russia & ukrainerussia & ukraine by: regina fayyer & nupur modi
TRANSCRIPT
STATE OF AGRICULTURE IN CENTRAL & EASTERN EUROPE
RUSSIA & UKRAINE
By: Regina Fayyer & Nupur Modi
RUSSIA
AFTER THE BREAK UP OF THE SOVIET UNION IN 1991…
There was a substantial food price crisis
Large state farms had to deal with the sudden loss
of heavy government subsidies
Livestock inventories declined, pulling down demand for feed
grains
Area planted to grains dropped by 25% in less than five years
The use of mineral fertilizer and other costly inputs plummeted,
driving yields downward.
After ten years of decline, Russian and Ukrainian agriculture began
to show signs of improvement.
HISTORY – Brief Overview Largest republic of the Soviet Union
Attained independence in 1991
Capital: Moscow
Decline in agriculture in 1990’s – Economy worsened, food
shortages and crime rate became a problem.
Recovery in 2000
• Regional Distribution: 9 Major Regions – Central European
Region; North and Northwest European Region; Volga Region;
North Caucasus; Ural Region; Western Siberia; Eastern
Siberia; Northern and Northwestern Siberia; and the Russian
Far East.
RUSSIA
Agriculture & Main Crops Grains (most important) – Occupies more
than 50% Wheat is dominant – First major grain Barley – Second major grain• Corn, sunflower seed, legumes, potatoes,
production of vodka, beets, flax, cabbages, apples, tomatoes, carrots, meat, milk; rich in mineral resources.
RUSSIA
Imports Top three important partners: Germany,
Ukraine Russia Machinery Vehicles Electric & Electronic Equipment Pharmaceutical Products Semi finished Metal Products Consumer Goods Meat Sugar $260.4 billion
RUSSIA
Exports• Export Partners: Europe, North America, Japan, Cuba, etc.
• Leading producer in diamonds, nickel, platinum, oil, and
gas
• Petroleum and petroleum products
• Wood and wood products
• Metals
• Chemicals
• Wide variety of civilian and military manufacturers
• $365 billion
RUSSIA
Illicit Drugs
Cultivator of:CannabisOpium PoppyMostly for domestic consumption
RUSSIA
Industries & Industrial Production
Growth Rate – 21%
Mining and extractive industries producing coal, oil, gas, chemicals, and metals.
All forms of machine building from rolling mills to high performance aircraft and space vehicles
Ship building; road and rail transportation equipment; communications equipment; agricultural machinery, tractors, and construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables.
RUSSIA
Agricultural Enterprises & Private Farms
• State and collective farms dominate production of most agricultural commodities, including about 85% of grains and over 75% of sunflower seed.
Agricultural enterprises tend to be big - Average size of nearly 5,000 hectares (12,500 acres) - Larger in the spring wheat region than in European Russia.
Private Farms tend to be much smaller - Average size of about 50 hectares (125 acres) - Account for a growing percentage of Russia’s commodity production
RUSSIA
Conflicts & Difficulties Climatic and geographic factors – Limit
agricultural activity to about 10% of the country’s total land area
Perish of crops due to weather related reasons: Severe frost damage Ice crust or unusually persistent snow cover Heaving Soaking Shortage of agricultural machinery – In poor
condition and machinery is deteriorating faster than it is being replaced
RUSSIA
FOOD INSECURITY IN RUSSIA• Linked to diets• Children: Low rates of breast feeding, possible deficiencies in weaning practices, lack of Vitamin C and iron deficiencies.• Adults: High fat, high cholesterol, low fiber diet – Low consumption of fruits and vegetables; high consumption of dairy, meat, and sugar, and higher than recommended alcohol consumption.• 5% of population considered to be undernourished per FAO • The Russian Government can greatly reduce health risks in the country by promoting healthy diets and a healthy lifestyle, and by educating health professionals, teachers, and children in principles of a healthy diet.
RUSSIA
Agri-Food Trading Relationship between Russia & United States
Benefits include: Greater opportunity for all WTO countries Farmers, manufacturers, and service
exporters will gain new, meaningful market access to Russian markets.
Tariffs and non-tariff barriers to trade Operating according to international rules of
trade or be subject to action by the WTO dispute settlement process.
Poultry, Pork, and Beef Agreement - Both American farmers and Russian consumers win.
