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30 Sep 2024

LFM 2024: European integration and innovative agricultural future of Ukraine

On 12 September, the Ukrainian Agribusiness Club Association and UCABevent agency held the XV International Conference “Large Farm Management” (LFM). This conference has become not only a unique business conference for Ukraine and Europe, but also a platform that demonstrates the resilience of the Ukrainian agricultural sector during the turbulent years. The event was attended by more than 400 top managers of leading agricultural companies, efficient producers and processors of agricultural products, leading investors and industry experts, representatives of resource and service companies, and innovative start-ups.
The official opening of the conference began with welcoming remarks by Mykola Mazanyi, CEO of CNH Industrial Ukraine LLC, and Vladyslav Bolokhovsky, CEO of BTU Group, PhD in Agriculture. They emphasized how critical it is to continue to unite, exchange views and experiences, implement various initiatives, and maintain a dialogue with the authorities in order to maintain leadership in international markets.
Taras Vysotskyi, First Deputy Minister of Agrarian Policy and Food of Ukraine, opened the plenary session with a presentation on the impact of Ukraine's future accession to the EU on the agricultural business. He drew attention to the fact that European integration should be viewed from two aspects. Mr. Vysotskyi said: “Although accession to the EU is associated with numerous costs, both direct (investments in modernisation) and indirect (abandonment of highly productive but prohibited practices in the EU) with the possibility of access to European funds, the agricultural sector will receive long-term benefits in return — greater access to EU and US markets, the possibility of attracting investment, and broad participation in EU support programs. However, in order to obtain these benefits, it is necessary to focus on transforming the industry, in particular, in the use of only permitted pesticides, improving animal welfare, and regulating GMOs and carbon footprint.”
A logical continuation was the panel discussion “Ukraine's Agricultural Sector on the Road to the EU”. Oleksandra Avramenko, Head of the UCAB European Integration Committee, noted that Ukraine is strengthening its position in global markets, with the agricultural sector's export potential reaching 61% of Ukraine's total exports in 2023, up 20% from 2021. Ukrainian agricultural products are exported to about 170 countries, and the share of exports to the EU was almost 57% as of 2023. This means that European integration is currently one of the most relevant areas for the agricultural sector.
“As of September 2024, despite the heated political discussions among European countries, Ukraine still has better access to EU markets than it did before the full-scale invasion. Even partial liberalisation for 7 agricultural products is a good achievement for Ukrainian exports. However, agricultural companies need to look to the future now and start preparing for the European integration process, develop trade as much as possible, implement EU standards in production, participate in discussions within the EU, and firmly define and argue their positions,” said Taras Kachka, Deputy Minister of Economy of Ukraine – Trade Representative of Ukraine. This opinion is shared by Alberto Fernandez-Diez, Head of the Trade and Economic Section of the EU Delegation to Ukraine, who emphasises that the more Ukraine complies with EU rules and regulations, the faster trade liberalisation will take place and Ukrainian farmers will have greater consistency and predictability. At the same time, Christian Ben Hell, Head of the Agriculture, Fisheries, Forestry and Food Safety Sector at the EU Delegation to Ukraine, adds: “The bigger the economic player a company or enterprise is, the faster they will be expected to adapt to European standards. Grant support for less economically powerful agricultural companies should be quite broad, but expectations for compliance will also remain high.”
Oleksandr Haidu, the Chairman of the Verkhovna Rada Committee on Agrarian and Land Policy, spoked the results of fulfilling European integration commitments, outlining three blocks:● the third stage of land reform is the development of a new draft law on the consolidation of land;● financial mechanisms to support Ukrainian farmers — the introduction of a draft law on the establishment of a Payment Agency, which should be included in the extension of the State Agrarian Register and is also listed in the Ukraine Facility;● continuation of legislative regulation of food safety issues, as new EU regulations require a new version of the Law on Veterinary Medicine and Wellbeing of Animals, the Law on State Control.
