The European scenario envisages subsidizing farmers, but in Ukraine a very large percentage of people are involved in this area, so it is financially impossible. The American development scenario envisages an increase of production efficiency, and it is the most acceptable way for Ukrainian farmers and the state. Why this is so the UAC Deputy Chairman Mykhailo Sokolov told more detailed in a comment to UNN.

“The first model is development through subsidies, when the goal is not to solve economic problems, but to solve social problems. The best example of such a development is the European Union, there are many small farmers, but this system exists through huge government subsidies. In general, such a state subsidies level in Ukraine is physically impossible, because our agricultural sector is too big, and we just cannot afford such subsidies,” he explains.

Therefore, the best-case agricultural development scenario is the American model, where the state invests in the development of the farmer, giving them access to technology and everything they need to increase their productivity.

"The second approach is when agriculture with the help of production efficiency increase. The best example is the United States. Then we understand what we should use to be good competitors: these are new technologies, scale economy. This is robotics, wide-reaching technique, control of combines through satellites and so on. That is all capital-intensive technologies which reduce a share of manual work in agriculture sector," Mykhailo Sokolov explained.

This scenario gives protection to a small farmer and a chance to "grow" into a medium, and then - to unite in cooperatives and provide quality products for export.

"Our task is with the support of a small farmer to turn it into a medium-sized farmer who can compete and unite in cooperatives. Because if they remain small, their international competition will improve. And we will not be able to help them, because we will not have any money to help them with state support at a level comparable to the EU," he said.

Monday, 22 February 2021

 

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