Sustain Ukraine's Agriculture

I wrote this in early 2021 when we were in a frozen conflict.

EXECUTIVE SUMMARY

Ukraine is Europe’s largest country by land area.??Estimates are that 58% of land in Ukraine is arable which means that it may hold the largest amount of arable land in Europe.??Agriculture in Ukraine is not even near its potential capacity.??Ukraine is currently in the process of Agricultural Land Reform which if not undertaken properly will result in the country losing too much of its most precious Natural Resource to foreign powers and corporations.??The very backbone of Ukraine’s economy is agriculture.??

Policies for Agricultural Development and Land Reform as still is their nascent stages which means that Ukraine can still develop and sustain comprehensive plans that benefit the country and its citizens.??The IMF and World Bank have made certain funding commitments to Ukraine based on Agricultural Land Reform.??Ukraine can make good on these commitments while also increasing liberalization and increased development of its agricultural sector.??Long-term solutions versus short-term growth are needed in order for Ukraine to protect its national assets.

In order to sustain Ukraine’s independence, action should be taken to protect its present and future.?Agriculture is one of the waves of that future as the world grows in population and countries scramble to feed their citizens.??This puts Ukraine in a very strong and unique position because it only needs 15% of its agricultural output to feed its own population.??According to some, the surplus of Ukraine’s agricultural output can feed about 600 million people (See?https://www.kyivpost.com/business-wire/ukraine-should-prove-to-be-an-agricultural-superpower-in-a-post-covid-world.html).

While this is excellent news for the future economy of Ukraine, it is not so good if Ukraine focuses so heavily on bulk commodities.??Bulk commodities provide decent revenue but they do not necessarily provide the best Return On Investment (ROI).??Value Added Agricultural Products sold to developed economies will provide the best ROI.??This is not to say that Ukraine should stop or ignore the export of bulk commodities but instead that heavy diversification in the agricultural sector is necessary for Ukraine to succeed economically.

Statistics, studies and reports are all valuable.??However, Ukraine needs practical ideas that can be implemented without a strain on the already limited state budget.??This Idea Paper presents some such initiatives.??Many more are most likely possible and practical.??Ukraine can help the world with some of its food needs but in order to do that, it needs help in developing the agricultural sector.??The danger that exists is the development of an agricultural oligarch class as well as the loss of agricultural revenues to foreign interests and corporations.??

Sustaining Ukraine through its strongest industry might well be the top priority beyond the conflict with Russia.

I.???????????????Background

Ukraine is in the process of developing and passing new agricultural land reform for the primary purpose of receiving low interest loans from several international monetary sources.??While Ukraine is in need of assistance in many areas, it needs to protect itself against exploitation.??What is the soul of Ukraine???In this case, this part of the body and soul of Ukraine is its natural nutrient-rich agricultural land.??The proponents of agricultural land reform talk much about “Economic Security”, which Ukraine does need.??But at what cost???

Ukraine’s agricultural land is its greatest natural resource.??The power of this natural resource is that it is completely renewable if properly cared for unlike most others that simply disappear once removed from the subsoil.??Ukraine’s agricultural land might best be classified first as “National Security” which happens to deliver “Economic Security”.??Matters of National Security are thus also matters of “National Defense”.??Ukraine is in the unique position of having to balance and adopt the rich agricultural land as all three.???The USA considers its agriculture as a matter of Nation Security as can be seen in this transcript?https://www.govinfo.gov/content/pkg/CHRG-114hhrg21154/html/CHRG-114hhrg21154.htm

While not the greatest example of governing, Belarus treats its agricultural resources as a matter of the same triune.??This includes its agricultural machinery sectors such as Belarus Tractor.??Political tensions may be high but not everything in Belarus is all bad.??For instance, Belarus’s agricultural products are held in high regards for their quality throughout the Former Soviet Union.??Business is one thing, politics is another.??Ukraine has the opportunity to adopt some production practices from its northern neighbor without endorsing Belarus’s national leadership.