The second panel discussion of the conference was dedicated to the topic of “Double standards of automation: a trend or real benefits for agribusiness?’’. The discussion was moderated by Oleksandr Andronik, CEO and co-founder of Sales'Up, together with Nazar Malyniak, partner at SmartFarming, Viktor Valchuk, director of the land resources department of Continental Farmers Group, and Dmytro Barabin, head of the legal department of Cygnet, Oksana Pokotynska, Head of Development and Innovation Projects of MHP's Agribusiness Directorate, and Daniil Podkopaev, CIO of Group DF OSTCHEM, considered the very concept of automation, its recipe for success, discussed how to assess the return on investment in changes and when is the best time for such changes. Among the main theses of the panel:● the need for automation projects should be analysed — not everything that is fashionable is a necessity;● when implementing automation, companies should prioritise integration of this process into the company's strategy, responsible choice of a model that allows for scalability, and focus on people, not technology;● companies that are already successful in automation should share their experience with others to raise the level of automation in the agricultural sector;● a land bank management system is, if not a must-have, then a solution without which it is impossible to imagine the future of an agricultural company;● the most effective solutions are integrated solutions that accumulate information from a variety of external sources, allow for historical data, the company's potential and characteristics, and help management make informed decisions.
In the afternoon, the participants were treated to a presentation on “Agrarian innovations: the future with regenerative technologies and digital solutions to unlock the potential of crops” by Ivanna Bondarchuk, Head of Marketing and Regional Market Development of Bayer. “Digital tools based on data analysis allow farms to optimise resources and maximise yields through informed and effective decisions. At the same time, informed decisions optimise investment and resource use. For example, predictive modelling allows us to select hybrids, varieties and seeding rates according to field conditions, while digital scouting identifies problem areas and issues. In addition, in the process of European integration, the ResiYou AI pesticide residue forecasting model deserves special attention, as it displays the situation with residues in real time,” said the speaker.
The discussion of innovations continued with the presentation ‘What technologies will help agribusinesses to be more efficient?’ by Andrii Zhelezniak, Director of Analytical Products and Services of Kyivstar. He shared his observations on the relevance of major technological trends to the challenges of the agricultural sector: “In a time of war, when there is a constant risk of logistics disruption, loss of personnel, deterioration of soil quality and the need for land clearance, as well as global challenges in maintaining efficiency, competitiveness and modernisation, modern technologies can play a key role in doing business. Currently, the following technology trends are expected to be in the forefront in 2025: the Internet of Things, robotics, artificial intelligence, agrodrones, precision farming, agricultural biotechnology, big data and analytics, and connectivity technologies. All of this allows us to increase the profitability of fields, optimise transportation routes, and forecast demand and prices for products.”
Prof. Alfons Balmann, Director of the reputable German institute of IAMO, raised the issue of “Greening of European agriculture: prospects and challenges for Ukrainian agribusiness”, in which he considered the uncertainties and potential scenarios of the EU's greening course caused by recent political events and farmers' protests: “The EU is now forced to reconsider its views on environmentalisation and the green course. This is due not only to the pressure of farmers' protests, but also to global and regional changes: international competition, which requires increasing the profitability of EU farms, mitigation and adaptation to climate change, technology and innovation, demographic changes and the transformation of consumption patterns. In the process of uncertainty about the transformation of the future of the European Green Deal, Ukrainian farmers should implement sustainable practices, but remember that organic production is more of a niche than a mainstream.”.
During the panel discussion “The European Green Deal in Ukraine: Perspectives of the Agricultural Sector”, moderated by Olena Kovaleva, Senior Communications Officer of UNIDO Ukraine, it was found that the Ukrainian agricultural sector is only beginning to adjust to the EU's Green Deal. “At the government level, there are some attempts to create specialised organisations to implement the course, but these changes are at an early stage. We need to have not only an institutional structure, but also institutional memory for negotiations with the EU, as well as the involvement of the business sector, which could provide real figures for the investments needed for change,” said Lyubov Akulenko, Executive Director of the Ukrainian Centre for European Policy. In addition, according to Marta Trofimova, Head of Sustainable Development of Kernel, it is important to find drivers and motivation, for example, understanding what additional cash flows and opening of new markets “green” changes can bring. Some large agricultural holdings have already formed a vision and are setting up specialised departments to plan the green transition and analyse its prospects.
