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Business / Real estate

"Borscheva set" value-added

The prospects for the fruit and vegetable industry in Ukraine were discussed by the participants of the conference "the Profitable supply chain for fresh fruits and vegetables", held recently in Odessa. The event was held by Ukrainian project business development horticulture (UHBDP) and the IFC Project "Agrarian receipts in Ukraine." The participants were farmers, processors and representatives of wholesale companies, primarily representing the black sea region. They exchanged experience and discussed possibilities of involving in the sector to additional financial and material resources with the new tool lending – agricultural receipts.

the conference Venue was not chosen by chance: the southern region of our country especially actively focused on the production of vegetables and fruits. This year here has really been able to get good yields. However, at high levels, farmers were faced with the aggravated problems of the industry, which are directly related to processing and marketing of finished products. And most importantly, many of them still are unable to answer the question of how to make your own business consistently profitable and less risky, which does not depend solely on the characteristics of the weather.

Today we are talking about fundamental reform of the mainly raw materials industry in the production of added value. As noted by the conference participants, this suggests its broad infrastructure support and implementation of effective business models, as well as modern approaches to raising funds.

this, in particular, stressed the expert of the IFC Project "Agrarian receipts in Ukraine," Sergei Potapov. He recalled that there are two principled approach to the production and sale of fruits and vegetables. In the first case, the raw material is sold directly from the field, but the second approach is more promising and involves the preparation of the final product. The latter is created in packing houses or in places where there are special conditions.

"Today's consumers pay for quality, they consider their money. And less want on the balcony to grow onions or to keep under the bed of potatoes. Stocks began to make less and supermarkets to walk more often," he said.

more recently, in Ukraine there is a positive infrastructural developments. The market already has companies focused on the delivery of the final product. Not only domestic consumers but also foreign.

On his business model during a conference said the company "green team" of the Kherson region. Core culture is the bow. But also grown here are carrots, pumpkin, different varieties of cabbage, garlic. And recently tried to do a sweet potato - a sweet potato under him in his farm took 60 hectares. While this culture is still not getting such crops, as in Portugal or South America, but hope to catch up to them for 3-5 years.

"Our business model is to combine its own growing and partnership with farmers, - said the commercial Director of the company Dmitry Cherevatov. In the season 2017/2018 years we have had 30% of its vegetable production, and 70% was brought in from outside".

In his opinion, such a model is promising. Although there are certain disadvantages. Suppliers often seek to quickly get money and not think about the long-term cooperation.

"Farmers say to us: bring your people, collect everything and get everything" - said Dmitry Cherevatov. Such farmers today can grow vegetables and to switch to soy or another culture, which is considered more favorable at the moment. But big business wants to deal with serious partners.

"We plan to increase volume growth. But in order to scale, you need to search for reliable partners. We want to further grow to us half the volume of production", - said the commercial Director of company "green team".

a Similar approach to business demonstrated by the company "Kalynivka-Premium" from the Kiev region. It has been working for 20 years, growing vegetables - both on open ground and in greenhouses. And also engaged in the purchase and resale of the products involved.

the General Director of the company Maria Antonova believes that the farmer should focus on the cultivation of any particular culture and "to be a Pro in monoculture". This will reduce the production cycle, that means a lot for the agricultural producer in an increasingly competitive environment.

"Production cost should not exceed 6 cents per kilogram of production. To date, the majority of farmers this indicator more than twice," she said.

On the monoculture focused and "Allopatric" from the Odessa region. Preference she gave the garlic.

"Seeing what is on the market, took into account several factors, said its General Director Natalia Sudarkina. – First of all, this culture should be well stored. Therefore, from strawberries, which involved our neighbors, immediately refused. Secondly, the products must be export oriented and well in demand on the domestic market."

the company is Now independently growing garlic on your own 100 hectares and the same with farmers. Moreover, these affiliate farms are not only in the Odessa region, but also in other areas.

In 2018, "Agropetrol" completed the construction of Ukraine's first warehouse for storing garlic. It holds up to 1 thousand tons of products. This approach allows the company to offer it to market immediately after harvest when prices are especially low, and when the price increases.

the opinion of the conference participants, business models, focused on the creation of modern infrastructure facilities and skilled use of their capabilities, provide them with high profitability. For example, in "Kalinovka-Premium" they say that they do not lose, but earn a low price.

