Swedish investment in the realities of agricultural business in Ukraine: a successful project Grain Alliance
The global crisis of 2008, the consequences of which we are still feeling, has become a serious challenge for many companies around the world. But among the general there are companies for which the crisis is, first of all, new opportunities, new prospects. In 2008, the Swedish company Grain Alliance became the owner of the Ukrainian agricultural enterprise Baryshivska grain company.
How difficult is it to adhere to European production standards in Ukrainian conditions? What challenges does land reform pose to the agricultural sector?
All this in an interview with the CEO of the Baryshivska grain company Grain Alliance Yevheniy Radovenyuk.
– Tell us briefly the history of the company and what is its ownership structure today?
– Baryshivska grain company today is an enterprise with 100% Swedish investment. The company has been owned by the Swedish company Grain Alliance since 2008, which is Chaired by Mr. Johan Damne. In general, the history of the Baryshivska grain company dates back to 1998, when the Harvest Moon Est company started operating in the Kyiv region. Since then, our company has grown and taken a strong position in the agricultural business of Ukraine. Today Baryshivska grain company rents more than 57 thousand hectares of land, has 6 elevators with a capacity of 260 thousand tons of grain storage. The company has two dairy farms with a total population of 1,200 cows. We employ more than 1,000 employees in five regions of Ukraine: Kyiv, Poltava, Khmelnytsky, Chernihiv, Cherkasy regions. Despite the global economic challenges posed by COVID-19, global climate change, we are not curtailing investment programs in the agricultural sector. We are implementing precision farming technologies in our fields, building elevator facilities using energy efficient technologies. In particular, two of our elevators in Nizhyn and Pyriatyn run on solid fuel – wood pellets and grain processing waste. It is clear, that running an agrarian business in Ukraine is quite difficult. Weather conditions, shortage of skilled workers, uncertainty in land issues. Nevertheless, we continue our work on a common goal – to build a modern, efficient, European enterprise in Ukraine.
– Legally, Baryshivska grain company is Ukrainian or foreign?
– The company’s headquarter is located in Stockholm, but all operational activities in the agricultural sector are concentrated in Ukraine. We position ourselves as a Ukrainian company. We pay taxes in Ukraine, create jobs for Ukrainians, develop the Ukrainian agricultural sector.
– To the question of land. Does the Baryshivska grain company cultivate its own or the leased land?
– We rent 57 thousand hectares of land. This is a feature of land management in Ukraine. Since March 1992, the Land Code has introduced a land moratorium, which until this year was constantly extended by the highest legislative body – the Verkhovna Rada. Therefore, agricultural enterprises do not have the right to buy land, but only to rent it. From 1995 to 2000, the land was distributed among the peasants who worked on collective farms. They are our main partners in agribusiness.
– Is the company ready to buy land from farmers if the land market will be open? And if this does not happen – will you continue leasing?
– The activities of our company in Ukraine are based on openness and honesty with partners. Regardless of the form of cooperation. We have informed our landlords that if the land market is approved, we are ready to buy the land at the market price. Today we provide our partners with comprehensive free legal assistance in land matters, we explain their rights. If the land reform is stopped, we are ready to continue working with peasants on lease terms. The Baryshivska grain company has established a good name in the villages of Ukraine for the last 22 years. Charitable assistance to communities is another feature of our activity. Through the projects of the Baryshivska grain company Charitable Foundation, we help the development of hospitals, schools, kindergartens, and cultural and sports institutions in villages. Therefore, for us the issue of introducing the land market is relevant, but not extremely acute.
Of course, the ownership of land would give impetus to the development of the agricultural complex of Ukraine, enterprises in the industry could be freely credited, have working capital for their activities. At the same time, if the market has fair competition and transparent rules of the game. If the rules of the land market are the same for everyone – we take this form.
– How will the basic law of land reform in general change the work of the Baryshivska grain company Grain Alliance?
– Any innovations in the land issue affect our work. After all, land is our main means of production. If Ukraine decides that a referendum should determine the right firms with foreign investments to buy land or not, we respect Ukrainian law. However, I would like to say that this issue cannot be approached without understanding all the details. The economic crisis in Ukraine, including that caused by COVID-19, has revealed many business weaknesses. At the same time, as a foreign-invested company, we have found the resources to help society. The Baryshivska grain company has provided aid to hospitals in the villages where we cultivate the land. We do not advertise it widely – it was our duty as an honest and sincere partner. I think that Ukrainians should responsibly weigh all issues regarding land. Will only domestic enterprises be able to give a market price for the main economic resource of Ukraine? Who will be able to provide civilized, European tillage technologies? A lot depends on the answer to these questions both for Ukrainians and for us, farmers.
– Thank you for answering the questions