Many large, powerful countries and corporations are pushing hard for the current agricultural land reform.??This seems to be a passive-aggressive hostile takeover of Ukraine’s most precious natural resource.??Ukraine recently blocked the takeover of Motor Sich by foreign interests in the interest of National and Economic Security.??However, it does not seem that agricultural land is being treated as National Security or Defense.??The American Midwest once had the same rich soil as Ukraine does.??Large monoculture operations have almost completed depleted this soil of its nutrient rich content (See?https://www.pnas.org/content/118/8/e1922375118?).??If Ukraine does not treat its agriculture as a matter of National Security and Defense, large agriculture corporations focused on monoculture will do the same in Ukraine.

Ukraine can still save its agricultural soul while effectively attracting Foreign Direct Investment (FDI) and increasing both bulk and value-added agricultural products.??The purpose of this report is to present some potential ideas and solutions that are attainable and affordable.??These merely provide a foundation on which to build for those Ukrainians who have a vested interest in maintaining independence for its agricultural means of production.

The statistics for the amount of arable land, number of farms\farmers\agricultural enterprises, percentage of world chernozem soil and other agricultural resources in Ukraine are available from multiple sources and are not presented here since they are easily researched and cited from multiple national and international governments, institutions and organizations.

I.???????????????Value-Added Agricultural Products (VAAP)

VAAP are Ukraine’s biggest potential for increasing revenue, employment, FDI.??Investments in this sector can also greatly aid in rural development and possibly stem the tide of rural outmigration.??Enterprises for processing raw agricultural products into VAAP are best located close to the farms that produce them.??One of the keys to success is to avoid the development of monoculture close to these processing facilities.??This can be achieved by establishing various medium-sized processing facilities within relatively close geographical proximity.??In addition, by utilizing this strategy, infrastructure, transportation and logistics becomes more cost effective.??Attracting FDI increases because most VAAP are developed for export markets.??Since Ukraine does not have many well known VAAP brands for export, FDI from EU producers with known brands is the best strategy for development.

Business Parks for VAAP factories and supporting businesses are a potentially effective strategy.??Targeting FDI with land ownership in these business parks to include individual factories and the business park itself is a compromise in land reform that could be explored.??Conversion of State-Owned-Enterprises (SOE’s) or the land they occupy for these operations could also provide potential revenue to the state.??All stakeholders from family\corporate farmers to national\regional\local government and investors could potentially benefit from this strategy while protecting Ukraine’s National and Economic Security.???The difficulty is maintaining the proper balance in these types of operations as far as oligarch and foreign ownership are concerned.??A way to avoid this could be encouraging and assisting raw material producers in partial or complete ownership of VAAP operations.??Low interest loans for this type of assistance can often be obtained from international NGO’s (World Bank, UNFAO\UNDP and others).??

Food Safety and Production Standards and Regulations must be clear, concise and enforceable.??Export markets can only be developed with these standards and regulations in place.??Lessons can be learned for this type of operation from Belarus as well as most all members of the EU, Canada and the US.??

Non-bulk produce (tomatoes, cucumbers, squash, etc.) is too expensive to transport outside Ukraine due to spoilage risks, Customs and other aggravating factors.??Additionally, VAAP offer a higher return on agricultural products because of the reduction of spoilage and the increased revenue they create.??Canned, jarred and dried products can be shipped anywhere in the world with minimal damage and loss through traditional shipping venues.??There is also a high value for refrigerated and frozen VAAP but these require modern warehousing and shipping systems that come at higher cost albeit with higher returns.

Organic VAAP products are in increasingly high demand in most of the EU ($45 billion), Canada ($5 billion) and the US ($55 billion).??Ukraine can not only be the “Breadbasket of Europe” but also potentially the “Organic Basket” of Europe.??Organic farming practices also fit into the TNSDE objectives as they protect and renew agricultural soil versus the practice of using chemical fertilizers and pesticides in a monoculture environment which has led to the almost complete depletion of organic soil matter in the US Corn Belt.??Obviously, in order to remain competitive in world food markets, Ukraine will have to utilize some of the standard commercial agricultural practices.??These large-scale agricultural practices can operate in many different soil environments.??Therefore, organic and natural agriculture should be carried out on the Chernozem soil to the greatest extent possible.?

