other things, the ministry expects to support manufacturers in the agricultural sector.

“Our team has always been, is, and will always be a priority: engaging in large-scale investment projects in Ukraine, providing long-term cheap funding for agrarians, and implementing leading innovations of global companies,” wrote Leshchenko. 

The problems in the sector

The Ukrainian harvest has been good this year. UBN writes that Ukraine exported 21,753 tons of grain this marketing year as of November 15th, 3,018 tons more than in the same marketing period last year. However, last year, the harvest was affected by droughts and floodings, and it is expected to increase with climate change over the next decades and damage the Ukrainian farmers. 

“We have already seen the kind of impact droughts can have on this sector: in 2020, the country lost nearly 400,000 hectares of winter crops due to severe droughts. According to forecasts, if this trend continues without efforts to improve Ukraine’s irrigation system, the predicted loss can be up to 40%. So, the earlier we work to address the issue, the better,” said Jason Pellmar, the regional manager for Ukraine at International Finance Corporation (IFC), recently to Interfax-Ukraine

That Valmont Industries is entering Ukraine would hopefully speed up the Ukrainian sector’s modernization process with more irrigation systems installations. 

The landmarket reform is the driver

In a recent interview, Leshchenko said that the driver behind the recent changes and investments in the Ukrainian agricultural sector is the recent landreform. It entered into force in July and ended a more than 30-year ban on selling Ukrainian farmland. Ukraine has 42 million hectares of farmland, and the reform should release the sector’s potential, as farmers can now own their land. The Ukrainian Agri Council estimates that the Ukrainian state budget losses around 815 million dollars per year due to the land market working in the shadows.

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“It is no exaggeration to state that this is one of the most significant landmarks in the 30 years of Ukrainian independence,” wrote Leshchenko recently in the Atlantic Council, “(the landreform) will provide a major boost to the country’s already powerful agricultural sector, helping to drive growth while eliminating corruption.”

The state-owned the land during the Soviet Union. After its collapse, the Ukrainian government subdivided the land into small units of 0.1 to 0.3 hectares in size, given back to the people. It was illegal to sell the land, and large agricultural holdings instead had to lease it, a considerable administrative burden. 

“Today, agriculture accounts for 20 percent of (the) gross domestic product in Ukraine, and 50 percent of Ukraine’s exports is agricultural products,” said the minister in a recent interview with Agri-Pulse, “But without biotechnology, fertilizers, and pesticides, there is no chance to be the (global) leader in agricultural production.”

Not all farmers know about the landreform or want to sell