Головна Market News Ukraine has reduced the crop area for niche crops

Ukraine has reduced the crop area for niche crops

Crop area for niche grain in Ukraine has been mostly decreasing over the last ten years as well as their production. For example, the total crop area of oats, millet and sorghum amounted to 580 thousand ha in 2009 but in 2014 it dropped to 440 thousand ha, consequently falling to 380 thousand ha in the last year. Record grain harvest for the last few seasons was mostly provided by wheat, corn and barley. While world prices are falling for above mentioned crops, only devalued national currency hryvnia supports the profitability of the production. However, there is a number of factors, which prevent the increase in production of more profitable niche crops, for example, continuing reorientation of the grain business infrastructure in order to work with high-volume production mostly.

Process of capacity growth is visible among many infrastructural enterprises, such as elevators and marine terminals. Logistics industry operators also expanding the capacities for grain transportation, ports deepen the berths in order to be able handling large ships – the whole system is being reconstructed to make a profit based on volume growth. As a result, small production crops, harvest of which is in a range of 100 – 600 KMT become less interesting for big companies. Along with them, niche crops are forced to lose in such a battle in agricultural business – small farms, farmers, population – those are all the drivers for niche crops, whose demand for such crops keeps continuously falling.

Process of capacity growth is visible among many infrastructural enterprises, such as elevators and marine terminals. Logistics industry operators also expanding the capacities for grain transportation, ports deepen the berths in order to be able handling large ships – the whole system is being reconstructed to make a profit based on volume growth. As a result, small production crops, harvest of which is in a range of 100 – 600 KMT become less interesting for a big companies. Along with them niche crops are forced to lose in such battle in agricultural business – small farms, farmers, population – those are all the drivers for niche crops, whose demand for such crops keeps falling.

However, in the current MY 2016/17 we observed the increase of acreage for buckwheat and peas. In comparison to the last season their harvest volumes grew 12% and 40.5%, respectively. In the first case, a sharp increase in domestic prices for buckwheat has prompted farmers to sow large areas and the surcharge for each hectare of sown from local public budgets; in the second – an active foreign demand and attractive purchase prices from exporters.

The increase in niche grain production is a highly complex task for farmers, who wouldn”t be able to cope with it by themselves. Support could and should be found from manufacturers and sellers of high-performance seeds, specialized plant protection stations, etc. For traders and exporters of the increase in the turnover of the niche crops will diversify their own businesses. Finally, the state is the one, which should provide support in the same manner as it used to help gardeners with the subsidies, while increasing the tax base at the same time. Without all of above mentioned, the total production of niche crops will likely continue to decline. And then, as in the case of rye, from producers and sellers of which, we may well turn into buyers of such grain products.

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