II.?????????????Bulk Agricultural Commodities (BAC)

BAC is a large part of the Ukrainian agricultural market as can be seen with agreements reached with China, the UAE and other major nations on grain and corn exports.??Land Reform will potentially take this out of the state’s possession and place it in the hands of either large corporations or worse, foreign national and corporate interests.??Essentially, if modernized, this segment holds great potential to provide revenue directly to Ukraine and its citizens.??Thus, it is a crucial of TNSDE.??Modernization is essential for BAC.??A delicate balancing act is needed to make sure Ukraine and its citizens reap the rewards of this modernization.??Included within contracts for BAC with national governments should be contractual obligations for technical expertise and equipment for increasing production.??All parties must have a vested interest.??Ukraine’s vested interest is land and labor.??Foreign entities vested interest is guaranteed quality product at contractual amounts agreed upon.??Allowing any FDI and privatization of BAC lands may need stricter regulations.??BAC will flow out but the revenue should stay within Ukraine.

How can this be accomplished???In Alaska, citizens are compensated by the state for subsoil extraction of oil through the Alaska Permanent Fund Corporation (https://apfc.org).??Perhaps BAC production for export can be administered in a similar way.??Citizens of Oblasts where these activities take place could potentially be directly compensated from BAC produced there.??A component of the Permanent Fund could be that of a type of National Service for young people in those Oblasts whose primary revenue generation comes from BAC exports.??Those young Ukrainians would then have pride and a vested interest in the agricultural production that takes place in their Oblasts.??This could have a positive impact on the level of out-migration that is taking place in rural areas of Ukraine.

Ukraine could ensure that it does not pay the price for BAC but instead, reaps the rewards.??Ukraine already has share of the Organic BAC market and can easily increase its crops in this area to meet rising world demand.

III.????????????Increasing Rural Development and Decreasing Rural Out-Migration

Outmigration in Ukraine has been increasing for years with many factors contributing to this phenomenon.?The country is losing a significant portion of its labor force (See?https://ec.europa.eu/info/sites/info/files/economy-finance/dp123_en.pdf?).???Ukraine might do well to also consider that this is an issue of National Security since it causes the country to lose valuable resources for building its future.??However, no laws or regulations should restrict this movement of labor since remittances from those Ukrainians working abroad have a somewhat positive effect on the economy.??Rural areas suffer the most from the outmigration.??Developing Rural enterprises and increasing Rural Labor for VAAP and BAC will increase opportunities for young people to stay.??The big question exists on how either to stem this flow or outmigration or create an inflow of labor.

IV.???????????VAAP: Untapped Potential and Soil Regeneration (Industrial Hemp)

Industrial Hemp production in Ukraine is currently at very low levels according to the United States Department of Agriculture Foreign Agricultural Service (USDA FAS) at?https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Industrial%20Hemp%20Report_Kyiv_Ukraine_02-09-2020.??This sector is heavily regulated due to its association with Marijuana Hemp.??Industrial Hemp does not contain more than 0.3% of THC which is the psychotropic element of Marijuana Hemp.??Due to low production, Industrial Hemp is underutilized in Ukraine and has great potential to create an entire VAAP industry on its own.??There are multiple products that can be produced from Industrial Hemp (See?https://www.invegrow.com/projects). One of them, biodiesel, fits well with Ukraine’s objective to move toward renewable energies (https://nationalhempassociation.org/is-industrial-hemp-the-ultimate-source-of-renewable-energy/).??

Crop yields from Industrial Hemp vary based on whether being grown for hemp seeds or fiber.??Additionally, Industrial Hemp does not need the best soil conditions to grow so it is not limited to only the Chernozem soil of Ukraine.??Plantings have very high yields per acre.??Detailed analysis by the US government can be found here?https://fas.org/sgp/crs/misc/RL32725.pdf.

