Ukraine Can Become Bread-Baskett of Europe Again

Ukraine really needs to develop its agriculture. It's going to be one of the vehicles for Ukraine's rise as an economic power. The main reasons are:

1. The food prices are going up to astronomical levels worldwide.

2. The yields on farming land in Ukraine are still extremely small, compared with the rest of Western Europe. Even Russia is now ahead on how much it produces out of the same piece of land.

Ukraine has rich land, which can potentially yield 4-5 times of its current harvest yields, due to lack of consolidation, lack of foreign investments (foreigners are still not allowed to own land in Ukraine!), the depleted land - thanks to brutal Soviet heritage (brutal to the land just as much as to the people), and to the lack of farming consulting talent, as well as technology.

The most important thing for Ukraine to do right now would be to open up its land for foreign ownership, which would allow foreign capital to come in and develop Ukraine's potentially very rich land.

Ukraine’s black soil tilled for private investment

"World Focus" feature on Ukraine, Thursday, Oct. 9, 2008

On Thursday, Oct. 9, the PBS television program "World Focus" will have a feature story on how Ukrainian farmers are benefitting from the global rise in food prices.

"World Focus" (http://worldfocus.org/) is a half-hour-long digest of TV news reports from around the world. The programs can also be viewed online, at their Web site.

This is the link to the video of the story:

Ukraine’s black soil tilled for private investment
Dave Marash reports from Kiev on Ukraine’s potential to open up land to private investors, feed the world and support its domestic economy.
http://worldfocus.org/blog/2008/10/09/ukraines-black-soil-tilled-for-private-investment/1724/

Is Ukraine the "Bread-Baskett of Europe"?

There is an old stereotype that Ukraine is the bread-basket of Europe and some people think that a revival of Ukraine's agriculture is the key to national greatness.

Unfortunately, this stereotype is no longer true. Ukraine's agricultural output today is about the same as Poland's and only about 60% of Russia's, Germany's, France's, Italy's or Spain's agricultural output, and about 66% of Great Britain's output. And that's considering the fact that all of these countries, except for Russia, are smaller than Ukraine in land area they occupy. http://en.wikipedia.org/wiki/Image:2005gdpAgricultural.PNG

Although I must admit that Ukrainian farming is still fairly outdated and definitely could benefit from the infusion of new technology and significant capital. Perhaps Ukrainian farming output could be doubled from current levels. If that would happen, it would become the biggest farm producer in Europe. Would that be enough to call it a "breadbasket of Europe" though?

In any case, the real wealth is in the brains and in the freedom to use them, as well as in the social capital - families, churches, education, civil society (especially the non-profit sector).

In that respect, Ukraine is looking promising. Negative family trends seems to have slowed down. Churches are booming. The civil society is much more vibrant than in most of the rest of Soviet Union. The percentage of college-educated people in Ukraine is roughly equal to that of Western European countries today, although the quality of education is uneven. That number should continue to increase if Ukraine is to become very successful and college standards should continue to be increased, as they are now. The societies of the Asian nations that have become major success stories have a much higher percentage of college-educated youth. Technology in Ukraine is booming, and in several areas, such as rocketry, tank technology, stem cells research, and others, Ukraine is in leading positions in the world. But investment in basic research needs to increase significantly if this edge is to be maintained and increased in the future.

Even more importantly, another condition that is highly important to economic and cultural success is the rule of law, and it is still quite weak in Ukraine. It's important to have simple laws that are respected by everyone. Ukraine's laws are complicated and contradictory, and there are simply too many of them. By simplifying and correcting its laws, Ukraine will strengthen property rights protection, significantly decrease bureaucratic redtape, and cut out most of the corruption that continues to plague Ukrainian society.