Oakland raises concerns about foreign investment in Ukrainian agri

The independent policy think tank has produced a report entitled ‘The corporate takeover of Ukrainian agriculture’ which examines investments into the sector since 2010.

A recent report by the Oakland Institute, an independent policy think tank, has raised “serious questions” about the direction of Ukraine’s economic and agricultural future, according to Frédéric Mousseau, policy director at the institute.

Despite a moratorium on land sales in Ukraine since 2004, at least 1.6 million hectares of agricultural land is owned by foreigners and 10 large agribusinesses control as much as 2.8 million hectares, according to the report.

Amid concern about the impact of this foreign control over much of the country’s agri sector, Oakland Institute has examined investments into Ukraine’s agriculture sector made by agribusinesses including Cargill, DuPont and Monsanto since 2010.

The report follows earlier research by Oakland into the role of international financial institutions in deregulating the country’s agri sector in the wake of the Ukrainian crisis – Walking on the West Side: the World Bank and the IMF in the Ukraine Conflict – and was published a few days after cabinet appointments were given to foreign-born individuals who were offered Ukrainian citizenship hours before their appointments, according to BBC reports.

“We must ask ourselves: what impact will these investments have on the 7 million local farmers, especially with the expected lifting of the moratorium on land sales in 2016?” said Mousseau in a statement. “And how will these deals affect Ukraine’s ability to control its own food supply and manage its economy in a way that will benefit the Ukrainian people?”

Agriculture accounts for eight percent of Ukraine’s GDP and 17 percent of its employment. The country is the third and fifth largest global exporter of corn and wheat respectively. As one of the fastest-growing agriculture markets globally, according to American chemical company DuPont, its unsurprising that big businesses want to invest, reads the report.

Foreign investments in agriculture in Ukraine

Company Country Land area (ha)
Trigon Agri Denmark 52,679
Saudi Arabian consortium inc Public Investment Fund Saudi Arabia 33,000
Renaissance Group Russian Federation 250,000
MK Group Serbia 50,000
Glencore Xstrata Switzerland 80,000
Sintal Agriculture Cyprus 146,800
Agrokultura AB Sweden 68,700
AgroGeneration France 120,000
Kernel Holding Luxembourg 405,000
MCB Agricole Austria 96,000
Mriya Agro Holding Cyprus 298,000
Total   1,600,179

Source: Land Matrix – May 2014

The report details Ukraine’s history of collectivisation and ways in which some agribusinesses have circumvented the moratorium on land investment, which is due to stay in effect until 2016.

Read: The corporate takeover of Ukrainian agriculture