Industrial Hemp does have value as a cover crop due to its ability to regenerate overused soil and suppress weed growth (https://rodaleinstitute.org/science/industrial-hemp-trial/).??Regulation and growing of Industrial Hemp is required in order to suppress those who would be growing Cannabis Hemp for it THC content.??Canada is the second largest producer of Industrial Hemp behind China.??Thus, this crop is capable of being successfully cultivated in weather conditions similar to that of Ukraine.??The Government of Canada has already developed a system for growers that seek cultivate Industrial Hemp with guidance, licensing and other useful information (See?https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/producing-selling-hemp.html).??Ukraine could easily model the Canadian system and may even be able to seek guidance from Canada on developing its own Industrial Hemp market.??This is based on the assumption that Industrial Hemp and its VAAP grown in Ukraine will not be much of a competitive threat to Canada’s primary markets in the Western Hemisphere.

Ukraine would need to decide what its priority is for VAAP from Industrial Hemp.??The assumption would be that the first priority would be Biofuel.??Ukraine has the potential to grow enough Industrial Hemp for biofuel to power almost all its agricultural machinery (tractors, etc), delivery vehicles and gas-powered public transportation vehicles.??The amounts would have to be determined and it is possible that Ukraine would have enough surplus biofuel left over for export markets.??A proper strategy and implementation could greatly increase Ukraine’s energy independence and may be considered a matter of National Security and Defense.

Industrial Hemp also has great potential in Ukraine as a replacement for many plastic products.??Plastic products made with Industrial Hemp are biodegradable and fit well with Ukraine’s already enacted laws for the reduction of plastic bags and packaging.??Paper production, clothing\fibers, animal feed and many other products can be produced from Industrial Hemp but will need FDI in order to succeed.

Additional applications for the use of Industrial Hemp VAAP would need to be determined by the Government of Ukraine so it could attract FDI for end processors who would establish operations within the country.??A clear strategy for VAAP is necessary along with targeted agricultural lands for cultivation.??Potential country-wide yields and targets would also be necessary in order to attract FDI.

Ukraine has the potential to be the top producer of Industrial Hemp in Europe.??While Industrial Hemp has potential as a BAC, the greatest amount of revenue potential are VAAP.??VAAP operations will create more employment and bring greater returns directly to Ukraine.??Assistance for developing this market is attainable from NGO’s, United Nations funding and other international financial institutions as well as private investors.

V.?????????????Foreign and Domestic Homestead Incentive

How to incentivize young people to stay or new young people to come???One of the ways may be to attract foreigners to abandoned rural properties in Ukraine.??This could be a very controversial topic in Ukraine.??But, once the state\regional\local governments start offering this kind of program and local young Ukrainians see young people from the West doing it; inevitably they will see merit in the program and/or take pride in their homeland.??How would it work???

A.????Foreign Homestead Incentive (FHI)

Italy for the past few years has been offering homes to foreigners for $1 in exchange for an agreement on behalf of the buyer to fix up the property within three years of the purchase.??This program has been taking place in rural areas and now both France and Spain are developing similar programs(See?https://dispatcheseurope.com/expat-essentials-1-euro-deals-on-homes-are-attracting-people-back-to-europes-abandoned-villages/?).??Ukraine would probably not do well to mimic its EU neighbors because there is less incentives for people to move to the country at present.??Ukraine could develop a different kind of incentive that would attract young Westerners to rural villages.??This would be focused on rural development and other priorities of the government of Ukraine.

The Eco and Organic movements in the West are much more pronounced than they are in Ukraine.??Belarus has developed itself as an Agritourism destination and in 2015 was voted as the Second Best Agritourism Destination by National Geographic (See?https://baltic-review.com/belarus-second-best-agritourism-destination/?).??Ukraine, the “Breadbasket of Europe” is not even listed as a contender.??Many young people in the West would be very interested in having a homestead in Ukraine if given the proper infrastructure and incentives because the cost of doing so in the West is simply out of their reach.??This movement is most popular among the Millennial Generation (Born 1981-1996) (See?https://www.headstuff.org/topical/homesteading-land-movements/?).??Limitations and criteria would have to be set so both FHI recipients and the government benefit from the program.??Oversight would be best at the regional\local level while administration might best be served at the national level.?

