Measured on a per capita basis, few countries have as much agricultural land of such quality as Ukraine, though almost half of the total area is still owned by the state.

The growing number of Ukrainians who now own titled plots of land faces policy makers with the questions of what is farm land worth in Ukraine, what rights and responsibilities do owners of farm land have and can the land be sold.

A functioning land market is vital as it ensures that land can move to more efficient operators and can fulfil its role as a source of revenue for pensioners and others in rural areas who may not have alternative sources of income.

In Western countries the fundamentals of farmland price determination are an essential part of the education of students of agricultural economics. As there was no land market in Ukraine for many decades prior to independence it is no surprise that these fundamentals are not widely understood.

This paper outlines how land markets function and how farmland values are determined in market economies. It describes the links between agricultural policy and land prices, discusses government policy with respect to farmland in Ukraine and ends with a series of recommendations.

Download PDF

Source:Institute for Economic Research and Policy Consulting – http://www.ier.kiev.ua

The outlook for agriculture has rarely, if ever, been more favorable. First, world economic growth is projected to increase at a 3.5-percent average annual ratebetween 2008 and 2017, after averaging 2.9 percent annually in 2001-07. Strong economic growth in developing countries, particularly important for growth in global food demand, is projected at 5.8 percent annually for 2008-17.

While agricultural experts agree that it’s very unlikely that prices in the marketing year 2009/10 will surpass the previous year’s benchmark, Ukraine is showing strong signs of bumper crops and an excellent harvest meaning that investment in Ukraine land is set for another good year.

According to the ‘Ukraine Grain and Feed Annual Report 2009’, last year’s bumper crop and large carryover stocks led to export sales being taken to a historic high. These exceptional export levels meant that Ukraine joined the listing of the world’s top grain exporters. Figures released by the Ukraine State Statistical Committee show that grain production in the 2008/09 marketing year experienced a massive 82% year-on-year rise.

The increase in the area of Ukraine land used for agriculture (in particular, grain and pulse crops) was also considerable (14.4% more land was farmed) while yields grew by an impressive 59.2%. Exports are expected to be slightly lower this year, but the Ukraine government estimates that the country’s grain exports will amount to around 7 million tonnes of grain, the second highest level ever and well above average. Part of the reason behind this export boom comes from favourable climatic conditions.

Last winter saw ideal weather in Ukraine for crop planting. The mostly mild conditions have led to 95% of the winter crop being classed as ‘good’ or ‘satisfactory’ by the Ukrainian Meteorological Center. The figure is the highest for the last four years and augurs well for crop yields farmed from Ukraine land during the 2009/10 marketing year. Another factor behind the record grain export levels produced by Ukraine land is the improved grain storage facilities.

Ukraine agriculture is fast catching up with modern technology and techniques. Better and bigger storage is a top priority, particularly when yields are high. Total storage capacity increased by 2 million tonnes last year with the construction of more silos and grain elevators planned for this year. Ukraine’s admission to the World Trade Organisation (WTO) in 2008 was a further contributing factor to Ukraine’s high grain exports.

Membership of the WTO has meant Ukraine has had to adopt international export licensing requirements and abolish grain export restrictions. Agricultural experts are unanimous in that agriculture on Ukraine land has a very bright future. Ukraine is one of the very few countries in the world where vast agricultural expansion will not have a negative effect on the environment. Ukraine also enjoys the privilege of some of the world’s most fertile soil.

In addition, improved farming techniques will ensure that Ukraine continues to produce high crop yields over the next decade and beyond. And with world food consumption forecast to increase by over 40% by 2030, Ukraine land and the soft commodities produced on it are poised to become an essential part of everyday life.

Princess Project site cleared

Updated on Monday 14th of September 2009

Silva Tree staff

The plot of land purchased for the first phase of the Silva Tree Princess Project in Panama has been cleared and cleaned in preparation for planting of the seedlings. Staff have been contracted from the local population for both the clearing and the planting of the land and are standing by for the arrival of the Paulownia seedlings.

The project site has been used as cattle grazing land for many years and, as such, contained little visible plant life, limited to just brush, grass and small bushes. Strong weeds, bushes and grasses can create competition for young seedlings, however, so the land had to carefully cleared and prepared for planting.

Care has been taken to ensure that any native trees or important plants in terms of animal migration, bio diversity or protected species, have been left to stand. Similarly, a patch of trees by the stream that flows through the land has been left to maintain its banks and water quality.

