Large Farm Management Conference “Agribusiness 2018: AGRO or BUSINESS?”
05 October 2018
IAMO and the International Competence Center on Large Scale Agriculture (LaScalA) were partners of this year's Large Farm Management Conference held from September 19th to September 20th, 2018 in Kiev, Ukraine. The main organisers of the international conference entitled “Agribusiness 2018: AGRO or BUSINESS?” were the Ukrainian Agribusiness Club and the UCABevent Agency.
This year the underlying theme of the event was a debatable question of the role of agriculture in development. Is the agricultural sector an economic driver capable of generating foreign exchange earnings and being competitive on world markets or should it have another function that ensures the stability of rural and regional development?
The event brought together the unique experience of Ukrainian and world experts, practical tips and success stories from representatives of Industrial Milk Company, Horsch, The Climate Corporation, NovAmerica, Velcourt, BASF, Agro KMR, Ukrposhta, Syngenta and many others. The best Ukrainian and foreign agricultural producers and leading experts discussed how to ensure optimal production costs through innovation, minimization of transaction costs and maximum motivation of staff.
Now in Ukraine there is a debate about whether the agrarian sector should be the basis for the implementation of the state policy for servicing society in the countryside or it should serve as a driver of economic changes. Taras Vysotskyi, General Director of UCAB is convinced that Ukrainian agribusiness sets the tone of many other related industries. “The agrarian sector can combine two components harmoniously: to remain profitable and innovative, ensuring the development of rural areas and maintaining a positive environmental background. The purpose of our conference is to form benchmarks and package of effective tools to ensure an effective combination of agrobusiness, profitability and public benefit”.
Alex Lissitsa, CEO of IMC, President of the Association “Ukrainian Agribusiness Club” told what is needed for innovation in the agricultural sector to be effective. According to the president of UCAB, 80 % of innovations in the Ukrainian agrarian sector are focused on the problem of preventing bribery and theft. Producers can’t clearly describe the benefits of additional innovative solutions and their inflated prices, IT developers are partially detached from the agrarian environment and offer solutions that further complicate the business. There are very few independent technology consultants on the market who could evaluate one or the other solution. In addition, the level of education of workers does not correspond to the level of technical innovative solutions of our time that management proposes to introduce. “For a qualitative leap and effective introduction of innovations in the agricultural sector we need cardinal changes in agricultural education and science, radical restructuring of business processes and management systems in agribusiness, a full review of labor legislation and opening access for qualified personnel from abroad, establishing new markets through the conclusion of new trade agreements and the revision of existing and attracting foreign direct investment in the sector through the sale of assets and land”, – said Alex Lissitsa.
Specially invited speaker of the conference was Michael Horsch, one of the founders and CEO of Horsch. In his opinion, the size of the area doesn’t affect the success of the agricultural producer: “We should first talk about the level of payment for land lease in Ukraine, which was $ 20/ha 15-20 years ago, or $ 100/ha 10 years ago and now it is $ 150-200 per hectare. The one who will be able to pay more for the land lease will receive a competitive advantage on the market. Among other factors, the increase in the cost of rent indicates that agriculture has become more professional. If the holding has many hectares, but bad management, it will become bankrupt already tomorrow. Similarly, farms that do not use modern technology - will lose”.
Clément Coussens, CEO of Agro KMR, spoke about the experience of developing his company: “Collaborative teamwork of professionals - this is the main secret of the success of Agro KMR. The basic principles of personnel policy of the company are building the team on mutual respect. Agro KMR supports its employees both financially, providing the proper level of payment, and socially - provides decent working conditions. One of the company advantages is that our employees have a 100 % social package - the car, mobile phone is provided for use and also medical insurance is provided for employees and their family members. The company constantly organizes educational trips for the team both in Ukraine and abroad”.
The IAMO researchers Taras Gagalyuk and Igor Ostapchuk participated in the Large Farm Management Conference as discussants in the plenary sessions dedicated to the topics of transaction costs and productivity of large-scale farms, respectively. In particular, Taras Gagalyuk presented his vision on the development of large-scale farming as a dominant mode of organization of agricultural production in a number of transition and developed countries. He further discussed the management approaches that help large-scale farms to reduce monitoring and transaction costs with Brian Redrup, Farms Director at the agroholding Velcourt that farms about 55,000 hectares in the UK and implements a large farming project in Ukraine. In turn, Igor Ostapchuk discussed the role of new technologies in improving the efficiency and productivity of farms with Clément Coussens, CEO of Agro KMR, an enterprise with French capital that farms 12,000 hectares in the Dnipropetrovsk region of Ukraine.
During the second day of the conference, the participants discussed the newest technologies that have already come to Ukraine and are actively used in leading companies. On the fields of Agro-region holding in the Kyiv region were demonstrated the most effective aggregates and technological solutions. There were demonstrated such machines as: disc and paw cultivators, subsoilers, heavy disc harrows, plows and others. During the plenary session, leading experts talked about the cases of introduction of advanced technologies in production, the use of tools and systems in precision farming and how to efficiently implement the sowing.