This sky-high technology was introduced to IMC management by International Finance Corporation (IFC) experts during a special training program for Ukrainian farmers. “Our agro-enterprises have an enormous yield increasing potential, and we show how to get the maximum benefits without extra investments”, – tells Oksana Varodi, the head of IFC advisory program “Ukrainian small and medium-sized agribusiness development support”.
Ukrainian farmers and the industry officials have been taught by IFC experts for the third year. At first, the international experts advised the Ukrainian authorities on how to simplify the legislation for agro-industrial complex, then they helped the farmers to switch their production to European work standards. The last and the most important question is how to get cheap funding from international banks. Varodi is convinced that all this knowledge has to make the workshops participants’ companies more efficient. “There is a huge deficiency of necessary knowledge and skills for the effective conduct of agribusiness,” – she points out.
The biggest producers of agricultural chemistry Bayer and BASF companies have become the partners in IFC educational program. The managers of both companies are sure that new knowledge is absolutely essential for Ukrainian farmers. “The farmers lose about 8 million tons of grain annually due to poor infrastructure for its storage, lack of technologies and limited funding,” – notes Andreas Loechel, Head of Bayer CropScience in North Black Sea region. “With the new program, Ukrainian farmers will learn to use innovations and the latest developments to increase their companies’ revenues,” – agrees with him Tiberiu Dima, head of agribusiness at BASF Company in Ukraine, Moldova and the Caucasus countries.
Bayer Company was the first to announce the beginning of their educational courses. In 2013, the chemical giant in collaboration with IFC held 140 workshops which were attended by 11 000 farmers. During the trainings the company presented several special services for farmers. The first one was the program complex “Bayer Phytosan Monitor”, which forecasts the level of crops diseases, taking into account meteorological situation in the region, biological features of different plants and migration of various pests. The monitoring is carried out in all regions of the country every three days. A user can monitor the forecast of diseases level using a special interactive map on Bayer CropScience site. If any problems are found in the field, a farmer can ask Bayer experts what products and in what quantity should be used.
The second service presented to the farmers was “Bayer Fields Control” which also analyzes the situation in the fields from space. The program combines the received weather data with each of the six major crops’ dynamics of growth and makes its own future yield forecast. It is very useful when an agricultural company’s fields are located in different parts of the region. “It is impossible to go around all the fields. From the satellite image you can clearly see on what territory there is a risk of the crop loss”, – shares his experience Viktor Demchenko, CEO of Kirovohrad agricultural company “Vlad”, that specializes on grain growing and livestock breeding.
In 2014 one more service, “Bayer Master Class”, started working .The target audience are the managers of agricultural companies who want to learn about good grain yield secrets from the experts working in different countries. The latest announced was the “Bayer Business Plus” project, where the farmers can get advice on setting up business processes in their companies: from risk diversification to company’s management structure optimization. “So far 10 companies have participated in the program, the service will start working fully in 2016,” – says Maxim Yovenko, the head of new marketing solutions development department in Bayer CropScience Company.
To put theory into practice, Bayer CropScience and IFC in cooperation with Raiffeisen Bank Aval and Credit Agricole have launched a promissory notes financing program for agro-producers “Bayer Bill”. In terms of this program, agricultural companies can get a nine-month loan at 4% per year in grivna, which is the lowest rate in the country. So far, 6000 agricultural companies have participated in the program. The program results are obvious. Varodi claims that in all agricultural enterprises that participated in the programs yield has increased and costs have been reduced. For instance, the average maize yield doubled up to15 tons per hectare. “Using the case of a pilot enterprise, one of our agronomists calculated that having improved the crops, the harvest losses can be reduced to $1 million for 3000 ha”, – she tells.
The Point of Growth
In 2015 BASF company, a longtime Bayer’s rival, launched a series of educational workshops for Ukrainian farmers. The Germans are planning to invite for their program “The Point of Growth” 240 Ukrainian agricultural companies’ representatives with a land bank of approximately 4 000 hectares. According to the calculations that were made by Artem Roslyakov, the head of BASF marketing and financial services group, the project will cover about 1 million hectares of farmlands. The program consists of three days of trainings, and on the fourth day the farmers will all meet at the final business forum. On the first day of the program, IFC and BASF experts will talk about key financial performance indicators in agricultural companies. The second session will be focused on business planning and risk evaluation. At the third, final meeting the farmers will be taught to negotiate with investors and bankers. As Roslyakov forecasts, the profitability of the companies participating in “The Point of Growth” will increase by 80% within the next three years.
BASF also plans to introduce their innovative products to the farmers. Yovenko claims that these products can help increase the yield at the farms by one third. Some of these products are real hits on the market. For instance, the fungicide “Pictor” makes rapeseed pods more flexible, so they do not crack or crumble during harvesting, that minimizes the loss. Another invention of the company is the fungicide “Abacus”, which blocks soybeans aging hormone, so the plant photosynthesizes and stays green longer, and as a result, this increases its yield. BASF inoculants, special bacteriological agents, will help a farmer save up on soil fertilizers. “They fix the nitrogen in the soil, so farmers use less fertilizers,” – explains Roslyakov.
There is also a collaborative program of BASF and IFC, designed for funding farmers. Ukrainians may buy plant protection products from BASF on a kind of commodity loan till the harvest. Prices are fixed on the day of purchase and a farmer can repay when the harvest is sold. As the head of IFC Representative Office in Ukraine Elena Voloshina says, that is how large vendors solve the main problem of farmers which is the lack of access to funding sources.
In addition to the desire to educate local farmers, the major agricultural chemistry suppliers have purely business reasons for such courses. The representatives of BASF say that in 2014, due to another crisis in the country, the Ukrainian PPP (plant protection products) market declined by 15%. The farmers were saving on everything. They reduced sowing areas and switched to cheaper protection products. The aim of such transnational manufacturers as BASF and Bayer is to show that their innovative agricultural technologies can make even small farms profitable. In the sphere of their interest there are small and medium-sized agribusinesses which control about 60% of all agricultural land in Ukraine. But the lack of funding prevents them from effective fields’ cultivation. “Global manufacturers consider Ukraine as an interesting market of a great promise and theyare willing to invest in its development,” – points out Varodi.