Punjabi farmers look to Ukraine for a profitable harvest
Wealthy farmers from the Indian state of Punjab look for new opportunities in Ukraine as the bread basket of India fails to fulfill their needs.
India’s much-lamented brain drain is no longer restricted to the fields of science and technology. Rich farmers from the bread basket of India, Punjab, are targeting rich rewards in Europe’s own bread basket, Ukraine.
Punjab farmers point to multiple reasons behind the bold move.
Many blame their home state’s irregular power supply, a shortage of rainfall, rising costs, and the non-availability of agricultural land for expansion as the reasons behind stagnation, non-profitability and even losses in farming over the past two decades.
Leading the exodus are the state’s cash-rich modern farmers, who are expanding operations in other agriculture-based nations, where relatively low levels of investment provide better returns than can be found in Punjab.
The same farmers are also eyeing other countries’ advanced marketing systems and food processing industries, which are key to the profitability of the agriculture sector, but which have never taken off in Punjab.
Ukraine devotes 71.2% of its total land area to agricultural use, has lower operational costs than in Punjab, and its government is actively promoting agriculture as a business sector.
On top of that, farming of Ukraine’s 32.5 million hectares of arable land contributes 34% to the nation’s Gross Domestic Product. The country is a leading producer and major exporter of wheat, sunflower oil, maize and barley, and its climate is favorable for the production of grain, cereals, oilseeds and other profitable agricultural products.
Pavitar Singh Pangli, president of Borlaug Farmers Association for South Asia, acknowledges the attraction, describing Ukraine as a country with vast agricultural fields and fully mechanised farming.
“It is a competitive agriculture market, with facilities like electricity, irrigation, seeds and fertilizers, and systematic and affordable labor,” he said.
For farmers and other investors in the agricultural sector, Ukraine is also an excellent gateway to world markets. It enjoys proximity to the large and growing markets of the Russian Federation, the European Union, and even the Middle East and North Africa through its well-equipped sea ports.
Meet Jaswinder Singh
Jaswinder Singh is the latest of the modern farmers from Punjab’s Jalandhar region to move base. Singh has already completed agricultural projects in Ukraine and has acquired about 12,000 acres (about 5,000 hectares) of land there.
According to Singh, he and his associates wanted to expand their agricultural profile, but couldn’t do so given the present conditions in Punjab.
“It is not possible to expand agriculture-based projects in Punjab, a state of great poverty. On top of that, the cost of inputs including seeds, fertilizers, pesticides and insecticides has been increasing day by day without state control,” he complained, while also pointing out farmers’ woes over the unreliable supply of electricity during key production seasons.
“Expansion (in Punjab) was simply not possible, even in the foreseeable future,” he added.
Ukraine also offers a competitive edge thanks to its fertile black soil and favorable climate.
Anil Sharma of Punjab Agriculture University, Ludhiana, describes Ukraine as the bread basket of Europe: “For this, the country should be thankful to its black chernozem soil, which is highly fertile and rich in organic matter. Covering more than half of Ukraine’s cultivable land, chernozem soil offers exceptional agronomic conditions for the production of a wide range of crops, especially cereals and oilseeds.”
Over the past few years, Ukraine has actively wooed overseas farmers by inviting them to explore investment opportunities, identifying land for lease and promoting related businesses like poultry, dairy and pig farming.
Where Punjab is losing
When it comes to agricultural land, Ukraine offers farmers a sweet deal.
Davinder Pal Singh Chawla is a prominent agricultural land promoter and director of Sunbeam Colonisers Pvt Ltd who has reportedly made the most profitable investment in Ukraine. He told Asia Times that the cost of agricultural land in Ukraine is quite low compared to Punjab.
“The average price per hectare of agricultural land in Ukraine is about US$3,000 to $6,000. Average lease rates of agricultural land are $32 to $75 per hectare per annum. Also, the agricultural fields are very far apart here in comparison to Punjab, so it is easy to manage big holdings in comparison to small chunks and more profitable too, due to low cost of inputs per hectare,” Chawla said.
In Punjab, prices are steep for farm land near major cities and adjoining highways or other link roads. The average price per hectare in prime areas is about $600,000 to $700,000, with plots in more rural areas commanding prices of $75,000 to $150,000. Leasing rates for agricultural land are also soaring.
“So buying agricultural land in such locations has become extremely difficult,” Chawla said.
It is easy for foreigners to buy land not intended for agricultural purposes in Ukraine, where the Land Code regulates purchase of property. However, to acquire land intended agricultural use, one needs to establish a legal entity on the territory of Ukraine and to purchase a parcel of land for this legal entity. Foreign farmers, with the help of local law firms, acquire land for cultivation in this way.
Sushil S Malhotra, the general secretary of the Progressive Innovative Farmers’ Association, had another complaint about Punjab, the state of the 1960s Green Revolution.
“The poor and vulnerable people are poorly cared for in the state,” he said, adding that “electricity supply to the agriculture sector is only available four to five hours a day. Groundwater level is already down as irrigation is dependent on tubewells in the major portion of the state. Even canal water is available only to a limited agricultural area and is not fulfilling the requirements of most of the sector”.