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Animal Agriculture in Ukraine

by Suleman


Ever after the nation obtained independence in 1991, animal agriculture in Ukraine has undergone comprehensive transformation. The second-largest country in Europe after Russia, Ukraine’s main geographical location, environment and its rich soil give it an immense agricultural opportunity. About 70% of Ukraine’s land is farm land with more than half known to be extremely fertile (USUBC, 2008). After independence, Ukraine’s animal agriculture programme seeks to fix main concerns such as: food security, rural development and global competitiveness with the poultry, beef and pork sectors that are most affected. Poultry farming, pig farming, Animal Feed production, Cattle farming and BioEnergy production constitute the main animal agricultural sectors in Ukraine.

The agricultural sector of the country remains a core economic determinant, while the total production of the sector plummeted by 40 percent between 1990 and 2010 (USUBC, 2008). The era also saw the reallocation of capital as a consequence of a competitive advantage, with the proportion of grains increasing at the expense of livestock in production. Statistics show that livestock production suffered extensively between 1990 and 2008, with production declining by 50 percent compared to just 25 percent for grain production (USUBC, 2008). In the forecast duration from 2010 to 2018, the sector is further projected to decline by 18 per cent. In addition, owing to its nature and regulatory system, the country’s Foreign Direct Investment in Animal Farming tends to lag behind other countries. FDI in animal agriculture is estimated to have fallen from over 21 percent in 1990 to just 5 percent in 2002.

Animal Agriculture in Ukraine

Animal Agriculture in Ukraine: General Overview

In general, an estimated 13 percent of the total land area of Ukraine represents permanent pasture land. The figures for 2001 show that there were 9.4 million heads of cattle, 963,000 sheep, 7.6 million pigs, 912,000 goats, 20 million ducks and 103 million chickens (OECD 2004). Around 2004 and 2006, poultry numbers increased by 9 percent, while the number of pigs increased by 25 percent . Within the same era, however, the number of cattle decreased by 11 percent. The nation also grows and raises turkeys, pigs, cattle, rabbits and ducks (USUBC, 2008). The processing of meat is a key component of the animal farming sector in the region, with the 2001 figures showing that 646,000, 591,000 and 239,000 tonnes of beef, pork and poultry meat were produced in 1990, respectively, far less than 1, 986,000, 1, 576,000 and 239,000 tonnes of the same items in the year. Within Ukraine’s animal agriculture market, milk and egg processing are also main segments. In 2001, milk and egg production totaled to 13.4 million and 546,000 tons respectively, (USUBC, 2008). 

            In addition to animal rearing, Animal food production is also a key component of the country’s animal agriculture. Most feed production is for poultry estimated at 2.2 million tones in 2006 while pig and cattle feeds accounted for 850 and 650 tones respectively,(OECD 2004). Animal food production is however highly centralized, with an estimated 30 companies producing half of all feed. Furthermore, the country’s largest producers manufacture nearly all major types of feeds although the tendency to produce feeds for personal needs by farmers has also increased. This has can be attributed to the desire to save cost and to practice contemporary animal breeding techniques within their own farms,(OECD 2004).

Changing Trend

            Although Ukraine has done considerably well in the animal agricultural sector, its full potential is yet to be realized. In beef farming for example, the cattle heard in 2009 was found to be almost 88% below that of independence in 1991. Beef remains the largest meat sector with 900, 000 tones production in 2008. This is followed by pig meat and Poultry meat at 700,000 and 30, 000 tones respectively. Analyses further indicate that the pig heard has also contracted by up to 60% between the years 1991 and 2010. There however have been increases in productivity despite the decline in heard with production increasing by 11% between 1998 and 2008 even though there was a 35% decline in the heard,(OECD 2004).

            Poultry numbers have also fallen considerably within the period with the 2001 flock recorded to be 40% below that of the mid 90s. The output has however increased a trend attributable to better animal farming methods in the sector,(OECD 2004). Broiler production for example grew to become one of the most important meat sectors in 2009 contributing 690,000 tones into the market, (USUBC, 2008). The growth is further projected to grow by 20% by the year 2018. The apparent decline in agricultural animal population is attributed to lack of finances to facilitate the buying of fuel which in turn pushed farmers within the public sector to sell their cattle to foreign buyers especially within the Asian market. Other factors contributing to this negative trend include the greater use of processing facilities located within the farms, decentralization of meat processing, lack of credits to purchase animals, and antiquated meat processing equipment. The aggregate situation beyond the year 2010 is predicted to be positive with increases in the numbers of poultry and pigs and an improvement in the numbers of cattle, (USUBC, 2008).

Cattle Farming

Cattle farming primarily define two key industries; the dairy and the meat industries. In Ukraine, most of the milk-producing Farms are located in Central and North-Western regions of the country. Official 2007 statistics indicate that Ukraine has an estimated 600 dairy plants and 3,700 milk-producing enterprises. These farms however produced below 20% of the total national volume of raw milk,(RealUkraine, 2010). Cattle farming have witnessed rapid decrease in the Country’s number of cows following the restructuring of the sector which has been undertaken for close to two decades. The rapid decreases have been for objective reasons, since while large agricultural farms which were former collective agricultural enterprises attempted to get rid of loses generating low profit activities, small scale rural residents were growing relatively stable levels of dairy and beef livestock to earn a living.

