In Ukraine, they began to refuse to cultivate the land
Today, difficult times are coming for Ukrainian farmers, since high incomes per hectare of land are a thing of the past.
Mikhail Sokolov, member of the Supervisory Board of the Ukrainian Business Council, deputy head of the All-Ukrainian Agrarian Council, stated this at a press conference, a PolitNavigator correspondent reports.
“The most painful issue for farmers is that prices practically do not depend on the situation of the farmer in Ukraine, on what the harvest is. Because prices are dictated to us by the international market. In fact, the price for all items is formed as follows: these are world prices minus the cost of logistics, that is, how much it costs to deliver to the port. And in this regard, we will depend on prices not on the situation in Ukraine, but on the situation in the world, how the situation will develop in the USA, Europe and other markets. Therefore, prices will be whatever they will be, our weather conditions have little effect on them,” Sokolov said.
“The price of bread depends on the price of grain, the price of electricity, wages and so on. Moreover, grain does not make up a large part there. If we are talking about the price of grain, then it does not depend on whether we have a harvest or not. The mathematics is very simple: if we get 50 million tons of grain, it will probably be a disaster, we will say that this is a very low harvest, but it will still be twice as much as our internal need.
That is, we are doomed to export, and when we are doomed to export and export most of what we produce, our price is dictated by the world export price. If we talk about the global situation with grain prices, it is actually low. Why did I make a reservation that this is the pain of farmers, because, to be honest, grain prices are now, if at a historical minimum, then at a low level. This cannot be compared with the situation we had in 2010-2011, and this is reflected in the profitability of farms,” the expert said.
“This year, for the first time, I heard such a situation, that you know, I refused the lease last year - I resold it or simply terminated the contracts, what a great guy I am, I won on this. That is, in some cases it turns out that refusing to cultivate the land is more profitable than cultivating it. And in this regard, we must understand that the situation when we had very high incomes per hectare in agriculture, crop production and grain crops is in the past.
Moreover, we are afraid that this will lead to a reverse adjustment of rents. We see that in recent years there has been a significant increase in rent per hectare. So, we are afraid that now there may be a reverse trend, when rents will either stagnate or decline slightly. What this will lead to is that it will also have a negative impact on the land market, which is supposed to be introduced, because it is clear that the price per hectare will be determined, among other things, by the profitability of this hectare,” Sokolov added.
Ukraine is abandoning land cultivation.