russia & ukrainerussia & ukraine by: regina fayyer & nupur modi

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By: Regina Fayyer & Nupur ModiRUSSIA


There was a substantial food price crisis Large state farms had to deal with the sudden loss of heavy government subsidies Livestock inventories declined, pulling down demand for feed grains Area planted to grains dropped by 25% in less than five years The use of mineral fertilizer and other costly inputs plummeted, driving yields downward. After ten years of decline, Russian and Ukrainian agriculture began to show signs of improvement.

HISTORY Brief OverviewLargest republic of the Soviet UnionAttained independence in 1991Capital: MoscowDecline in agriculture in 1990s Economy worsened, food shortages and crime rate became a problem.Recovery in 2000Regional Distribution: 9 Major Regions Central European Region; North and Northwest European Region; Volga Region; North Caucasus; Ural Region; Western Siberia; Eastern Siberia; Northern and Northwestern Siberia; and the Russian Far East.


Agriculture & Main CropsGrains (most important) Occupies more than 50%Wheat is dominant First major grainBarley Second major grainCorn, sunflower seed, legumes, potatoes, production of vodka, beets, flax, cabbages, apples, tomatoes, carrots, meat, milk; rich in mineral resources.


ImportsTop three important partners: Germany, Ukraine RussiaMachineryVehiclesElectric & Electronic EquipmentPharmaceutical ProductsSemi finished Metal ProductsConsumer GoodsMeatSugar$260.4 billionRUSSIA

ExportsExport Partners: Europe, North America, Japan, Cuba, etc.Leading producer in diamonds, nickel, platinum, oil, and gasPetroleum and petroleum productsWood and wood productsMetalsChemicalsWide variety of civilian and military manufacturers$365 billion


Illicit DrugsCultivator of:CannabisOpium PoppyMostly for domestic consumption


Industries & Industrial ProductionGrowth Rate 21%Mining and extractive industries producing coal, oil, gas, chemicals, and metals.All forms of machine building from rolling mills to high performance aircraft and space vehiclesShip building; road and rail transportation equipment; communications equipment; agricultural machinery, tractors, and construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables.


Agricultural Enterprises & Private FarmsState and collective farms dominate production of most agricultural commodities, including about 85% of grains and over 75% of sunflower seed.Agricultural enterprises tend to be big - Average size of nearly 5,000 hectares (12,500 acres) - Larger in the spring wheat region than in European Russia. Private Farms tend to be much smaller - Average size of about 50 hectares (125 acres) - Account for a growing percentage of Russias commodity productionRUSSIA

Conflicts & Difficulties Climatic and geographic factors Limit agricultural activity to about 10% of the countrys total land areaPerish of crops due to weather related reasons:Severe frost damageIce crust or unusually persistent snow coverHeavingSoakingShortage of agricultural machinery In poor condition and machinery is deteriorating faster than it is being replacedRUSSIAFood Insecurity in Russia Linked to diets Children: Low rates of breast feeding, possible deficiencies in weaning practices, lack of Vitamin C and iron deficiencies. Adults: High fat, high cholesterol, low fiber diet Low consumption of fruits and vegetables; high consumption of dairy, meat, and sugar, and higher than recommended alcohol consumption. 5% of population considered to be undernourished per FAO The Russian Government can greatly reduce health risks in the country by promoting healthy diets and a healthy lifestyle, and by educating health professionals, teachers, and children in principles of a healthy diet.

RUSSIAAgri-Food Trading Relationship between Russia & United States

Benefits include: Greater opportunity for all WTO countries Farmers, manufacturers, and service exporters will gain new, meaningful market access to Russian markets. Tariffs and non-tariff barriers to tradeOperating according to international rules of trade or be subject to action by the WTO dispute settlement process.Poultry, Pork, and Beef Agreement - Both American farmers and Russian consumers win. RUSSIATransnational's 2 Main Agricultural Companies:Monsanto 2 locations Producer of leading seed brands in large-acre crops like corn, cotton, and oilseeds (soybeans and canola), as well as small-acre crops like vegetablesArcher Daniels Midland Company (ADM) - Processes oilseeds, corn, wheat, cocoa beans, oats, barley, and peanuts.