This enabled more cows to be grown within the individual subsidiary household which are at present, fundamental suppliers of dairy and meat products to both the processing industries and the local population. As noted above, the Central and North-Eastern regions of Chernigiv, Poltava, Cherkassy and Kyiv have the most significant numbers of cows which are concentrated at agricultural enterprises,(RealUkraine, 2010). It is imperative to note that within the central regions, the north-east and the north livestock production is specialized in breeding cattle for dairy purposes with meat being a secondary product. All Ukrainian oblasts, other than Chernigiv, have experienced a decline of dairy livestock within the past two years 2008 to 2010.

Proposed Changes and Recommendations

            Evidently, cattle farming has seen a decline hence a policy to reverse the trend would be in the best interest of Ukraine. Critical factors that have changed the cattle numbers have been documented as expensive feeds, lack of labor, periodic sector restructuring and unstable livestock purchase prices. Presently, the Ukrainian animal breeding market remains under-financed since budget funds are not allocated properly to support the most relevant sector development programs. Most of the financing is provided via the VAT reimbursement furthermore procurement meat prices regularly change and often fluctuate and decline abruptly making it risky to practice animal breeding. Price hikes cannot be afforded by small and middle privately owned farmers who constitute the biggest share of livestock in Ukraine.

The Ukrainian government should establish indemnity insurance for cattle farming owing to the stability in the sector. As noted above, periodic sector restructuring and unstable livestock purchase prices put farmers at risk of loss due to unpredictability yet the country has no uniform government-backed insurance programs for animals,(OECD 2004). This certainly put cattle farmers at risk of catastrophic losses arising from market loss, destroyed animals and business interruptions arising from animal health events. The government also ought to address, via a policy, financial risk management of animal diseases. The state in partnership with private farmers should put in place an effective and efficient financial risk management tools to deal with any potential animal disease epidemic.

Poultry Farming

Poultry production in Ukraine is highly concentrated with 2 major vertically integrated companies dominating the market,(BG Capital, 2010). The two companies control approximately 70% of the total production, furthermore, the past year has seen the companies invest significant resources in attempts to further integration,(BG Capital, 2010). A good proportion of their investment went to the acquisition of arable land to produce fodder crops for the company and for facilities processing semi-cooked poultry products. The investment further went towards expansion through newer and bigger slaughterhouses and production facilities. Aggregately, 2010-2011 production is expected to grow at the rate of 20-25% similar to that of the 2009-2010 production periods. This positive trend is attributed to the fact that, the existing production facilities came fully into operation at the optimum projected capacity.

Myronivsky Khiliboproduct is the biggest and most dynamic company in the poultry farming in Ukraine, (BG Capital, 2010). As of 2008, the company not only finished its internal restructuring process by 23.4%, but was also listed in an IPO at the London Stock Exchange. The sale of the company’s 19.4% shares gave an additional capital of $ 322 million hence the company was estimated at $1.7 billion hence it has a significant space for future growth. The second-largest company, Agromas, is considerably smaller than Myronivsky Khiliboproduct and has not shown signs of ambitious countrywide expansion.

Proposed Changes and Recommendations

Excluding the two major companies, there remains an untapped potential in small and medium-sized poultry farming in the country. The government should award small loans to farmers to enable them to acquire new sites to build individually or collectively slaughter and feed facilities.  Besides, as a result of large production and processing, operations within the poultry industry require concentrated workforce who are often underpaid and recruited from the locale,(BG Capital, 2010). Therefore, in areas in which the two major companies have their processing plants, their productivity is often dependent upon the community’s ability to meet the needs of processors and producers.

Potential strategies to improve the Ukrainian poultry industry include; additional funding be given to the relevant government bodies so as to carry out, formulate and implement comprehensive industrial policies that not only consider animal agriculture, but also integrate effective community development policies,(RealUkraine, 2010). Additionally, the government should streamline poultry farming regulatory processes and also focus on rural economic development to enable more small scale farmers carry out poultry farming. The government should also award additional funding aimed at improving rural economic development as this will by extension enable more small scale farmers to engage in poultry farming. The government should also draft and implement policies that would make use of regional economic development resources.

Pig Farming

Pig farming is a key component of Ukraine’s animal agricultural sector with the top pig breeding regions being Kyiv, Vinnytsya, Cherkassy, Dnipropetrovsk and Odessa. Comparative to other animal agricultural sectors in the country, the pig sector remains one of the most promising as a result of rising demand, state support and few strong competitors. Ukraine has an estimated 13,000 pig production sites with an altogether population of 6 million pigs. Yet only 36 of the 13,000 production sites are considered large and commercial sized. Additionally, the country has about 3 million microsites with only a few animals furthermore, the country has cheap labor, good management skills, housing and knowledge and low level breeding materials all of which considerably favor pig farming. At present, local pig production sites use low-quality breeding materials hence high-quality housing and breeding materials are also on-demand.