To see latest images of the cleared land, please go to our new online photo diary at www.sterlingknightconsultants.com

New Photo Diary Feature

Updated on Monday 28th of September 2009

Silva Tree staff

Silva Tree believe in involving everyone in our projects’ progress. We want you to be able to see exactly what we are doing and when. Since the project is in a fairly remote location and the ability for our customers and supporters to visit it is limited, we decided to bring the project to life via our website.

You can now track the progress of the Princess project online via our photo diary. This feature contains images and captions of what is happening to the project and is updated at every significant development, from community projects to planting and watering.

A link to the photo diary can be found on the Silva Tree home page: www.silvatree.com or use the following url to view the photo diary now: http://www.silvatree.com/photo-diary.html

We hope you enjoy this new feature, please let us know if you have any suggestions on how to further involve you in the Princess project progress.

Russia and other former Soviet countries such as the Ukraine could boost world food supply by encouraging more private investment, the head of the European Bank for Reconstruction and Development (EBRD) said on Saturday.

The EBRD believes at least 13 million hectares of former farmland could be returned to production across Russia, Kazakhstan, Ukraine and other countries. Just under half of this land is in Russia. "The investments remain enormous. Under the current circumstances such financing is difficult to obtain," EBRD President Thomas Mirow told Russian President Dmitry Medvedev at the World Grain Forum in St Petersburg.

Medvedev said Russia, the world’s third-largest wheat exporter, was ready to devote financial resources to strengthen its position on world grain markets. Last week he said Russia supported long-term foreign investment in its agriculture.

The world’s No. 5 grain producer also plans to raise its output by some 25 percent to 133-136 million tonnes a year in the coming years to contribute to global food security. The EBRD, state-owned by 61 countries, believes poor infrastructure, such as limited capacity on railways and grain elevators, as well as unclear legislature, are hurdles to unlocking the countries’ enormous food potential.

"The (financial) crisis has enhanced the role of the state and one of the lessons will be that a functioning market needs good and workable regulations," Mirow said. Last week Medvedev said Russia intended to enter Southeast Asian markets and to diversify its export mix by raising its share of processed grain products, specifically flour and groats.

With recent focus of the BBC and other international media on farmland investment in the Ukraine, the question of how safe it is to invest money in the Ukraine is often put to our portfolio managers.

Ukraine is still very much an emerging market and needs to improve on internal political and economic stability. However, this goes for most former ‘East Block’ countries.

Financial and Economic Outlook

Ukraine’s membership of the WTO in 2008 and the subsequent launch of negotiations for an FTA (as part of the future Association Agreement) are expected to deepen an already promising economic partnership.

The Executive Board of the International Monetary Fund (IMF) approved a in August last year a two-year Stand-By Arrangement (SBA) for SDR 11 billion (about US$16.4 billion) to help the authorities restore financial and economic stability and strengthen confidence.

Political Stability

An other reason for concern with some investors is the fact that the Ukraine is ,located close to Russia and the Georgia incident is still fresh in many people’s mind.

Vladimir Putin told Spanish journalists that if Ukraine is accepted to the EU, as it desires, Russia will be happy. “Indeed, Russia and Ukraine have close relations in economy and cooperate in the industrial sphere. So, incorporation of the Ukrainian economy into the EU economy is likely to have a positive result for Russia as well,” Vladimir Putin said.

The European Union today is the Ukraine’s largest trading partner.

Research & Resources

For more information about the economic and political stability in the Ukraine we invite you to check out the following articles.

• IMF Approves US$16.4 Billion Stand-By Arrangement for Ukraine
• World Economic Forum and Foundation Announce Release of 2009 Competitiveness Report
• IMF Allocates Ukraine USD 1.6 Billion
• Russia welcomes Ukraine’s EU membership
• Closer ties between Ukraine and EU

Today, well over 90 investment funds have emerged that are investing directly in farmland, including Rabobank’s recently launched Rabo FARM business which focuses on rural resources and primary production. Over the past few years, agriculture’s attractiveness has captured the interests of the professional investment community.

Food security in farmland

During last year’s commodity boom, food shortages became a global concern, especially among countries dependent on other countries for food. “Highly populated, ‘food insecure’ countries with limited additional farmland capacity have started looking for ways to increase food security and resources,” said Rabobank analyst Brady Sidwell from Hong Kong.

“Thus emerged the recent phenomenon of ‘countries’ investing in other countries’ farmland to secure food supply,” said Sidwell.

