July 25, 2012

Black Harvest

The Ukrainian government announced that grain harvest was 20% lower than it was anticipated. Though bad news came as a surprise to the Ministry of Agrarian and Food Policy, the UN's Food and Agriculture Organization (FAO) talked about it for a couple of last months. In June the FAO predicted that Ukraine's grain production will fall to 46 mln tons, 18% below the previous year, because of unfavorable weather conditions. 

I am sure that Ukraine's total grain output will be lower than it's anticipated now due to drought and lack of irrigation system. Needless to say, most Ukrainian farmers still rely on the two-rain rule to harvest their crops despite all advancement in the modern agricultural technology. They rely on favorable weather conditions because they lack funds to rebuilt irrigation system that was dismantled in the early 1990s during the transition period. 

But I am afraid that Ukrainian farmers suffer more from lawlessness than from the current drought. The main issue is the so-called black harvest. In a nutshell, small-scale farmers are forced to load trucks with their grain for free. It's the so-called black harvest. The black harvest trucks operated by thugs, allegedly from Donetsk region, show up when a farmer harvests his crops. Thugs take grains by force and load them in their trucks. Farmer is left with nothing. If farmer cannot recuperate his losses, he will go bankrupt. 

If you wonder why farmer doesn't call police, the answer is quite simple. It does not change anything. If the local police receives this call, they have to check with their headquarters whether someone is behind the stickup operation. Their headquarters has to check with other law enforcement offices at district level, city level, and province level. By the time they are done with the so-called background check, thugs are gone. But you cannot blame cops for their inefficiency. Cops and farmers have to play by the same rules.If cops arrest well-connected thugs, they will loose their jobs and they will be also fined. 

What causes these unfavorable business environment? It's also drought. Other kind of drought. The Ukrainian elite is running short on cash that it needs for the upcoming parliamentary elections. To get cash, they do what they do the best - rob hard-working people.


  1. It's not a Pareto improvement.

  2. So herein is contained why we had no
    posts from Leo while he was in Ukraine.

    Where are the names and political offices
    invovled? Do you expect them to chase
    you in Texas?

    Maybe you need to create an blind alley
    to tell the story?

    The story needs to be told. Since you
    are capable, the burden falls on you...

    Ah! the burden of leadership.