Fatih Şahin Фатіх Шахін Ukraine, business and international experience — since 2004
Agriculture & Food

Holdings, farms and households

Ukraine has three agricultures operating on the same territory, with different technology, different finance and different products.

2014 09 28. Луганская область
Photo: ВО «Свобода» · CC BY 3.0

Talking about "Ukrainian agriculture" as one thing obscures more than it explains. There are three distinct systems, and a policy that helps one frequently does nothing for the others.

The holdings

Very large operators farming tens or hundreds of thousands of hectares on leased land, with their own storage, machinery fleets, agronomists and often their own export desks.

They grow commodity crops for export, borrow internationally, and are the part of the sector visible in trade statistics.

The mid-size farms

Family or partnership operations of a few hundred to a few thousand hectares. They have machinery but not enough storage, sell at harvest, borrow from input suppliers and are the most credit-constrained group.

This is the segment where agrarian receipts, warehouse certificates and the land market matter most, and where a small improvement in financing changes the most outcomes.

The households

Plots of a hectare or less, worked by hand, producing potatoes, vegetables, fruit, eggs and milk. Collectively they account for a very large share of certain products and almost none of the exports.

They are largely outside the formal financial system and are affected by rural infrastructure, local markets and transport rather than by credit instruments.

Why the distinction matters

Export corridor policy helps the holdings. Credit reform helps the mid-size farms. Rural roads, local markets and cooperative collection help the households.

Announcing any one of those as support for "farmers" is imprecise, and the imprecision is usually where the political argument starts.

Three separate agricultures working the same ground means three separate sales models in my customer list: a tender for the holding, financing for the mid-sized farm, nothing for the household. Most policy discussion counts all three as one "farmer", which is why it fits none of them. Every support programme that skips the distinction gives the money to whoever is already strongest.

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