Гарі Роше, PhD of Agricultural Sciences, ex-project manager of the World Bank in Ukraine, professor, lecturer at the International Institute of Management, Bank Credits Advisor on Crediting Dnieper on lending to agriculture, how to save the Ukrainian village, forcing Ukrainians to fall in love with the farmer's profession.
When Strategic directions for further activity were developed in the Bank's Credit Dnepr, we knew that small and medium-sized businesses, including agriculture, are not just where to grow, but potentially this segment is able to absorb the entire Ukrainian economy. Focusing on the support of small private farms, we do not hear of their current problems. And it concerns not only the government's declared reforms, the difficult decision to open the land market, etc., but also deeper and more fundamental things.
Despite the fact that Ukraine is not a homeland for me, here I spent as much time as in my native North America. I looked at the world in a different way, and I had a somewhat different idea of the basic conditions than my Ukrainian counterparts. After all, we all are the product of our environment and experience. Therefore, I was not surprised that many of the proposed solutions for the development of small family farms in Ukraine are more likely to be a reflection of the legacy of the Soviet system. But in order for agriculture to start a real upswing in Ukraine, it is not necessary to lose such strategically important things as popularization of the farmer's profession in society and high-quality education of specialists.
So what is needed to make the profession prestigious?
The key issue is management
The main export branch of agriculture in Ukraine is not for everyone. This is a seasonal, variable and extremely complex work, so owners need to adapt to a very specific production environment. Agribusiness requires participants of certain qualities that can be developed only if there is real experience in this field. Owners, managers, "family" management usually independently determine and develop the features of their own production, are highlight, while the hired workers of large representatives of the agrarian sector do not attach such importance to this. Based on my own experience, I will say that farming is a vocation. This is a profession for a lifetime.
In the United States, 96% of farms engaged in plant production are a family business that generates 87% of the total value of the American crop. These are the products that family members manage and engage in blood or marriage, and the business itself is passed on from generation to generation. That is, it refers to people who really love their own business, and not forced to do it because of the lack of an alternative. These are people who have found their vocation, who have deliberately chosen the countryside for life and who are confident that they can instil this love into their children and grandchildren. It is a model of agricultural production in North America and Europe, and, of course, it was the same in the territory of modern post-socialist states even before the Soviet government came to collectivize further.
Guarantee of profit?
Profit from the activities of farms should be an indicator of the success of the program for the development of their own small business. Revenues should be sufficient to ensure a decent standard of living for the entire family of farmers. It must be enough to develop the village and make the young people stay here and work, instead of moving into towns or leaving the country at all.
If production can not adequately provide the whole family, then farming can be combined with other types of activities. As international practice shows, the partial employment of some family members in agribusiness can free up time in order to find other sources of income. In aggregate, this will allow all team members to be provided.
It's time to give an honest description of the family farming, which is now mainly engaged in the former workers of the collective farms. These people grow vegetables for their own consumption. The same thing happens with animal husbandry - they breed pigs and cows exclusively for themselves, and surpluses of products are sold in the markets, so that they can earn some extra money. They do not want and are not going to expand their own production, build a business and endorse the aspirations of their children to get out of the village in search of a better life. Often, these people rent their land, because they can not think of anything on a square of several hectares, especially considering that such land shares are located among dozens of similar small plots. And in such a situation, I absolutely do not see the future.
If Ukraine really wants to succeed in developing the market for small and medium-sized agricultural production, as the government has declared, a qualitative approach must be developed. In North America, family farms also rely on hired labor, land rentals, and even contracting service providers. In Ukraine, the service is not developed, and we do not see that the government at the present stage contributed to all this. But these are additional opportunities, new jobs and an important condition for the development of the Ukrainian village. Here is an example. Once I had to take part in one project in another post-Soviet country, where we developed these services in the countryside. We purchased harvesting equipment to use it on an area of 120 hectares. Farmers with a bank of land of 20 hectares could not afford to buy such equipment. But we created a group of several private farmers, and for them the price was lifting. Even more, they have the opportunity to rent this equipment, in particular, state-owned utility companies for the cleaning of snow.
Expansion of similar services, ideas, initiatives, as well as training programs that support the development of small and medium-sized agro enterprises to improve their technical capabilities is essential. Here, the focus should be on viable business plans and management systems that are needed in particular in order to obtain bank loans and minimize risks. Innovative solutions to the various challenges faced by private farmers at an early stage can help them, even at the stage of creating united communities. The educational program will teach agrarians to effectively create and develop a small farm in Ukraine.
Such support could be provided by state universities and financed from the budget of the regions within the framework of the decentralization program. At the first stage, it would allow farmers to acquire the necessary knowledge, to deviate from significant costs, and to free up funds to improve and develop production. This will solve a lot of problems with migration from villages to cities and increase the rate of economic development in rural areas.
In the United States, educational programs for farmers usually involve specialists from higher education institutions that are engaged in applied research, helping people in economic and social development.
These are the functions of higher education that the state supports ("advisory services"). In Ukraine, with the support of American donors, similar organizations have also recently been created (http://www.dorada.org.ua/doradchi-sluzhbi-ukrajini.html), but their links to universities and research laboratories have not yet been established. And for success it is a necessary component. The way the advisory services in Ukraine could function is the topic for a single blog, and I will definitely write about it.
As for the educational program itself, for Ukraine, I believe, it could include the following directions:
- Applied research in agriculture and agribusiness economics;
- distribution of scientific works and analytics among agricultural producers;
- special schools or colleges for farmers;
- academic courses, etc.
I think that it is quite adequate at its expense to help the Ukrainian village and the most promising branch of the economy.