The controversy that would be expected in Ukraine will be due to the current Agricultural Land Reform is tied to giving or selling small Homesteads to foreigners.??A Homestead is usually 1-3 acres.??Giving away land is a major issue.??The Ukraine FHI would need to be targeted to attract very specific demographics in order to be effective.??An FHI would have to give something away and get something in return.??What could Ukraine gain from an FHI????????????

1.?????English Language Training in Rural/Urban Areas?

2.?????Western Market-Based approaches to Small Agriculture

3.?????Western Expertise in Rural/Urban Areas

4.?????Increased Ecotourism and Agritourism

5.?????Repopulation of crucial areas

6.?????Incentives for Young Ukrainians to Stay

English Language Training in Rural Areas

Oleksiy Danilov, Secretary of the National Security and Defense Council of Ukraine has stated that English as Second Language should be a part of Ukraine’s national security strategy and laments the lack of fluent English speakers in the country.??Secretary Danilov has stated that English should be taught from kindergarten through the end of secondary school.??This strategy is effective only if there are trained and fluent English language teachers available.??In fact, an FHI program could also be offered in urban areas with the right programs and incentives.??

A component of any Rural or Urban FHI would be the recruitment of Native and Highly Fluent English speakers who complete training in Teaching English as a Second Language or have a Teaching Degree from their home country.??Ukraine does not have the budget to compensate them but it does have abandoned houses in rural areas as well as possibly underutilized housing on the edges of urban centers.??

A Ukrainian FHI would recruit those who have these skills as one of its components.???Those recruited for this objective would also have a hand in developing a curriculum for rural and urban areas.??Placement of these FHI teachers would be determined by national\local\regional bodies.??Further details on targeted demographics will be explained in the Section: FHI Recruitment Objectives.

Western Market-Based Approaches to Rural/Urban Agriculture

Western agriculture in urban and rural areas on a small-scale has been developing for a number of years based on Farm-to-Table approaches.??This is usually accomplished through various retail distribution channels to include Farmer’s Markets and Community Supported Agriculture (CSA), please see?https://communitysupportedagriculture.org.uk/what-is-csa/.

New start-ups in Ukraine like OVO (https://ovo.ua?) could greatly facilitate small farms getting their produce directly to consumers in even more efficient ways that are being accomplished in the West.??A model like OVO would give farmers time to focus on their agricultural operations versus time spent on Farmer’s Markets.??CSA’s are very popular in the US, Canada and are growing in popularity throughout the United Kingdom and the EU.

Market Gardening (https://marketbusinessnews.com/financial-glossary/market-garden/) is a major component of the CSA movement is usually based on small farm homesteads of 1-10 acres within a reasonable distance from urban areas.??Almost all Market Gardens are organic.??Businesses like OVO could easily take advantage of these types of operations by adding Certified Organic products to its delivery service.??This could give Market Gardens access to more customers at a further distance with the right infrastructure, transportation and logistics.??FHI recruits to certain areas would be required to start these types of operations in return for providing assistance to others in their area.??Thus, they would also be training informally in English as it is expected that most FHI will not be fluent in Ukrainian or Russian.??Extensive videos and training on Market Gardening can be found at (https://www.themarketgardener.com).

Urban Farming in the West is also taking a foothold and is usually based within or just on the edges of cities (See?https://www.greensgrow.org/urban-farm/what-is-urban-farming/).??Those FHI recruits who may be needed for teaching English as a Second Language in urban areas can participate in this type of operation.??OVO and companies like it would benefit from Urban Farming operations close to their end customers.??Most Urban Farms are also organic and use Farmer’s Markets and CSA to generate revenue.??Curtis Stone of Canada offers books, training and free videos on Urban Farming (See?https://theurbanfarmer.co/about-curtis/).??See also?https://riskcenter.wharton.upenn.edu/studentclimaterisksolutions/scaling-up-urban-agriculture-2/

Western Expertise in Rural\Urban Areas

English language and Market Based Approaches to Small Agriculture are tangible results that will be achieved through an FHI.??Intangible benefits cannot necessarily be measured but may have an even larger effect on the communities where FHI recruits are placed.??Westerners will inevitably have an effect on the people and businesses where they live.??Well chosen FHI recruits will contribute to their local economy and will most likely be willing assist others in their community to grow and prosper.??The psychology being that most FHI recruits will be grateful for the opportunity to do something they want (Teaching, Agriculture) and receive land or housing.??Gratitude usually results in an increased willingness to assist others.

