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  • From: Lawrence London <lfljvenaura@gmail.com>
  • To: permaculture <permaculture@lists.ibiblio.org>
  • Subject: [permaculture] Ukraine agribusiness firms in 'quiet land grab' with development finance | time for local permaculture interests and the global movement to go prime time and get involved
  • Date: Wed, 13 Jan 2016 14:31:32 -0500

[It is time for local permaculture interests and the global movement to go
prime time and get involved; support the ongoing cause of natural
agriculture and the important role permaculture could play - if there are
permaculturists and permaculture organizations already in Ukraine they
certainly need to become stakeholders and get active.- LL]

Ukraine agribusiness firms in 'quiet land grab' with development finance |
Claire Provost and Matt Kennard | Global development | The Guardian
http://www.theguardian.com/global-development/2015/jul/30/ukraine-agribusiness-firms-quiet-land-grab-development-finance
Ukraine agribusiness firms in 'quiet land grab' with development finance
Hundreds of millions of dollars in funding from World Bank’s private
lending arm used to expand industrial farms amid mounting concern about
local effects

Hundreds of millions of dollars in development finance from the World
Bank’s investment arm have helped to fund the controversial expansion of a
billionaire’s agribusiness empire in Ukraine
<http://www.theguardian.com/world/ukraine>, amid growing concern that land
and farming in the country are increasingly falling into the hands of a few
wealthy individuals.

Controlled by one of Ukraine’s wealthiest men, Yuriy Kosiuk, the
agribusiness company Myronivsky Hliboproduct <http://www.mhp.com.ua/en/home>
(MHP) dominates the country’s domestic poultry market and exports chicken
and luxuries such as foie gras across Europe. Since 2010, it has received
at least $200m (£128m) in long-term loans from the bank’s International
Finance Corporation (IFC)
<http://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/home>
.

Much of this funding has gone to support the building of Europe’s largest
industrial chicken farm in the middle of Ukraine’s rural heartland. Almost
300km south of Kiev, the Vinnytsia poultry farm is part of an audacious
effort to transform the country once known as “Europe’s breadbasket” into
its “meatbasket”.

The IFC, which like all World Bank institutions has an explicit mandate
<http://www.worldbank.org/en/about> to end global poverty, says its
investments in MHP have created jobs and supported food security in Ukraine
and beyond. Central to the IFC’s mission is a policy to “do no harm”
<http://www.ifc.org/wps/wcm/connect/b9dacb004a73e7a8a273fff998895a12/IFC_Sustainability_+Framework.pdf?MOD=AJPERES>
and achieve positive development outcomes by investing in the private
sector.

But villagers living near the Vinnytsia project, which is already partially
constructed and in operation, said no one is listening to their concerns
about its impact on their area. They also said that people are being
pressured into giving their land over to the project by signing long-term
land leases.

The project is a massive complex, with slaughterhouses, hen houses, fields
to grow crops to feed the chickens, and incubators for eggs. It is still
expanding, and this expansion requires leasing extra land from nearby
villages in order to construct more “rearing zones” for chickens and
additional grain facilities. The second phase of construction is expected
to be completed in 2017-18
<http://www.mhp.com.ua/en/operations/projects/vinnitsa-complex>.

“There are growing fears about potential ecological and health impacts and
extra pressure on local people to sign land lease agreements,” said Natalia
Kolomiets, environmental protection specialist at the National Ecological
Centre of Ukraine <http://necu.org.ua/en/> (Necu). “It looks like once the
business, the state and the investors are interested in having these
projects, there is really little attention paid to local populations.”

In villages already surrounded by the farm’s facilities, residents said the
smell and noise are overwhelming, and claimed their roads and houses have
been damaged by heavy trucks driving past day and night.

“Before, it was calm and peaceful here,” said one man in the village of
Olyanitsa, pointing at cracks in his brick walls, which he said appeared
after the trucks started driving through the village. “Now everything is
vibrating … look, everywhere, it’s all broken.”

Local NGOs have documented concerns about air, noise and potential water
pollution since 2011
<http://necu.org.ua/wp-content/uploads/Ladyzyn_Report_URK.pdf>, but the
company dismissed the question of environmental concerns, saying it
complies with all environmental regulations. Community leaders in
Ulianovka, a small village on the frontlines of the project’s expansion,
said they have written to the company and to local authorities but that no
one is listening to them.

“There’s no rights, no consultation,” said one woman.

The woman, who did not want to be named as she fears being pressured by the
company, said people in her village, including the sick and elderly, were
being visited at home and coerced into giving their land over to the
project.

“We are nothing for rich people, they don’t want to see us, or hear us.”

Villagers in Ulianovka and Bilousivka said representatives of the company
had visited people in their homes. When asked to respond to villagers’
allegations about home visits, the IFC said: “Land acquisition and
environmental impacts are covered under the IFC performance standards,
which define our clients’ responsibilities for managing environment and
social risks. If there are specific concerns or incidents connected with
this investment, we will work together with the client to help address
them.”