RUSSIA
Transnational's
2 Main Agricultural Companies: Monsanto – 2 locations – Producer of
leading seed brands in large-acre crops like corn, cotton, and oilseeds (soybeans and canola), as well as small-acre crops like vegetables
Archer Daniels Midland Company (ADM) - Processes oilseeds, corn, wheat, cocoa beans, oats, barley, and peanuts.
RUSSIA
UKRAINE
History
Attained independence in 1991
Decline in agriculture through 1990’s
Recovery in 2000 Agricultural sector
produces 12.8% GDP* Employs a fifth of the population* One of the most important sectors of economy
Capital
Agricultural Sector
Main crops are cereals, sunflower seeds, and sugar
5th largest exporter of cereals in the world Mineral resources are iron, magnesium, and
coal Livestock farming includes cattle, pigs,
sheep, horses Organic agriculture developed in mid 1970s 28% population employed in agriculture
sector
Organic Agriculture Dr. M. Schykula Protective soil preparation system: increasing biological soil activity Farm named “Orbij” in the Poltawa region Ukrainian – Swiss project • Development of organic agriculture• Certification, production, and marketing of organic products• Book: “Soil Protecting Organic Farming in Ukraine”• Export oriented organic farms developed in Europe
Development of organic Farms
Regional distribution Primarily in South
Ukraine: Odesa and Kherson
Central Ukraine: Poltava
Western Ukraine: Ternopil and Lviv
Conditions are favorable to organic farming
Large vegetable production
Animal production is less important
Focus lies on export products: hard wheat, sunflower, buckwheat
Ukranian Market Undeveloped Domestic market
lacks activity Organic farming
is fully export – oriented (EU)
Concentrated in a few agro-investment corporations
Small scale production through farmers’ markets
No organic grocery stores present
Marketing Produce Direct sale off the
field Printed periodical
publications TV, newspapers, and
magazines But, farmers lack:1. Information on sales
markets2. Transportation of
produce3. High purchasing
prices4. Good quality of
produced goods
International Trade GDP is 115% Main export
partners are Russia, Turkey, and Italy
Commodities are iron, steel, mineral fuels, oils, nuclear reactors, boilers, machinery, machine tools, cereals
Russia is a major supplier of oil and gas to Ukraine
Problems with farming
Industrialization – caused land degradation
Low technology – caused use of old machines with low productivity
No recycling Irrational use of
land Soil erosion
during tillage
Food Price Crises Cost of staple items
such as bread, eggs, and vegetables – increased 20 to 70%
Government responds by restricting grain exports
Reduces local supply – higher prices
Private investors – buy and develop Ukrainian land
Poor receive reduced incomes – poverty increases
However, a sustained economy led to decrease in poverty: 32$ in 2001 to 8% in 2005
U.S. and Ukraine : USUF Non-profit +
non-governmental organization
Facilitates democratic development
Encourages free market
Enhances human rights in Ukraine
Promotes business and economic development in Ukraine and the West
Transnationals in Ukraine Monsanto 1. In 1997, imported GM
bt potatoes2. Field trials went on for
~ 2 years3. Ukrainian media picked
up stories on GM foods from UK
4. Minister of health refused transgenic potato consumption for humans
5. Monsanto exploited the lack of biosafety rules in Ukraine b/c destroying GM potatoes led to an environmental impact
6. No recourse to compensation
Transnationals in Ukraine Cargill1. Active in Ukraine
since 19912. Main office in Kiev3. Oilseed crushing,
cocoa trading, sugar trading, juice concentrates trading, vegetable oil trading
4. Invested US $85 million in Ukraine’s agricultural sector
5. Largest project : greenfield sunflower seed processing
Comparing Russia & Ukraine Both countries do not have
much government support for agriculture
There is poverty among both countries
Both countries have average nutrition, depending on socioeconomic class
Both countries rely on exports to have an acceptable economy
There are some programs and groups that are trying to increase agricultural support, but it is very difficult
Both countries export with other European countries, as well as each other
Imports and exports are similar
CONCLUSION Does the system need a
change?
Yes, the system needs to be changed. Even though agriculture has changed a lot and improved since the fall of the Soviet Union in 1991, the system is not in adequate condition as it should be. This is mainly due to the fact that products are mostly being exported, and not a lot is being imported. Thus, poverty is resulting and increasing. Poor people do not eat at much, and they have to rely on selling products in farm markets. (80% population depends on agro jobs).