FHI recruits will be expected to have a fairly diverse background which may lead to new ideas, practices and approaches in multiple disciplines.??These will become more apparent with time and proper nurturing with the Ukraine government bodies that are overseeing FHI programs in their regions, cities and villages.

Additionally, the FHI program should also have a positive psychological impact on young Ukrainians. The human condition is natural to be curious and\or want what someone else has.??FHI could easily expanded to young Ukrainians who express an interest but do not have the financial resources to purchase\lease land.??Another significant intangible is that FHI economic activity will require support services as it grows (delivery, food-produce storage, food processing, agricultural equipment and others).??Westerners will also be inclined to add Eco and Agritourism to their operations which will increase tourism infrastructure in rural areas.??Numbers 4, 5 and 6 listed above are considered to be intangible benefits of an FHI program.??All intangibles cannot be measured as they will occur naturally and progressively.

FHI Recruitment Criteria

If Ukraine decides to enact an FHI program, then a very specific criteria for recruitment should be a part of it.??FHI recruits should have education, practical experience and/or professional experience in the areas they will apply for.??This ensures that Ukraine attracts the right candidates. Criteria should meet local\regional\national needs.??Below is some suggested criteria.

1.?????FHI should be offered to teams of two or more with one member having remote based income in order to meet the basic needs of the FHI team.

2.?????Married Couples or Couples.??A relationship of at least 3 years should be essential criteria and couples with young children should be encouraged to apply.??This cycles school-age children into the Ukrainian system which benefits other children in the school system who are trying to learn English.

3.?????FHI Teams.??Those individuals who are not couples could be recruited as teams.??FHI Teams would have to apply together and have a previous academic, personal or professional relationship.??A legal framework for shares in the granted FHI property will need to be developed and signed in advance to protect Ukraine and other members of the FHI Team in case one of them is lost or quits.??At least one member of the team will also need to have remote income.

4.?????Agricultural and/or Teaching English as a Second Language education, training or practical experience.??One member of the couple or team who is not employed remotely should have at least one of the above.

5.?????Funds for One Year and Basic Start-up Costs.??FHI Couples or Teams should demonstrate that they have enough funds for living expenses for one year or show income reports for those who work remotely that will support the whole team.??They should also have enough funds for the basic equipment to get started primarily relative to agricultural operations.

6.?????Age Demographic? – This is a sensitive subject but should be taken into consideration.??The suggested age range is 25-55 years old.??25 year-olds should be mature enough to take on the challenges.??Every age in between 25-55 translates to more education, training and experience.??55 year-olds are considered because they are usually health and strong enough to be productive and they often have the added advantage of have enough financial resources to last for years.??Many at this age range would like to retire from former careers and try something new while they still have the energy and stamina.

The above criteria are just a foundation or set of ideas to knock down or build upon.??Ukraine would have to determine for itself what best serves its needs.

FHI Critical Infrastructure and Basic Needs

Ukraine will need to have certain requirements in place to support an FHI program in order for the program to be successful.??Certain standards and services will need to be in place before any FHI initiative can be launched.??The Ukraine FHI requires some things from state in order to succeed.??The costs for these needs are nominal in scope and primarily suggested to ease the financial burden on potential FHI Recruits while also assisting them with generating their own income in Ukraine.

Some basic criteria are listed below.

1.?????High-Speed Internet is essential for the FHI recruits since those working remotely cannot do so without it.??Additionally, Westerners who engage in any type of business activities will need good quality Internet connections to develop websites and promote their business.??This will most likely not be difficult in urban areas but could be a major issue in rural areas.??