Tatiana Khomenko, BTU Commercial Director adds: “Not all of us are ready for the green course, particularly in the area of pesticide bans and certain crop protection products, so we need to consider alternative substitutes that are widely offered by the bioproducts market. And a kind of benefit is that the use of biological products helps to increase soil carbon and biodiversity.” At the end of the discussion, Viktoriya Kireeva, Deputy Minister of Environmental Protection and Natural Resources of Ukraine, concluded that in order to understand where agricultural companies should move, there should be a general state strategy. This is currently being developed and will soon be subject to public hearings where each business will be able to make its own adjustments.
Another pressing challenge is raiding, which is something that is better to never encounter, but which is worth knowing everything about. Therefore, the conference featured a case study on “New Means of Business Protection and Development with the Help of National Depository Solutions” by Vasil Kisil & Partners partner Volodymyr Igonin and Marina Adamovska, a member of the Board of the National Depository of Ukraine. The speakers are convinced that custodial accounting of shares is a reliable protection against raiding, since the share is not stored in the register but in an account in the NSD's accounting system, only the NSD or a depository institution selected by the participants has access to the account with the share, and the depository institution knows its client “by sight”.
The presentation of the State Property Fund's Land Bank Project — Lease of State Agricultural Land by Igor Tymoshenko, Deputy Head of the State Property Fund of Ukraine, was a source of knowledge about new state opportunities. “Ukraine had a critical need to reform the state land market, as without changes we had budget shortfalls, corruption, and the decline of research enterprises and institutions. Now everyone will have the opportunity to participate in land auctions with sublease terms for 14 and 25 years for annual and perennial plantations, respectively,” the speaker explained.
The final part of the conference was a panel discussion “Agroinvestments in the time of war: Challenges, Strategies, Opportunities” with the participation Alex Lissitsa, President of UCAB, Oleksandr Verzhykhovsky, CEO of IMK, Kateryna Rybachenko, member of the Supervisory Board of Agro-Region, UCAB Vice President, Yevhen Osypov, CEO of Kernel, Liliya Lymanska CFO of Astarta-Kyiv, and Serhiy Dobrohorsky, MHP Deputy Chairman of the Board for Agribusiness. The following points were made during the discussion:● when choosing investment areas, one should try to maintain consistency and follow the company's strategies, develop a competitive advantage that is sustainable at all times of the organisation's activity;● investors expect certain guarantees, and the investments and funds made should be protected;● investments should support the stable functioning of the company, reduce risks and free up funds for donations;● large players can invest in long-term projects only if they understand the development strategy, if they speak.
The exhibition area was open throughout the conference, with company locations: SmartFarming, Sales'Up, BTU, ALFA Smart Agro, Kyivstar Business, INGO, Dobrozem, Eridon. The highlight of the event was special badges that can be used to grow flowers by planting them in the ground. In this way, the conference organisers emphasised a socially responsible attitude to nature and drew attention to the resilience of Ukrainians who, even in times of war, continue to take care of the beauty around them by planting flowers. 
For fifteen years in a row, the international conference “Large Farm Management” has been promoting the development of an informed agricultural community, creating profitable business cooperation and providing an opportunity to present advanced developments to a wide range of professionals. The team of the Ukrainian Agribusiness Club and UCABevent agency would like to thank the event for its support: New Holland — exclusive technical partner, BTU — exclusive biotechnology partner, innovative partners — SalesUp and SmartFarming, Kyivstar — business partner, Credit Agricole Ukraine — exclusive financial partner, Alfa Smart Agro — partner of smart solutions in agronomy, Vasil Kisil & Partners — legal partner, Bayer — gold partner, silver partners — LNZ and Syngenta, AgroPortal — general internet partner, information partners: Growex media, GrowHow, Agroexpert, AgroElita magazine, AgroTimes, IFarming, Agribusiness Today, AgroPravda, Agriteka, Agrichain and Aggek platform.

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