Posts Tagged ‘Ukraine Farmland’

Who will own the Ukrainian breadbasket?

May 19, 2014
economics

SMEs are “small and medium enterprises”

The rich black soil of Ukraine is the nation’s greatest asset.  The soil made Ukraine the breadbasket of Europe and Russia in an earlier era, and while nowadays Europeans import wheat from North America, the Ukrainian land is still a coveted prize.

Click to enlarge.

Note that none of this is certain.  Click to enlarge.

Investment in farmland by wealthy Ukrainians has tripled in the past five years, and the previous Ukrainian government discussed allowing foreigners to purchase Ukraine land.

There was even talk that the Chinese would lease an area larger than Massachusetts for 50 years.  I put this under the heading of “interesting if true.”  The fact that something is discussed doesn’t mean it will happen.  But Chinese have been buying up large amounts of farmland in Africa and Australia, so there is no reason why they wouldn’t be interested in Ukraine.

The conflict with Russia has disrupted both Ukrainian grain exports and the Ukrainian harvest, but this is temporary.  Analysts seek a great potential in Ukraine as a breadbasket, not for Europe and Russia, but for the rising middle class of Asia.

Who will own the breadbasket?  Ukraine has accepted a rescue package for the International Monetary Fund, which typically demands that countries open up their resources to foreign investment.  Presumably, in the current state of affairs, this would not include Russian investment.

The struggle in Ukraine is not only a conflict over language, ethnicity and political ideology; it is a struggle for control of resources.

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