2.?????Electricity that is consistent will also be a major requirement.??Many areas in Ukraine report regular electrical outages.??This is tied to the need for good Internet especially for those who work remotely.??At a minimum, FHI Homesteads should be supplied with backup generators so they can operate during electrical outages.

3.?????Water resources are a key component to successful Market Garden and Urban Farming operations.?FHI Homesteads will need guaranteed access to safe and clean water for crops.

4.?????Transportation and Logistics are also necessary components of successful operations.??Some sort of plan for vehicle-sharing or services will be necessary for FHI Homesteads to succeed.

5.?????FHI Homesteads buildings must be at least minimally habitable prior to being allotted to FHI recruits.??Some repairs to properties will be expected by FHI recruits.??However, they should be given every opportunity to begin operations versus focusing on repairing dilapidated structures.

The development of an FHI in Ukraine would create many benefits for the country but will inevitably also create resistance and controversy from citizens.??The program could be tested on a small scale first if kept confidential.??The size and scope of the entire program need not be large and should actually be limited.?Ukraine’s national\regional\local government will know its needs and would be able to make the necessary determinations should this program be considered.???

A suggestion for an FHI program is a minimum of 3 years and a maximum of 5 years for FHI recruits\teams\couples to work the land before ownership is transferred to them.?

VI.????????????Conclusion

Ukraine’s agricultural land has often been touted for providing future Economic Security.??The country’s long history of being exploited for its agriculture is well documented.??Thus, Ukraine’s agricultural land should also be included as a matter of National Security and Defense.??Agricultural Land then becomes a matter of diplomacy.??Diplomacy always requires well-calculated and strategic compromise.??Ukraine’s present economic situation may cause it not to look forward enough.??Food security is an increasing international issue.??Ukraine is in the unique position to be an economic powerhouse in the future due to its massive agricultural resources and some of the richest soils in the world.??In order to prepare itself, it will need to start taking action now.

First, the Agricultural Land Reform in Ukraine is currently underway and should be carefully reassessed so as to protect National and Economic Security.??This coupled with a decrease in corruption and transparent business practices with a “Rule of Law” framework must continue to be pursued.

Second, the potential for the greatest return is in Value Added Agricultural Products (VAAP).??However, in order to accomplish the necessary investment for VAAP production and distribution, Ukraine will need to make certain compromises.??Foreign Direct Investment (FDI) is Ukraine’s best strategy to pursue VAAP development.??For the first reason, Ukraine would have to develop new internationally recognized brands for export markets.??The amount of capital needed for marketing, packaging and the development for new brands is excessive.??Encouraging FDI from well-established international brands and allowing a certain percentage of repatriation of profits benefits Ukraine and investors.????Care should be taken to only allow some repatriation from VAAP FDI and not from direct ownership or control of agricultural lands that produce VAAP or Bulk Agricultural Products (BAC).??A policy like this protects Ukraine and its farmers.

Third, Industrial Hemp production in Ukraine is too heavily regulated while it is suspected that the potential benefits have not been fully explored.??Industrial Hemp can be instrumental in Ukraine’s National and Economic Security policy for becoming energy independent.??Cultivation on less productive agricultural lands and as cover crops on others could increase the crop exponentially.??Industrial Hemp VAAP for export could also increase FDI and generate more revenue within Ukraine..

Fourth, Ukraine already exports about 80% of its honey to foreign markets.??A good portion of this is Organic Honey.??Market demand throughout the developed world for organic products continues to rise annually.??The development of support industries for the organic market such as Integro-SD (https://en.integro.co.ua) are already underway and can be instrumental in the development of organic VAAP.

Finally, outside foreign expertise is needed for large-scale agricultural enterprises but is even more for Small and Medium Enterprises (SME’s).??SME’s are the backbone of Ukrainian agriculture and have been for over a thousand years.??However, most of the foreign expertise provided to Ukraine so far has been in the form of studies and assistance from foreign governments and NGO’s.??While important, this type of assistance is rarely hands-on enough to have a major effect.??A Foreign Homestead Initiative (FHI) could assist Ukraine in direct help to SME’s while also developing market-based rural\urban agricultural development