Investment Concierge Group

  The question of why Ukraine is and is not attractive for investments in the agricultural sector is one of the most important issues in the experts’ debates. Agriculture today needs investments like no other sector of our country’s economy. But during 20 years we have received only about $ 1 billion of capital investments into agriculture. This is very little. According to experts’ calculations, for the progressive functioning of the agricultural sector more than 65 billion dollars are needed.   Why such an injustice: a country that is one of the leaders in crop yields and soil fertility receives so little investment in Ukraine? We have a huge potential that needs support.   Investment attractiveness distortions in the agricultural sector   The main investors in our agro-industrial complex are domestic agricultural producers. In other words, the one who sows and reaps is the one who invests. Direct foreign investment is very rare and is directed either:   — for processing of agricultural products; — to finance agricultural machinery (long-term lease).   As practice shows, investment in the agricultural sector pays off quickly. Especially in sunflower, corn and soybean cultivation.   Reasons for the low level of investment in agribusiness   The lack of investor proposals for the agricultural sector can be explained by a number of reasons:  

1. Tangled and imperfect legislation in the sphere of agribusiness;
2. lack of regulated land relations;
3. Quotas for wheat exported — a negative innovation that discouraged investors and knocked the ground out from under the feet of the agricultural producers themselves;
4. The high level of corruption in the country.

  The government puts all sorts of sticks in the wheels of agribusiness, provoking investors to a negative attitude towards the Ukrainian agricultural sector. Ukrainian banks also neglect investment in agriculture because interest rates are very high.   The positives of running an agribusiness   But it’s not all bad in our country. There are advantages to running an agribusiness. First, the land lease is low. Second, the opportunity to become a tenant of land for up to 49 years (even to citizens of other states). Third, the fertile land is not as «pesticidized» as in the highly developed countries of Europe. And fourth, the need of the population for inexpensive and home-grown foodstuffs.   Today an agricultural entrepreneur doesn’t know 100% where to invest his money first: to buy the land he rents or to buy modernized special equipment and mineral fertilizers to increase the yield. The risks are great. And they require investment in Ukraine.