Overseas land investments

"Countries who are dependent on the rest of the world to satisfy local food security, were forced into action last year,” said Sidwell. “We’re likely to see more overseas land investments going forward as countries aim to avoid the precarious situation of low domestic stock levels amid tight international supplies experienced last year, especially in those countries very dependent on importshttps://www.emeraldknightconsultants.com/files/blog/.”

Most of the countries being invested in by the major food importing nations on the grounds of food security are either third world or developing nations, such as Madagascar, Ethiopia, Cambodia and Mozambique. In these countries, the food security situation is already dire and the percentage of malnourished citizens is among the highest in the world. It will be interesting to see how these investments play out.

Local level investment

However, such investments can also lead to positive developments at the local level. For example, many parts of Africa are rich in land and water resources. “Yet, a lack of scale, infrastructure and best practices management prevent such resources from being properly utilised. Investments in infrastructure could untap these resources,” said Sidwell.

Making land more farmable and desirable in countries like Mozambique and Tanzania, can provide for both the local needs as well as the international market.

Agricultural transformation

“The agricultural industry will in some ways transform as more investment in agriculture leads to more publicly listed companies and targets of the professional investment community including private equity, hedge funds as well as institutional and retail investors,” said Sidwell.

“However, with so much investment needed in the upstream of the agricultural supply chain, agriculture is the next big thing and there are plenty of opportunities to go around," concluded Sidwell.

source: http://www.rabobank.com/content/news/news_archive/054-Investinginfarmlandandfoodsecurityoverseas.jsp

Grain prices reached record highs last year and as a consequence, agricultural land investment, including Ukraine land, also soared. And according to the OECD-FAO Agricultural Outlook 2009-2018, this win-win situation is expected to continue at least for the next decade.

As highlighted in the OECD-FAO Agricultural Outlook, "real commodity prices over the 2009-2018 period are projected to remain at, or above, the 1997-2006 average". The reasons given in the Outlook for the expected high prices for soft commodities are renewed food demand from developing countries – the changing diet in China and India are the main drivers here – and the emerging biofuel markets, led by Brazil. Another factor underlying the consistent push on soft commodities is the relentless population growth of 150 people per minute, an acceleration rate that the current agricultural land cannot sustain.

According to OECD-FAO, the issue of food security is high on the political agenda. Helping Africa feed itself featured as a top priority at the recent G8 summit in Italy and the first ever G8 Agriculture Ministerial Summit was held in April this year. In the words of a recent FT article, "after a year worrying about the piggy bank, the world economy is turning its attention to the cupboard".

The Agricultural Outlook includes research carried out by FAO showing that food production needs to increase by more than 40% by 2030 and by a massive 70% by 2050, compared to the average current levels. Given the huge demand for more food, the availability of agricultural land is a major worldwide concern. The OECD-FAO report that the world currently has 1.4 billion hectares under crops, but that there is "substantial additional land available for use in agriculture". Areas where the additional 1.6 billion hectares are situated include Brazil, Russia, Ukraine and some African countries. After the demise of the USSR in 1991, a significant proportion of Ukraine’s rich agricultural land fell into disuse with the subsequent decrease in grain production. However, the demand for more food has meant that investor interest in Ukraine agricultural land has been high. Institutional funds (for example, Morgan Stanley) have bought large tracts of land in Ukraine. With prices far lower than many other countries, investment in Ukraine land is cheap.

Farm technology is currently under major improvement in Ukraine where agricultural land yields are fast catching up with their potential. While yields in Western Europe are expected to increase at just fractional rates, those in Ukraine are predicted to soar as better land practices are implemented. The FAO suggests that Ukraine’s unique combination of excellent soil quality and good climatic conditions should lead to a significant increase in yields over the next decade.

While the OECD-FAO Agricultural Outlook is cautious about the world’s economic future, the report gives a positive outlook for the agricultural markets as it expects "real commodity prices to remain above historical averages".

With most investments performing dismally, it is refreshing to see one area bucking the trend.

Tonight (24.08.09) Newsnight will be reporting on the Ukraine and how the country has the attention of the West for its soil which is the best in Europe.  Ukraine is the "bread basket" of Europe and with more land being handed over to the bio diesel sector across the world, there is a very hungry world looking at this region. 