"We decided that if the price will fall, we will be buying cheap products, send it for processing and at the time of growth will be selling it at a favorable price," - said Maria Antonova.

Ukrainian fruits and vegetables has recently become increasingly popular not only in domestic market but also in foreign. The participants of the conference confirm this. According to information announced on her today, looking for possible supply of onion, carrot, cabbage in Ukraine are coming in large numbers buyers from a number of European countries where these crops this year was lean. In addition to the other Ukrainian fruit and vegetable products there is a considerable demand abroad.

Although to get there it is often not easy. In particular, in Europe, impose high requirements on quality and security. Because the success of the business, which got Global GAP certificate.

Among those who cared for him, company "Agropetrol".

"Certificate of need to the manufacturer, - said Natalia Sudarkina. – When we participate in exhibitions, international conferences, we are approached by foreign partners. And the first question they ask - do we have certification? Without this move impossible, and export closed to you. Another certification allows to produce safe products, safe people work and care about the environment".

most of the companies that during the conference sharing success stories of work, was able to organize the business and to support investors. For farmers, such assistance is an important key to a successful development. Today, the government and our foreign partners, appreciating the prospects of the domestic agricultural sector, provide various assistance to farmers. In our country are several wholesale markets of agricultural products. And the conference was held in Odessa just on the basis of one of them – the market "Ear".

This market is not the only place where buy and sell agricultural products, but also an information platform for farmers. Here they advise on issues of business, entering new markets, establishing business contacts, independent funding of their projects. On the basis of market for farmers often conduct training.

the Director of the market "Ear" Alexander Voropayev said that they get a lot of help from its partners, in particular, from projects UHBDP, IFC, USAID. Now interact closely with representatives of the European Bank for reconstruction and development and believe that will also be able to implement them in new projects.

"UHBDP work in 2015, he said. - In the past year been able to jointly implement a program designed for small producers. We gave the farmers two days – Saturday and Sunday – for free trade.

The cost of retail space is fully covered the Project UHBDP. It is the peak days when the market could be insufficient trading places".

the Participants were 30 farmers. According to the data obtained from them, they sold in the market 340 litres of honey, about 60 tons of fresh vegetables and fruits. Total revenues amounted to 669 thousand UAH.

great help to the farmers and render the IFC Project "Agrarian receipts in Ukraine", which deals with the introduction into our country of this new financial instrument. This year, agricultural receipts are widely used by small and medium-sized agricultural producers all over Ukraine. And if earlier they were mainly used by producers of grains and oilseeds, but recently one of them joined, and those farmers engaged in niche and horticultural crops. Through agrarian receipts, farmers have the necessary resources to growing potatoes, apples, garlic, carrots, sugar beet, buckwheat, raspberry, blueberry, watermelon, mustard and other crops.

this year, with agricultural receipts began to work and "Allopatric".

"Is a simplified model of lending under the pledge of the harvest, - said Natalia Sudarkina. - We have issued two agricultural receipts. In September, when planting garlic, we are ready to consider this kind of cooperation with farmers who have 5 to 10 hectares of land. We give them seeds under the 30% payment, 70% of their value they return next year harvest. This model gives all stakeholders an understanding of who has what responsibility."

According to the participants of the conference, through this approach, agricultural receipts are especially important for the produce industry. New tool lending, which is notarized and entered in the national Register of agricultural receipts, disciplinary market participants, helps to plan joint work and to develop their own business. The participants of the conference who are already working with agricultural receipts, emphasized that it is very flexible in use tool, which takes into account the interests of lenders and borrowers. It is simple to design – this procedure takes a matter of days. It is no accident demand in Ukraine is constantly growing.

thus, according to the IFC Project "Agrarian receipts in Ukraine", as of December 4, all already issued 752 agricultural receipts. Thanks to them, agriculture has attracted more than 4.7 billion hryvnia.

"In the southern regions of Ukraine financing of agriculture more risky due to climatic conditions, - said the head of the IFC Project Helen Fairlamb. – This is strongly affected fruit and vegetable industry. Mostly credited export-oriented culture, for example, grains – they are pegged to the dollar, and therefore prices are predictable. Vegetable crops are mostly tied to the domestic market, and lenders are in no hurry to invest in this segment. Agricultural receipts provide the necessary resources to producers, providing them with the successful operation and profitability. The same benefit and creditors".

Nikolai LUGOVOI,

national press club "Ukrainian perspective"