Thanks to cooperation, agricultural producers have an opportunity to increase their income. This is facilitated by the joint purchase of mineral fertilizers, fuel, plant protective products, machinery, as well as the sale of cereals by members of the cooperative.
Oleksandr Buiukli has been the executive director of the First Ukrainian Agricultural Cooperative since its foundation in 2016. Today, the cooperative includes 75 farms, whose land plots are located in 12 regions and their total amount is about 200 thousand hectares. The head of the cooperative spoke about the results of the 2021 harvest, preparations for the autumn sowing campaign and production plans.
The harvest has been over. Did the weather allow them to be completed in time?
- From the peculiarities of this year's harvest it can be noted that barley, wheat and rapeseed had to be harvested almost at the same time. First of all, it happened due to weather conditions. As usual, we harvest rapeseed and barley first of all, and then wheat. As a result of the rains, there was also a lot of weed in the fields this season. This year's storms were all over the territory of Ukraine, so wheat was destroyed in some areas. All these factors somewhat delayed the harvest process. However, the yield of these crops was higher than last year.
Did the late harvest affect the quality of the grain? Which type of wheat was more – feed wheat or food-grade wheat?
- More food-grade wheat was produced, and due to abnormal rainfall, there were fungal diseases of cereals in some regions. Also, this season there are problems with low quality of grain.
Did the cooperative have enough fuel during the harvest and was it satisfied with the price?
- Due to the fact that in the south of Ukraine the supply of fuel during the harvest increased, the members of the cooperative managed to keep a balance on fuel costs. This is connected with the fact that the south of Ukraine has outlet to the sea, and therefore the ability to transport fuel by tanker, ie in large quantities. Due to fuel supplies to ports, there was no shortage. Prices are falling now, partly due to the pandemic situation, because petroleum has fallen in price slightly. This was a kind of "pleasant surprise" for farmers.
But I want to say that the members of our cooperative can always count on the timely delivery of quality and affordable fuel: our truck fleet has four tanker trailers. The total capacity of one - 33 thousand liters. Each of them has 8 sections with a capacity of 2 to 9 thousand liters and is equipped with a counter and a fuel nozzle. Thus, it is possible not only to transport fuel, but also to refuel equipment with simultaneous calculation of the volume of the issued fuel. This makes faster fuel delivery and can meet needs of any volume.
What yield indicators did the First Ukrainian Agricultural Cooperative receive?
- According to preliminary estimates, the yield of rapeseed is 3 tons per hectare, wheat - 5 tons per hectare, barley - 4−4.5 tons per hectare. As compared with last year, the indicators have increased. In addition, prices are better than last year. The main role was played by weather conditions, which gave an increase in yield, as well as the usage of innovative approaches. Every year we try to improve the technology of growing crops.
What can you say about the seeds: do you take it from a domestic producer or buy abroad?
- I should say that everything here depends on the region and its features. We use seeds from both domestic and foreign producers.
Are the members of the cooperative satisfied with the current grain prices? At what level prices are now?
- Prices are optimal for this year, although they have fallen slightly recently. However, thanks to foreign markets, I believe that the price of grain remains favorable for farmers.
The question is quite interesting, when and how will the harvest be sold? Because it is one thing to sell it now, and quite another - in autumn or winter.
- Of course, many farms sell grain under both forward and spot contracts, but it all depends directly on the funds’ necessity. The cooperative members have already sold about 20% of the harvest according to forward contracts, 40-50% - immediately after the harvest, and some grain will be sold after New Year. Prices in forward contracts are satisfied, it makes sense to use this financial instrument. In general, I believe that the world has entered a long period of high grain prices. The growing trend – that is for a long time, and I think it is quite good for Ukraine.
Do you have elevator facilities in the cooperative and do you plan to develop this area and why?
- Of course, we have elevator capacity in the farms of the cooperative, but still, we have a desire to move towards the port elevator. This is due to the fact that at the time of harvest prices are not always good, and it is advisable to store grain and to sell it more expensive later. We need elevators for such a maneuver, but in addition, we also want to work on other bases. Today we have our own facilities for cleaning products and its storage, which are provided by approximately 70%. However, as already mentioned, it is worth moving towards the port transshipment.
Let's talk about technology, how are the members of the cooperative provided with it?
- We feel a little excitement in the market of equipment and some of them already need to be ordered for 2022 - 2023. Due to the rise in metal prices, the price of machinery increased by 5-10%. Of course, the rise in prices was caused by an opportunity of agricultural producers to pay for it. There was also a time when due to the pandemic, factories abroad did not work, due to which, the technology was delayed. And now there is a speculative component in the technology market. In a few years, the situation on the equipment market will equalize. The members of the cooperative do not have any problems with the equipment at the moment, but we try to renew our truck fleet as much as possible.
Which way do you and your partners go: do you buy completely new modern equipment, or you try to re-equip one which was made in the Soviet Union?
- We try to keep up with modern technologies, and buy modern, high-quality equipment that meets our requirements and world standards. Talking about used equipment, it should be noted that it depends on the farm and availability of funds. However, we still prefer to purchase modern, high-quality equipment.
How do you prepare for the autumn sowing?
- We are ready for autumn sowing; we have already bought sowing material. Rapeseed has been actively sown, the weather allows it, there is enough moisture in the soil. There is one great disadvantage: fertilizer prices have risen significantly, by at least 30%, and this increase costs. The members of the cooperative are provided with all fertilizer items, but still, fertilizer prices remain consistently high.
Did you manage to buy fertilizers chipper beforehand?
- Unfortunately, no. We bought them about two months ago, but since May the general trend of rising fertilizer prices has already begun. In my opinion, no one had time to buy them cheaper, and everyone bought ones at the same price.
What are the problems of the cooperatives’ development in Ukraine?
- Under the legislation favorable for cooperation, we can increase the land bank of the cooperative from the available 200,000 hectares to 2 million hectares, ie to create a kind of "cooperative agriholding". Unfortunately, the updated legislation on cooperatives has not worked on the ground, and legal issues on the registration of cooperatives sometimes are different even in the districts of one region. Also, for the full functioning of agricultural cooperatives, it is necessary to adopt a number of amendments to the Tax Code. They are proposed by the bills № 4457 and № 4457−1, which are registered in the Verkhovna Rada but have not been adopted yet. Experts of an advisory center “Smart Country” (which was made on the based on the UAC) are currently working on these issues. I hope everything will be settled in the near future.
How exactly does your cooperative attract new members?
- The first thing that new members of the cooperative want - is safety, predictability of work. And the cooperative does everything to provide these demands. We unite small and medium-sized agricultural producers, who cannot always buy large amount of fuel, fertilizers, plant protective products on their own. And we, as an organization can do this and it gives a number of advantages. We have an opportunity to form large amounts of grain for sale, for which traders are ready to pay a higher price. Also, to buy more fuel, fertilizers and plant protective products, and as a result to get good discounts. Thus, the members of our cooperative always wins.
AgraveryThursday, 9 September 2021