Most of the land in the Ukraine is made up of tiny patchwork of fields. Local farmers work as they have for generations cutting the hay with hand scythes, the carts which bring in the harvest and the ploughs that work the land are horse drawn.  Now the horizon is changing with investment coming into Eastern Europe and the sound of a combine harvester can be heard in the distance. 

Foreign governments and foreign companies are negotiating for a part in this agricultural land.  Even on the news recently the Libyans are negotiating for land in Ukraine, as are the Russians.

Many governments are looking to secure land overseas as a way to ensure the food supply to their country does not flater. The investment in the Ukraine is huge,it’s transforming the landscape, investing millions in machinery and infrastructure.

Companies investing in this region, seem to have calculated that if predictions of global food shortages prove accurate over the coming decades, there will be big money in food production.

"Every human being is a patriot of their own land, so yes it would be nice to have our own companies, we’d love that, but for right now it is what it is, whoever has got the money, they control the gain" says Stephan Ryzna, a local farmer.

A recent World Conference of Science Journalists in London devoted a whole day of debates to the global food crisis and stability. To summarize dozens of speeches, it suffices to say that the global food crisis is only in its infancy. A full-scale war for food will start very soon. According to the United Nations, grain requirements will increase by 50 percent by 2030 and by 100 percent by 2050.

Most experts in high-profile organizations forecast the global population will reach 9.5 billion in the mid-21st century. Even today, with merely 6.5 billion people, nature is experiencing tremendous pressure. There is a shortage of land and water and global climate change.

Professor Ian Crute, director of Rothamsted Research, said: “Historically, Ukraine has been one of the world’s breadbaskets, for it is the most fertile land in Europe. Prospectively, Ukraine is becoming an important source of food supplies. Yet the productivity of Ukraine’s agrarian sector is only 50 percent of what it could be.

This can be explained by organizational problems, climate change, and soil fertility. I would not like to be a political adviser for Ukraine, but one of the most useful things to do could be consolidation of small-scale landowners into large collective associations, where the main investment could be focused on the mechanization of production, capitalization, learning skills and land managementhttps://www.emeraldknightconsultants.com/files/blog/.”

Ukrainian scientists have long been speaking about the Ukrainian land as a strategic resource. Agricultural land for Ukrainians is the same as oil and gas is for Qatar.

Sterling Knight together with Aston Lloyd PLC and Euro Farms can now announce a new investment providing clients with the opportunity to reap rewards from agricultural land investment in the “bread basket” of Europe: Ukraine.

Following the bull run in metals and oil, agricultural land prices are rocketing as big money pours into the sector.

"You can’t make it. And, as the world gets bigger and bigger over a period of time, the pressure on land and land use is going to increase," said Clive Hopkins, partner at Knight Frank.

Soaring agricultural prices, growing demand for biofuels and the growth of the Chinese and Indian economies are leading top global investment banks to buy farmland in a bid to embrace the physical commodities market.

Investment banks and hedge funds are mopping up vast tracts of agricultural land around the world, hoping to ride the so-called "commodities supercycle" that has lifted prices of everyday agricultural commodities such as wheat, rice, soybeans and corn to record highs.

U.S. investment bank Morgan Stanley has bought several thousand hectares of land in Ukraine, Europe’s grain basin.

Morgan Stanley declined to comment, but industry executives say many other big banks are looking at land.

Barclays Capital, the investment bank arm of Barclays, is actively searching.

"We are looking at a lot of opportunities in those sort of things. We are looking across the board. We certainly wouldn’t rule it out," said Roger Jones, co-head of commodities at Barclays Capital.

Banks are not the only ones going back to the land.

Fund manager BlackRock has a hedge fund that invests in agricultural land. International estate agents Knight Frank is setting up one to buy agricultural land in the UK.

Industry experts say hedge funds have bought thousands of hectares of corn and sugarcane plantations in the United States and Brazil, illustrating how even purely financial players are moving beyond paper markets into real assets.

"Farming is going to be one of the best places to make money in the next 10 years if you know what you are doing," investor and commodities guru Jim Rogers told Reuters in an interview earlier this month.

Investors say the possibility of commodities demand outstripping supply is driving the trend that could intensify given the pace of growth in China and India.

With nearly 2.5 billion people, the two countries are home to nearly a third of the world’s population.

As their economies grow, pulling millions out of poverty, this will drive up consumption. China and India could trigger a wave of demand that existing supplies will struggle to meet.