After the dismantling of Soviet and collective state farms in the 1990s,
agricultural land in Ukraine was divided up into small plots of roughly two
hectares each (4.94 acres), and distributed among the population. There is
currently a moratorium on the sale of this land, but it is expected to be
lifted as soon as 2016.

Meanwhile, big agribusiness companies have already been acquiring huge
swaths of land through long-term leases of up to 50 years. This has fuelled
concern over a quiet land grab, where land is de facto controlled
<https://www.boell.de/de/node/280169> by a small group of powerful private
individuals and companies.

Once the business, state and investors are interested in these projects,
little attention is paid to local people
Natalia Kolomiets, environment protection specialist

Some estimates now put the total Ukrainian farmland controlled by foreign
companies at more than 2.2m hectares
<http://www.oaklandinstitute.org/who-owns-agricultural-land-ukraine>. And,
as in many countries experiencing a rush for farmland, domestic investors
are also major players.

Kosiuk, founder and chief executive of the MHP company behind the Vinnytsia
chicken farm, is one of Ukraine’s wealthiest men. In 2014, along with
President Petro Poroshenko and seven other billionaires, he was estimated
to control nearly 6% of his country’s GDP
<http://www.forbes.com/sites/tatianaserafin/2014/07/16/can-ukraines-billionaires-save-the-country/>.
Since 2008, MHP has been listed on the London Stock Exchange, though Kosiuk
remains its major shareholder with 66% of its shares
<http://www.mhp.com.ua/en/investor-relations/share-information/historical-lookup>
.

In Ukraine, his company is pursuing an aggressive strategy to control
production “from field to fork
<http://www.mhp.com.ua/en/operations/integration>”, growing its own grain
to feed its chickens and installing facilities to incubate eggs, slaughter
animals and package meat. Now it plans to increase the amount of land under
its control to 450,000 hectares.

The IFC first invested in Kosiuk’s company in 2003. According to its
website, the IFC has provided MHP with hundreds of millions of dollars in
finance over the past five years alone.

In 2010, the IFC invested $61m in the company
<http://ifcext.ifc.org/ifcext/spiwebsite1.nsf/ProjectDisplay/SPI_DP29204>:
a $50m loan “for crop cultivation and to secure the land lease rights” and
an $11m credit guarantee for “a leasing portfolio of agricultural
machinery”. In 2013, it provided a further $50m loan
<http://ifcext.ifc.org/ifcext/spiwebsite1.nsf/ProjectDisplay/SII32632> to
support “MHP’s growth plans” in the Vinnytsia region.

Last year, the IFC announced a historic $250m investment
<http://ifcext.ifc.org/ifcext/pressroom/IFCPressRoom.nsf/0/CA1B4445BB36F87085257D0100468E23/>
in MHP, its largest deal in Ukraine since 2008. Of this, $100m would come
direct from the IFC’s own books, with the remainder raised in partnership
with other investors.

In a statement, the IFC said it has invested in MHP on commercial terms to
support poultry production in Ukraine, “which has created jobs and promoted
the development of the agribusiness sector, a key driving force for the
national economy”.

It added: “Despite the challenging economic situation, the company
continues with its expansion programmes and, as a result, direct employment
is expected to grow.”

It also said its finance had helped the company improve food safety
standards and energy efficiency. Anastasiya Sobotyuk, head of investor
relations and communications at MHP, said the company complies with
environmental regulations and builds long-term relationships with local
communities, often paying higher-than-market rent for the land it leases.
“Everything is transparent and legal,” she said. “We can’t force people,
because it is our reputation and we are here for a long time and need land.”

Sobotyuk acknowledged that some people were opposed to the project and said
that others might have ulterior motives for criticism. “There are some
people who understand our competitive advantages … and therefore do black
PR campaigns toward MHP.”

Describing Ukraine as a “food basket for the world”, she said the country
had great potential because of its black soil. “We create facilities from
scratch, invest in development of towns and villages: roads,
infrastructure, social. And we want to continue to do so, especially taking
into account the difficult macroeconomic situation in the country,” she
added.

But Kolomiets said funding big farms is the wrong approach for Ukraine,
where small- and medium-sized projects should be supported instead. At
minimum, she said, the IFC should step up its monitoring of such projects
and pay closer attention to the concerns of people living nearby.

The IFC has a formal mechanism <http://www.cao-ombudsman.org/> whereby
communities impacted by its investments can file complaints if they have
grievances. But villagers and community leaders in the Vinnytsia region
said they had never heard of this arm of the World Bank, and that they were
informed about the project when it was already too late to resist it.

“There should have been community discussions before building started, but
there weren’t. They just gathered us and confronted us with the fact that
they were building this,” said one woman, standing near the village school
where she works.

“Had there been a vote, people would have voted against it.”
• *Claire Provost and Matt Kennard are Bertha Fellows at the Centre for
Investigative Journalism. Travel for this article was supported by the
Pulitzer Center on Crisis Reporting <http://www.pulitzercenter.org/>*



  • [permaculture] Ukraine agribusiness firms in 'quiet land grab' with development finance | time for local permaculture interests and the global movement to go prime time and get involved, Lawrence London, 01/13/2016

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