ukraine: century of survival

7/27/2019 Ukraine: Century of Survival

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I N G L O B A L T R A N S I T I O N

UKRAINEA Century of Survival

PAST ..

Walk KreshchatykStreet from Kyivs

Golden Gate tondependenceSquarehen uphill beyond

St. Sophia Cathedral,and experience 1500years of history,abulous views ofhe Dnipro River,

and a century ofurvival....

1932: HOLODOMOR Memorial:

Stalin forces unwilling farm

families into cooperatives by

starving to death 1.3 million Kyiv

citizens within city walls.

1942:BABYAR: Nazisinvade, bomb cathedrals,shoot 300,000 jews, artists,

professors, scientists, byfiring squad & bury themenmasse at this site.

1986: CHERNOBYLnuclear disaster 60 milesfrom Kyiv leaves 60,000exposed to nuclearcontamination + futuregenerations.1990S:Bread Lines &Empty store shelves.2004:ORANGE REVN:250,000 gather in Inde -pendence Square todeclare independence.2005:CowboyCapitalism

obetrotters View Issue No 7

2010: Today at the end of Kreshchadyk St.

youll find high end boutiques, a bountiful

indoor market, and chic nouveaux

restaurants. The borsch (beet carrot soup)

and Varenyky (veg and meat dumplings)

are out of this world! If visiting we highly

recommend you call & request Ludmilla

for a guided walking tour of Kyiv. +36 30

296 5001. Shes a walking history book

Left : Ukrainian Egg Mosaic

! Right St. Sophia Cathedral (1200 A.D.)

The Future for Ukraine clearly lies in Agriculture. Ukraine has 6 million small farmers but the

own 140,000 + acres each. With millions of acres of farmland as fertile as the Red River Valley, it p

a great opportunity. Unfortunately, Ukraine lacks rail infrastructure, has only 55% of its needed gr

storage capacity, and farmers cannot sell their land (but they lease it for $1265 per hectare), The n

elected President has pledged land reform as a top priority to enable private sale of land by 2012

are several young ag economists advising the current government who are pretty clued in. But

who have been there a long time do not expect much change and have been successful despite th

political realities. Their stories are not unlike many farmers we know -- the biggest risk takers are

farmers - they know what it means to lose everything in a day. the difference in Ukraine is there islittle crop insurance and no government subsidy. Here are some stories:


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P R O G R E S S

ot often wea real rockettist but Dr.ievsky is onetie). Now a

ems specialistdvisesdwide onlopment ofcooperatives.so heads theine Agrarian

mber with overmembers . One4 degrees isBostonersity and he is

well connectedwithin US AID,World Bank, andEBRD. Andrievskyadvises the newYanokovichadministration andclearly articulatesthe need for accessto financing, ruraldevelopment,research

connections withuniversities, and acompetitiveagriculturalinfrastructure.

MODERNIZING AGRICULTURE: Pioneers in this area are guys like Peter Mitchell, a Scocame to Ukraine as a seed potato consultant in 1992. Seeing opportunity he rented his farm in Scotland moved to Ukraine with 100 hectares of land in the Voltava region as a plot test. He began sellinand naively agreed to take payment after harvest. Of course, the customers did not follow correctherbicide instructions -- the seed didnt germinate -- and he didnt get paid. He says nowadays theworld is a small world in Ukraine and hes learned who to trust. As Director of NCH Ukraine, a unNew York Investment Company, Peter manages thousands of people and hundreds of thousands oHe says the 90s were lost years - completely chaotic-- but things are getting easier. Hes been throuland lease arrangements -- and employs many to manage these, his staff is well trained, and he nowvendors he trusts. He doesnt hold his breath for land reform, but believes it will happen. NCH is liproof that modernizing & profit can be done in Ukraine.

Alex Lissitsa, Chief Advisor to the Minister of

Agrarian Policy in Ukraine, was educated as an

Economist in Germany, he speaks fluent German

English, Russian, and Ukrainian, and his compan

advises farm operations . Alex was quick to prov

relevant statistics related to farm size, capacity, e

import, infrastructure needs, capital investment

opportunities, as well as the need for education &

attraction of young people to ag, and land reform

a bright spot on the Ukrainian horizon and eager

learn more about North Dakota partnership possin modernizing infrastructure and development

export assistants for bright students who can qua

ag econ/farm management. He will visit ND.

ALEX ORONOV (left)is another living example of howAg can be modernized and profitable in Ukraine. As aUkrainian American immigrant Alex made his moneyselling dissident Russian Art in New York andBeverly Hills with customers like Armand Hammer. In1996 he invested $2MM in a Ukrainian farm equipmentoperation. His partner defaulted on the investment soAlex returned to his homeland to get his equipmentback. Through some political PR tactics, and somestrong arming, he succeeded... But what was he to dowith Ag equipment? There were no buyers in 1996. So,

he leased 500 hectares of land, & hired an ag econprofessor for some private agronomy lessons. Today hehas a fully automated farm operation of 85,000 acres,new grain storage facilities, a cattle ranch, and modernfarm equipment from ND! He employs 2 orthodoxpriests because it is important to the several hundredvillagers he employs, and has several german shepherdwatchdogs prowling his corn fields for harvest thieves.He sells grain to customers like Cargill and aims to sellused equipment to farmers who cannot gain access tocapital. Hell exchange it for grain and cash. Hisoperation is in partnership with a Swedish bank and isone of the few with audited financials & totalautomation from field to plate.

ASTARTA Director of Agronomy, Boris Katas, led a42000 hog & 5.5 MM chicken operation before therevolution. Although his current company, Astarta, is ahighly successful sugar operation in Ukraine , Boris sayscoops were actually better organized during communisttimes. Coops are what the communist systems did bestin terms of distribution, but of course, there was noregard for productivity. His former hog operation wasthe largest in the Soviet Union and supplied meatlocally(and ran out every day) to the tune of 150 tons.Now the consumption is half that due to increasedprices and lower incomes in that area.

ADVICE from these gentlemen for

business in Ukraine: Work with somwho can navigate the political machinecall it corruption). Employees often vleisure time more than money, so workinhours for more money is not often the bestrategy. The country has lived a centurysevere survival- given this legacy Ukrainnot easily trust people and are not compopen. Therefore, the American negotiatitactic to put everything on the table ismet with skepticism. These gentlemen h

spent YEARS developing a trusted netwTheir companies have also worked to detheir community/village as a charitableendeavor, which they say is crucial to loand productivity, but also helps to keepauthorities at bay.

FUTURE: Ukrainians owe much of the pmade in Ukraine to these gentlemen andlike Dr. Haahy, former Vice Minister to tPresident of Ukraine (left), an Ag Econowho pioneered much of the ag reform anfought for a capital market structure beforrevolution. He is back developing reform legi

with the new administration.


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K Y I V

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Next Generations: But the real futurereally lies with the next generation ofUkrainians like Andriy Solva, AndyLavrik, and Svetlana Mysodoevichwho are graduate student exportassistants at NDSU in Agmanagement. They are working withNorth Dakota exporters to sendmodern equipment to Ukraine andalso working to gain first handknowledge about how to manage aproductive agribusiness. As Ukrainecontinues to renovate its buildingslike the one below these bright younggraduates will renovate theireconomy. All of them say Ukrainehas some challenges, but they knowwhat needs to be done, believe thebusiness environment is far betterthan it used to be, and in fact is agood environment for smallbusiness nowadays. WE arefortunate to have such terrific ,trusted partners both young andold in Ukraine. We left Ukrainevery inspired by these people, theirtenacity, and their commitment touplift their country.

ukraine: century of survival

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