"Over the next five years, you will have 2 billion more people eating bread, eating noodles, drinking coffee … There is no way in this world that the supply side can catch up with the demand side," says Badung Tariono, an Amsterdam-based fund manager for ABN AMRO.

That is not all. Pressure on arable land will also come from rising demand for biofuels and for grains for cattle to provide meat to emerging markets.

"The use of foodstuffs to make energy substitutes — corn and sugar for ethanol and palm oil and soy oil for biodiesel — has created a fresh layer of demand," says Edward Hands, a portfolio manager at Commerzbank Corporates & Markets.

"Supply is inelastic. It’s not easy to increase the acreage to produce crops. Effectively your supply curve is fixed and your demand curve is moving to the right," he added.

Financial players also realise that agricultural land is a limited resource, and who controls it now could well reap windfall gains later.

Analysts say having a stake in the agricultural process is an extension of a trend among financial players to embrace physical assets to gain greater insights into paper trading.

Banks, hedge funds and private equity funds have over the past several years built sizeable interests in physical infrastructure in the energy sector, with assets ranging from ships to pipelines to power stations.

"There is this craving for real assets. Banks have become more and more physical in their investments," says Francisco Blanch, head of global commodity research at Merrill Lynch.

"In any resource sector, if you want to get involved, you always want to be in the upstream. It doesn’t matter whether it’s mining, whether its oil and gas or agriculture," says ABN AMRO’s Tariono.

"The highest return you get is always in the upstream. The upstream side of the business has higher risk. So you need to be compensated with higher return."

There has been a lot of press in recent months regarding agricultural land investments and how they are a serious option for investors who wish to manage portfolio risk and at the same time remaining Socially Responsible.

SRI – Socially Responsible Investment integrates environmental orientation and investment products. I.e. sustainable forestry, wind power, solar power and agricultural land investments.

Soft commodities have been traded for millennia, first in barter form and in recent years as futures. Now, however with the rising awareness of global populations and food shortages, these soft commodities, especially grain harvests, are once again being turned to by savvy investors who are looking to diversify away from poorly performing stock indices and the “ghost town” of real estate markets.

With demand for crops, outweighing supply in many areas of the world, focus is rapidly turning to agricultural investments and in particular grain crops as they are not only the primary food product for m countries, but with many third world countries, such as India and China now consuming increasing amounts of meat and poultry, they are also the cornerstone of feedstock for these animals. Add to this the bio-fuel requirements, the amount of land currently lying fallow and in many areas of the world, agricultural land being used for industry and construction; it quickly becomes apparent why investment in the agricultural sectors is increasing.

There is, however another side to agricultural investment and this has hit the headlines in recent weeks as certain governments have begun buying up huge tracts of fertile land in poor third world countries. The problems arise because these fertile plains are in many cases the lifeblood of the indigenous populations. By selling these farmlands, governments are putting an increasing strain on their own people, as the harvests of crops are being exported directly to their new “owners” abroad.

Agricultural lands, which in many cases have been farmed by local families for generations, are being sold by their governments in order to raise huge amounts of cash. Essentially these “land-grabs”, are selling out the locals for the enrichment of a few key players. But a secondary concern is that should modern, intense farming methods be introduced, the local populations will lose their livelihoods.

Ecological objectivity is also at risk, as in the proposed Qatari deal to gain control of fertile land in the Tana River Delta of Kenya. In exchange for US$2.5 Billion in loans, Qatar is requesting 40,000 hectares of prime agricultural land. The Kenyan government has in principle agreed, but the local farmers are stating that the land is not deeded to the government and therefore not theirs to give away. In Kenya demonstrations won’t be where the outcry stops, the Kenyan people have been known to kill for land!

Another example is in Ethiopia, where Saudi Arabia has invested US$100 million in the country to grow rice that will be exported to Saudi Arabia. Given that the World Food Programme is currently supporting 4.5 million starving Ethiopians to the tune of US$166 million, there appears to be something very wrong with the big picture.

These scenarios quickly turn into “Land Grab” cases, especially when the land is offered as state owned, where it has been historically farmed by the locals.
The situation could quickly deteriorate further should the foreign owners introduce modern farming methods which will make redundant, the use of local workers. Also with increased use of chemical fertilizers, irreparable damage could be caused to local ecology if not properly monitored.

Despite these non-green and unethical “Land Grabs”, agricultural investment has proven to be environmentally and financially rewarding for local economies and investors where sensible legislation has been established and “understanding” government departments have overseen development.

