Benefits of organic land investment in Ukraine

Agricultural land investment in Ukraine continues to attract farmers and real estate dealers from around the world. Large local Ukrainian companies have also made a diversification move by investing into agricultural lands –Ukraine’s famous Chernozems (Ukrainian for black soil) the most fertile soil type on our planet. But only few land investors are able to realize the true potential of Ukraine’s fertile soil which can produce 5-7 metric tonnes of wheat per hectare without any use of chemical fertilizers, pesticides or herbicides. The natural benefits of organic farming technologies in Ukraine are tremendous but the largest agricultural companies seem to fail in realizing the potential.

Only about 300 thousand hectares of agricultural lands in Ukraine have been certified under the EU’s “Organic Farming” standards. Organic farming success stories in Ukraine are still only developing. At the same time, many old farms in Ukraine simply lack financing to buy agricultural chemicals which puts them into the organic category but cannot grant an official status of an organic producer. Investing in the organic certification process for many farmers is just as costly as buying new equipment.

As the Ukrainian government has still not been very helpful in bringing its large number of organic farms up to international standards, private investors begin to establish joint ventures with Ukrainian farmers through financing organic certification for them and trading the healthier organic food at 25-30% premium prices.

The economic benefits of organic crops farming worldwide have been well known. The cost of organic production according to numerous studies in Europe and US is 20 to 50% lower than the cost of conventional (chemical) crops production. In case of Ukraine, the cost of cultivation using organic technologies can be as low as USD 150 per hectare, only half of the conventional farming const due to elimination of the chemical fertilizers, toxic pesticides and herbicides.

As the price of petroleum continues to rise, the cost of conventional chemical farming will soar in the coming years. That is when Ukraine’s fertile Chernozem will realize its full potential ensuring organic farmers’ zero dependency on petroleum-based agricultural chemicals.

The long-term ecological benefit of organic farming is even more fundamental but only few governments in the world have committed to organic farming as national standard in agriculture. As benefits of organic land investment in Ukraine continue to unfold with new success stories emerging in the coming years, Ukrainian government might as well realize that by supporting organic farmers in the country it will save billions on fighting ecological disasters and complying with the Kyoto Accord.

Read more on investing in agricultural land in Ukraine on InvestUkraine

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