HistoryAttained independence in 1991Decline in agriculture through 1990sRecovery in 2000Agricultural sector produces 12.8% GDP* Employs a fifth of the population* One of the most important sectors of economy

CapitalAgricultural SectorMain crops are cereals, sunflower seeds, and sugar5th largest exporter of cereals in the worldMineral resources are iron, magnesium, and coalLivestock farming includes cattle, pigs, sheep, horsesOrganic agriculture developed in mid 1970s28% population employed in agriculture sector

Organic AgricultureDr. M. SchykulaProtective soil preparation system: increasing biological soil activityFarm named Orbij in the Poltawa regionUkrainian Swiss project Development of organic agricultureCertification, production, and marketing of organic productsBook: Soil Protecting Organic Farming in UkraineExport oriented organic farms developed in Europe

Development of organic Farms

Regional distribution Primarily in South Ukraine: Odesa and KhersonCentral Ukraine: PoltavaWestern Ukraine: Ternopil and LvivConditions are favorable to organic farmingLarge vegetable production Animal production is less importantFocus lies on export products: hard wheat, sunflower, buckwheat

Regional distribution depends on soil quality and climate factors. Dozens of farms have been converted primarily in South Ukraine, Central Ukraine, and Western Ukraine. All these farms are located in regions with favorable conditions. 20Ukranian MarketUndevelopedDomestic market lacks activityOrganic farming is fully export oriented (EU)Concentrated in a few agro-investment corporationsSmall scale production through farmers marketsNo organic grocery stores present

In Ukraine, the domestic market for organic products is still undeveloped. At present, organic farming is fully export oriented and is sustained by large scale production of organic grain for export to EU countries. It is concentrated in the hands of a few agro investment companies. The small scale organic farmers have been marketing their products mostly through conventional farmers markets. There are no organic food shops present in Ukraine. 21Marketing ProduceDirect sale off the fieldPrinted periodical publicationsTV, newspapers, and magazinesBut, farmers lack:Information on sales marketsTransportation of produceHigh purchasing pricesGood quality of produced goods

International TradeGDP is 115%Main export partners are Russia, Turkey, and ItalyCommodities are iron, steel, mineral fuels, oils, nuclear reactors, boilers, machinery, machine tools, cerealsRussia is a major supplier of oil and gas to Ukraine

Ukraine encourages foreign trade and investment. The share of foreign trade in countrys GDP has reached nearly 115%. The top three export partners are Russia, Turkey, and Italy. The commodities mainly are see slide. 23Problems with farmingIndustrialization caused land degradation Low technology caused use of old machines with low productivityNo recyclingIrrational use of landSoil erosion during tillage

1.Due to industrialization, the use of chemicals and pesticides increased. This caused land degradation. 2.Many farms do not have enough money to buy new techniques. Therefore, they have to use old machines which cause pollution in the environment and lead to low productivity.3.Farms through out a lot of different things, which can be used in other farms. So, there is no system of recycling.4. Irrational use of land has been created due to an incorrect distribution of farms. Some households use areas which are greater than 2 hectares and their owners use areas of only 1 hectare, so the other part of the land is not in use.

24Food Price CrisesCost of staple items such as bread, eggs, and vegetables increased 20 to 70%Government responds by restricting grain exportsReduces local supply higher pricesPrivate investors buy and develop Ukrainian landPoor receive reduced incomes poverty increases However, a sustained economy led to decrease in poverty: 32$ in 2001 to 8% in 2005

Private investors are buying and developing ukrainian land in order to feed the world and support ukraines domestic economy. 25U.S. and Ukraine : USUFNon-profit + non-governmental organizationFacilitates democratic developmentEncourages free marketEnhances human rights in UkrainePromotes business and economic development in Ukraine and the West

Transnationals in UkraineMonsanto In 1997, imported GM bt potatoes Field trials went on for ~ 2 yearsUkrainian media picked up stories on GM foods from UKMinister of health refused transgenic potato consumption for humansMonsanto exploited the lack of biosafety rules in Ukraine b/c destroying GM potatoes led to an environmental impactNo recourse to compensation

Environmental impact - Monsanto's Bt potato also contains a kanamycin antibiotic resistance gene as a marker, which through horizontal gene transfer, could confer antibiotic resistance to soil bacte