Only diligent research will convince you as to whether it is a good investment or a land grab.

If an “investment” holds the potential to cause further hardships to; or destroy local communities and ecologically damage the area, you should be looking for somewhere else to invest your money. Typically these kinds of investment proposals are found in famine ridden, third world countries where non-ethical governments are in power.

However, if an investment will improve sustainability, increase employment and the local standard of living, it is probably worth researching further.

Agricultural land investments in Ukraine have been shown to offer excellent returns for investors and at the same time, improve farm management procedures, increase prosperity of local workers and induce a greater ecological understanding of the necessity for sustainable farming practices, which vastly increase grain harvests without the need for over fertilization.

Expectations are for Ukrainian agricultural land to double its yield per hectare in the next few years. These higher yields represent better employment figures, higher wages, and improved diets for the locals; increased overall GDP and indirectly the opportunity for better education of the younger generations.

Imagine all of this without damaging your ROI or the planet.

Ukraine Agricultural Land Investments

Each year the demand for grain increases as the global population grows by 150 mouths per day. At the same time, stocks are dwindling; huge tracts of arable lie fallow and many new harvests are decreasing in quality due to over farming and the excessive use of chemical fertilizers and pesticides.

Ukraine is pushing itself back to the top of the food supply chain, somewhere it has not been for nearly a century. Once the bread-basket of Europe, Ukraine holds 40% of the worlds Chernozem commonly known as “Black Soil”, a precious commodity in the farming world, it is more fertile, more workable and better producing than any other soil type.

Through massive FDI, improved farm management and modern farming techniques, Ukraine is on target to double its harvest production of tonnes per hectare, within the next 2-3 years, of quality food grain, as against the poorer feed grain which, is mostly suitable for livestock and bio-fuel.

Well over 11% of investments and funds around the world (accounting for US$2.7 Trillion) are now either environmentally friendly, green or Socially Responsible and include several key factors that are important:

• Improving lifestyles and local economies
• Increasing demand for ever decreasing supplies
• Sustainable commodities
• ROI out-performing more traditional investments and indices

Is it time for you to plough some of your investment capital into this growing market?

Read more about investing in Ukrainian Farmland…..

Undoubtedly, Ukraine has some of the finest farmland in the world. And, given the mounting price of food worldwide, export-oriented agriculture should continue to presents a major opportunity for Ukraine’s economic development.

Grain trade could be one of the most promising, profitable and attractive sectors of Ukrainian economy. Ukraine is already a net grain exporter. It also appears to be one of the few countries in the world in a position to meaningfully increase net exports to offset emerging deficits elsewhere. But, the sector lags.

Why? Serious agribusiness investors seek opportunities bolstered by transparent and effective farm policy, including land acquisition guidelines. They also insist that their investments be supported by adequate infrastructure and public works. Ukraine falls short in all these areas.

Infrastructure problems include inadequate physical capacity of railway networks, ports, and highways. And, there are major problems with logistics and storage, labor productivity and farm education.
Despite these weaknesses, one expert in the field, John Shmorhun, President of AgroWorks Consulting, remains upbeat on agribusiness opportunities in Ukraine. In a presentation to the U.S-Ukraine Business Council this past Wednesday, Shmorhun cited several profitable business models involving large-scale Ukrainian farming as the source of his optimism.

As Shmorhun sees it, Ukraine is the "future of agriculture." Major corrections regarding land acquisition costs, the natural gifts of rich and plentiful soil, location, and climate, all contribute to increasingly attractive investment opportunities, according to Shmorhun. Still, Shmorhun acknowledges Ukraine’s current agribusiness limitations, noting the challenges related to logistics, storage and workforce efficiency.

Until Ukraine restructures its farm policy and infrastructure, it will fail to fully capitalize on a key developmental opportunity. This opportunity should not be understated. According to the European Bank for Reconstruction and Development, a shift in policy and increase in private and public investments could help Ukraine increase its annual grain production, possibly to as much as 70 million tons. The U.S. Department of Agriculture currently projects the export of Ukrainian grain at 21.6 million tons for the 2008/2009 marketing year. Any such increase in production would largely translate into increased export potential.

Farm policy and many aspects of an improved infrastructure will need to be directly addressed by the Ukrainian Government. But, in terms of investment opportunities, grain storage, food processing and logistics all seem to present forward-looking possibilities, especially as they can be coordinated with improvements brought about by changes in Ukrainian agriculture and infrastructure policy.