INTERVIEW ▶▶▶
Ukraine is exporting a lot of poultry but has to import pork. Why is that? “Import dynamics are hard to predict, as they are always linked to market conditions. High prices on the domestic market are a guar- antee that there will be foreign supplies. In the past few years, pork imports amounted to 6% of domestic production; if other pig industry products are also taken into account, that figure amounts to 15.5%. We hope these figures will not change. “Exports are weak, although the work on opening new markets never stops. Following several years of negotiations, an interna- tional veterinary certificate on pork exports to Singapore is now in the final stage of approval. “To expand the list of export markets in the context of the contin- uing ASF spread, the Association of Ukrainian Pig Breeders and the Food and Agriculture Organization (FAO) have developed a legisla- tive base for compartmentalisation. European countries apply the zoning principle, but in Ukraine, ASF was registered in every re- gion. The compartment status is granted to companies that can prove that their biosecurity systems (for farms) or traceability sys- tem (for meat-processing plants) is top level. This means that irre- spective of the epizootic situation in the country, their products are safe and have good quality. So far, no companies in Ukraine have achieved that status; work is still ongoing.”
How do you see the future of backyard farms? “Pig breeding in Ukraine is a traditional job for the rural population, not only for personal consumption but also to sell the meat. Never- theless, in the past few years, the pig population in this segment has shrunk by 7.5% per year on average. In 2015, we had 3.6 million pigs in backyard farms; in 2020, we have only 2.43 million head. “This trend is a consequence of urbanisation, labour migration and ASF. Besides, these days people pay more attention to economics. Resources and labour are not paying for themselves. “A prohibition on selling meat slaughtered at home, to come into force in 2025, could be another key factor to accelerate the nega- tive dynamics. From the point of view of product safety, this is the right decision. And yet, it is also complex due to the social aspect.”
How would you describe the industry’s investment attractiveness? “Over the last few years, the pig breeding business in Ukraine has been relatively marginal. Alongside the rather effective market players whose profitability is sky-high, there are weaker companies operating with zero profitability or even suffering losses. In terms of production costs, Ukraine’s companies are not able to compete with US and Brazilian farmers. However, the production cost level of Ukrainian farms is similar to that of their European colleagues. “Internal investors are ready to develop the pig business. Accord- ing to an opinion poll conducted by the Association of Ukrainian Pig Breeders earlier this year, out of the 100 biggest companies, which jointly keep 2.3 million head of pigs or 71% of the industrial pig population, more than half expressed their readiness and desire to invest in expanding production capacities soon.
20 ▶PIG PROGRESS | Volume 36, No. 8, 2020
“Foreign investors are more careful. ASF and the conditions of do- ing business in Ukraine are scaring many away. But we do have quite a few successful projects as well. For example, there is a company with Danish investments. Its share of the country’s in- dustrial pork production is 13%.
How successful has Ukraine been in tackling ASF? “The number of outbreaks fell, after a peak of 163 cases in 2017, to 145 cases in 2018, 53 in 2019, and 12 in 2020. That is linked to the Covid-19 pandemic, as both human and transport movements have largely been restricted. “The main obstacle in fighting ASF is the absence of a compre- hensive pig identification system in backyard farms. This means that animals are grown without any control by veterinary services, and their transportation is not subjected to control either. Conse- quently, in the event of an ASF outbreak occurrence, it will be hard to deal with it effectively. A legislative framework and a sys- tem of penalties is currently being developed. However, given the social aspect, it is hard to build that system.”
What changes do you expect to see in the future? “Before the 2014 crisis, pork consumption in Ukraine was grow- ing, from 14.2kg per capita (18kg, if other pig industry products are taken into account) to 17.8kg (21.3kg) in 2013. Over the past five years, we have seen positive dynamics again, so consumption reached 14.85kg (18.2kg) in 2019. “Numerous factors will influence the further dynamics of pork con- sumption in Ukraine. The main one is the general economic situa- tion in the country. Nowadays, customers are closely following product safety, quality, production conditions and taste parame- ters. The task of pig farmers is to prove that their products meet all the necessary criteria. Together with the FAO, we are working on developing industry standards on growing pork without antibiot- ics. This will be our first step towards consumers and definitely not the last one. The industry’s future is determined by demand, and in the modern world, we need to compete for customers.”
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