SASKATOON – Privatization in Ukraine doesn’t mean smaller or larger farms, but it could lead to more efficient farms, said the president of a major Ukrainian bank.
Sarkis Simovjan and two associates from the Grant Bank, in Kharkov, Ukraine, explored opportunities for trade and development in Western Canada during a recent two-week tour of Canada.
The land around Kharkov is similar to the Canadian Prairies. The city is home to the Belarus farm equipment company, many resource-based industries and a large part of the former Soviet space program.
Read Also
VIDEO: Agritechnica Day 4: Robots and more robots, Nexat loves Canada and the trouble with tariffs
Agritechnica Day 4: Robots and more robots, Nexat loves Canada and the trouble with tariffs.
Simovjan said the changes occurring in the country’s political structure mean the privatization of industry and capital is still new to generations of people who have known only Soviet state rule. Large collective farms are being divided among residents and the collectives either form smaller farms or co-operatives. He said the size of the farms is less important than whether they are operated efficiently.
The bank has taken on the role of lender and adviser in the new economy.
“We don’t lend money based entirely on capital, but rather on the chances of repayment. We look at the farm’s ability to generate products and profits rather than the equity needed to cover the loan,” he said.
Work itself is also a pivotal point for the new nation. The ability to produce a product, turn it over to another company for shipping and yet another for processing and then to others for final distribution and marketing is a difficult concept for Ukrainians to grasp, he said.
“Generations have been raised to be a part of the government system. Being on their own is not as easy as it sounds if you have no history to guide you,” said Simovjan.
The group told Saskatchewan pro-vincial representatives during the visit that even the ability to plan for local agricultural variabilities such as soil type, moisture conditions and topographic variations is a foreign concept for farm managers who are used to taking instructions from a central office with generalized plans for agriculture.
“There is a great demand for agricultural consultants in our country. The people have no idea what a business plan is either, so they are starting from scratch.
“We have yet to develop the infrastructure that supports a western style economy. Canada is a model for us to follow and Grant Bank hopes to provide the contacts that our people need to take part in building a new economy,” said Simovjan.
