Unlocking Ukraine’s production potential

Abstract

Rural areas in Ukraine are facing a strong dualisation between large corporate farms that often belong to even larger agro-holdings, the modern successors of kolkhozes, on the one hand, and private farms on the other hand, the latter of which comprise a smaller number of relatively dynamic commercial farms and a multitude of small household farms that largely produce for subsistence. This dualization is a reality that cannot be reversed, but there is an urgent need to halt the further concentration as well as the continued fragmentation of holdings, to make export licences available more freely and openly and to stop the persistent loss of soil fertility that results from intensive cultivation without adequate nutrient replenishment. These are only some of the steps required to unlock Ukraine’s production potential and to enable dualised systems to operate more effectively and sustainably. Policies will also have to take into account the fact that agro-holdings currently appear to be far more financially vulnerable now than they seemed to be a few years ago. At any rate, from 2014 onwards, the conflict in the eastern part of the country overshadowed much of all this; this chapter ends with a number of suggestions on how a less ambitious agenda for trade agreements might help reduce some of the tensions.