Proposed Changes and Recommendations

There has been insufficient support for government programs which seeks to promote programs aimed at encouraging the development of the pig industry. USUBC (2008) contend that bureaucracy and lack of both concrete policies and independent magistrature has made the situation more unpredictable. Yet opportunities are plentiful with the stable demand for pork within the region, few strong competitors and a generally underdeveloped market. At present, majority of slaughterhouses and processors have technology backlog. The underproduction has also been attributed to considerable uncertainties which surround the industry such as price politics, consequences of bird flu, instable export situation and illegal imports and exports. Besides, the existence of economic preference zones have given domestic companies an advantage to import cheaper meat. 

Extra is required to develop new scientific tools and technologies that would assist in pig rearing and pork production and processing. This would also enhance pig disease prevention, detection and diagnosis in Ukraine. More work within the current animal health framework to evaluate, implement rapid prevention strategies and validate effective teaching methods would help protect each of Ukraine’s pig population.  Since unhealthy competition arising from illegal imports is a key problem facing pig farming, the government should provide funding and personnel to strengthen border protection systems regarding the transfer f unnoticed animals and regarding the importation of processed pork.

Additional Recommendations

            Additional funding needs to be channeled towards agricultural machinery which although is slightly improving, only an estimated 80% of machinery used within farms are functional. Researchers indicate that Ukraine’s agricultural machinery is 80 to 90% deteriorated.  The government should also consider funding programs aimed at ensuring local machine building. Although Ukraine has considerable local machine-building potential, the sector remains mostly privatized furthermore the government lacks a clear policy to support and subsidize local manufacturing. Besides, an estimated one third of local produce are short of domestic demand as a result of low solvency of any potential clients, (Armbruster, Halbrook and Thompson, 2006).

            Presently, Ukrainian animal agricultural sector has experienced considerable setbacks due to lack of consistency in its national trade policies aimed at protecting the country’s animal produce. The lack of consistency creates inequalities in trade among local and international trade partners hence the government should put forward a policy that eliminate this artificial trade barrier thereby allowing increased competitiveness, (Julie, 2006).  Also, the government should come up with plans for improve the flow of information within the general public since majority of stakeholders within the animal agricultural industry have developed clear public position aimed at improving the sector’s productivity and well being. Information sharing would ensure that policy statements and positions that are not always available to the public would be accessed by them, (Armbruster, Halbrook and Thompson, 2006).

            Additional research in education would also enable the country to improve the productivity of its animal agricultural sector. Assigning higher priority to animal agricultural issues especially focused at solving local problems and increasing funding currently available to researches focusing on animal breeding and husbandry, processing methods and farm facilities would encourage the development of animal agricultural practices which are both economically viable and practical as in the case of the United States, (Armbruster, Halbrook and Thompson, 2006). The government should also develop public extension program that focus on animal farmers, employees in animal products industries and ranchers. 


Evidently, animal agriculture in Ukraine has across the years adapted to change adjusting to new production systems that reduce costs and resulting into new products to meet ever-changing consumer preferences. Irrespective of the individual sector, contracts have increasingly replaced open markets furthermore, technological development have served to increase productivity at all levels; be it within the farms, in processing, in marketing or even the distribution systems. Good animal agricultural practices should not only be concerned with profitability, but also operate within a framework of higher standards; such as better legislation. Conclusively, all policies should be practical and aimed at modifying existing production, processing and handling systems so that they respond to both consumer concerns, the country’s agricultural sector’s growth expectations, producer’s expectations and also consider animal welfare in a cost-effective way, (Greger, 2010).

  • Armbruster, W. J., Halbrook, A. S. and Thompson, M. M. (2006). The Future of Animal Agriculture in North America. American Agricultural Economics Association, 21(3).
  • BG Capital. (2010). Ukrainian Agriculture: Farming Fortune. BG Capital. Retrieved April 12 2010 from:           http://sintalagriculture.com/uploads/files/BG.pdf
  • Julie, M. (2006). Benefits of Animal Agriculture to Rural America. United States Department of Agriculture, Agricultural Outlook Forum 2006 no. 33279.
  • Greger, M. (2010). Transgenesis in Animal Agriculture: Addressing Animal Health and Welfare  Concerns. Journal of Agricultural Environmental Ethics, 1(1) 1-22.
  • OECD. (2004). Achieving Ukraine’s Agricultural Potential: Stimulating Agricultural Growth and Improving Rural Life. Organization for Economic Corporation and Development. Retrieved April 12 2010 from: http://www.oecd.org/dataoecd/39/31/34031855.pdf
  • RealUkraine. (2010). Agriculture of Ukraine-Characteristics of Market: Dairy Industry: Pig Industry and Poultry Industry. Realukraine.com
  • USUBC, (2008) Agriculture in Ukraine: Build-Up: A Flexible and Reliable Approach.Retrieved, April 12 2010 from: http://www.usubc.org/reports/ShmorhunUkraineAgPresentationUSUBCApril09.pdf

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