Ukraine is hailed as the “Saudi Arabia of grain" or the breadbasket of Europe, with 50 percent of all common wheat imported by the European Union coming from Ukrainian fields. In the past five years, the country’s market share has doubled.
But some of Ukraine’s agricultural exports are at risk.
Ukrainian traders of agricultural commodities told the Kyiv Post that lack of access to financing leads farmers to purchase lower quality pesticides, sometimes polluting the farmers’ products while killing off bees that fertilize crops across the country.
Pesky financing
More farmers lack cheap financing for top-quality foreign fertilizer, forcing them into cheaper, more destructive options.
Natalia Shpigotska, an analyst at Dragon Capital, told the Kyiv Post that crop protection imports such as pesticides declined by 21 percent in 2014, or $610 million.
“All the local producers were facing a lack of U.S. dollars and a lack of opportunity to attract credit from suppliers of crop protection,” Shpigotska said.
It is difficult to know how much farmers save by opting for cheaper pesticides because many of them resort to smuggling.
Buzz around town
The problem is felt most acutely in the beekeeping industry. Ukraine is Europe’s largest honey producer, with 75,000 tons of honey produced annually – the highest per capita on the planet.
According to Serhiy Cherchenko, director of Be Buzzz, a Ukraine honey trader, the country’s industry faces a crisis because pesticides are killing off bees. “In 90 percent of cases, the deaths of bees are caused by the uncontrolled application of different pesticides,” Cherchenko told the Kyiv Post.
When the bees fertilize plants, they are covered by the pesticide, used to kill pests that would otherwise destroy the crop, and then bring it back to the beehive. If the pesticide is of poor quality or was improperly applied, one infected bee can kill many bees in the beehive.
“It’s the low-quality pesticides that present the most danger not only to bees, but to any living being,” Cherchenko said.
The problem has far-reaching consequences. Cherchenko called it a “global problem,” since the lack of bees means that other crops are not fertilized properly.
Contamination?
According to Paul Peters, deputy chief financial officer at Ukrainian agricultural trade firm Agri Finance, cheaper options damage export.
In January, the Czech Republic raised an alarm after authorities found “antimicrobial agents” in a batch of imported Ukrainian honey. “The most dangerous pesticides are those that are undeclared,” Cherchenko said.
The Czech incident led to the loss of Ukrainian honey exporters’ ability to sell to the European Union unti it can pass tests.
The same problems could happen for grain. “If you have something not very good in your grain, you won’t sell it,” Peters said.
