Farmers of Ukraine passed the peak of crisis

The last marketing year became rather difficult for agricultural producers. The beginning of the year was signalized with the financial crisis, which increased all interest rates of the previously taken credits. The record low prices of agricultural products also worsened such situation.

During the period, many agricultural producers marked the essential worsening of the financial condition of own agricultural economies, several producers declared about restructuring of won enterprises. How much did the financial condition of agrarians change in 2009, and were the negative forecasts of development of the situation, sounded by agrarians at the beginning of 2008/09 МY, the evidences of objective factors or the first psychological reaction at the crisis influence? The present article provides answers at the mentioned questions and other issues, concerning investment plans of agricultural producers in 2010.

Beginning from July 2006, twice a year APK-Inform Agency provides polling of 400 agricultural farming enterprises with the land bank of over 300 ha in all regions of Ukraine. At the same time, the sampling of agricultural enterprises is representative, in other words we kept the structure of agricultural enterprises of the country in diminished variant while forming the study (through regions of the country, through sizes of land areas in the economies). During the period of realization of the pollings, we received the possibility to observe the dependence of the financial condition of agricultural producers on agricultural policy of the government. The underneath table shows the tendency of the reduction of farmer estimation of financial condition of own agricultural enterprises in the period of validity of the prohibition of grain exports, and the growth of estimation indices in 2008, in the period of rather high prices for agricultural products.

According to farmers, Ukrainian agricultural enterprises faced the considerable worsening of own financial condition at the end of 2008, when the economic crisis appeared to Ukraine, accompanied by the record low prices for grains and oilseeds. However, in July 2009, agricultural enterprises of farmers started improving own economic situation, and at the end of 2009, the estimation indices of farmers grew by almost 2 times.

Forecasts of development of agricultural enterprises for the nearest months became more optimistic. At the end of 2008, 23% of questioned agricultural producers declared about possible worsening of the financial condition of own enterprises in the nearest future (and 19% only declared about the possible improving), but in December 2009, only 3% of the respondents provided pessimistic forecasts, and over 38% of questioned agrarians declared about more favorable development of the economic situation at own agricultural enterprises compared to the previous year. And nearly 55% of the respondents informed about the stable level of development of their enterprises in the nearest future.

Despite rather difficult economic situation in the country, the continuation of the credit hunger, the share of respondents, planning realization of investments in 2010, nearly doubled compared to the level in 2009.

At the same time, the majority of agrarians, which plan realizing investments in 2010, declared that the implementation of the mentioned plans will possibly come true after ending of the Presidential elections in Ukraine only. Many agricultural producers still did not specified own investment plans in development of own technical parks, widening of own land bank and foundation of new storing capacities in 2010 period, due to the direct dependence on the government assistance in the sphere. The respondents, which did not plan any investments in 2010, informed that the present attitude of the government to problems of the agricultural sector of the country became the main reason of such decision. According to Yuri Karasik, the chairman of the Agrarian Union, the debt of programs of governmental assistance to Ukrainian agrarians totaled 1.9 bln UAH in 2009. According to him, agricultural producers did not receive the complete volume of dotations development of plant growing and animal breeding, and compensation of credit interest rates and compensation of the half of the insurance cost of harvest volumes.

And the majority of agrarians, which decided to invest financial resources in purchasing of new agricultural technical equipment, marked that the plans would be realized at the expense of own financial means first of all.

Also, last year, Ukrainian agricultural producers changed own preferences during purchasing of technical equipment. In the previous year, 20% of the questioned farmers only planned to purchase import agricultural technical equipment, but at the end of 2009, the number of such respondents grew by 3 times. At the same time, the share of respondents, planning purchases of secondary technical equipment also increased (but equipment of import production only).

The half of questioned respondents, planning to purchase new technical equipment, declared about own plans to purchase new agricultural technical equipment of the domestic or the CIS countries origin. At the same time, the other half of questioned farmers preferred to purchase technical equipment of European or American origin. At the end of 2008, 71% of respondents informed about own plans to purchase new technical equipment of the domestic origin, and 3% only planned to buy secondary machinery. In December 2009, over 18% of questioned respondents declared about own plans to buy secondary import technical equipment, and almost 58% planned to purchase new equipment. At the same time, over 24% of the respondents, planning realization of investments in 2010, still did not determine what technical equipment would be purchased to their agricultural enterprises, expecting for the further development of price dynamics for grains and oilseeds.

During the last year, Ukrainian farmers did not become richer, but received a lot of experience. In the current conditions, Ukrainian agricultural producers should not rely on the help of the government. Ukrainian agrarians prefer investing own financial resources in effective agricultural production, in sufficient and practical technical equipment, which should provide the minimization of losses and increase profits.

In order to complete the article, we would like to inform you that experts of APK-Inform Agency plan to provide the additional scale polling of agricultural producers in March 2010 and determine the peculiarities of carrying out the spring sowing campaign-2010. Summarizing of results of the winter sowing campaign and estimation of the current condition of winter crops, forecasting of harvest results of the main grains and oilseeds in 2010, volumes of applied fertilizers and plant protectors, determining of sources of financing of the spring sowing campaign and etc. become the main targets of the mentholated study.

You can become acquainted with more detailed information concerning the study at the web-site of АPК-Inform.

Julia Trautskaya