How big agroholdings “kill” villages

How big agroholdings “kill” villages

And how farmers, conversely, breathe life into them. The experience of Lazirky.

— Yes. Kernel bought the village council building, — the village head Oleksandr Kovalov tells me. — They rent the rooms to us for one hryvnia. But the situation is far from the best. The Ukrainian village, smashed and miserable. A land market could make it prosperous. But it must be well thought out, and the rules and the state should support small and medium-sized farms.

How it works will determine not only the welfare of its residents but also the political situation.

Journalists from the outlet TEXTY went to find out how life and the rural economy are organized in Lazirky in the Poltava region. There you can see Ukraine where the land is owned by agroholdings, and Ukraine where the village’s main producer is farmers.

Life in Lazirky instantly plunges you into depression

Poltavshchyna — that’s how locals in Lazirky pronounce their region, with the stress on the last syllable. It’s near Lubny; Orzhytsia district. Currently they number about three thousand residents; mostly descendants of peasants serf-bound in the Hetmanate. Gogol’s mysterious smile will linger before your eyes long after Lazirky. But more on that in order. Plainly.

Land

An agricultural holding dominates here. It is a large land renter, not yet a full owner. Its land bank, that is the land it cultivates in the usual sense, is six hundred thousand hectares.

Some villagers, owning shares from the former collective farm, have for years leased them to the holding or to farming households.

The rent price for four hectares of land is the same at the holding and with Lazirky’s farmers — fifteen thousand hryvnias annually. That’s before tax. However, it’s not smooth here either. The shareholder pays one thousand five hundred to the state as a fee for owning the soil. The contract is for 10 years and can be terminated only through the courts. Not all Lazirky residents own shares; teachers and other public-sector workers didn’t receive land.

Besides payments, the renter also undertakes to plow the owner’s kitchen garden of forty sotkas once or twice a year.

Distrust

These 15 thousand a year or a bit more 1 thousand a month do not make villagers wealthy. People leave for more comfortable places. Like holes in a ship, ruined and abandoned homesteads catch the eye.

— Hey, stop! Who are you?! Are you gathering kompromat on me?! — I hear a voice behind me as I photograph one of the houses.

The owner of the local shop almost lunges at me with fists because the ruined dwelling stands on her wide yard.

I explain that an abandoned home interests me as a historian. Our quarrel turns into a conversation.

They’re pressing everyone! — he protests. — Once they sell the land — that’s it! And these slaves — they will be silent!

The man’s words unsettle me. But a little more — and I almost believe the assessment of a random interlocutor.

Caution reigns in Lazirky. Residents stop talking as soon as they hear I’m a journalist. Despite all the changes that have swept Ukraine, here a shadow of Soviet totalitarianism—or even serfdom-like lawlessness—seems to prevail.

— Don’t be angry at my fellow villagers, — asks a native of Lazirky Nadya Pyrkalo. — They are heroic! Two years ago they rebelled when the local agroholding opened a seed-treatment plant in the village. There they treated seed grain with health-hazardous agrochemicals. And people won! They blocked the Kyiv–Kharkiv highway, walked on foot to the capital!

Indeed, this story of civic protest is even commemorated in Lazirky with a monument. Discontent has not subsided. The last time people gathered was to voice their outrage against the holding’s trucks that destroy rural roads so much that even house walls crack.

“Kernel”

That is the name of the holding. But the name does not matter; in villages where the surrounding land is farmed by other large holdings, the situation is similar. Of the several dozen Lazirky residents who described the village situation to me as an outsider, none spoke well of it.

— Scoundrels! — one of the men on the street says about the company’s management.

Talk about Kernel is on everyone’s tongues. The name has acquired a mythical image, like a nineteenth-century serf-owning master, distant and unseen, from Saint Petersburg.

Although Kernel has real owners. The largest is Andriy Verevskyi, a former MP from Yulia Tymoshenko’s bloc and later the Regionals. A native of Poltava, this magnate through agribusiness became one of Ukraine’s wealthiest entrepreneurs.

His career began in the 1990-ties, when, according to Dzerkalo Tyzhnia newspaper, his father was a trusted agent of Social Party leader Oleksandr Moroz in the presidential elections.

Recall that Moroz was speaker of the Verkhovna Rada. He actively opposed the introduction of a civilized land market. Incidentally, Lazirky residents used to loyally vote for the Social Party. For example, in the parliamentary elections of 2002 year 33% of Lazirky voters voted “for Moroz” — the highest result among all parties.

So Kernel is ever on Lazirky residents’ lips, and Verevskyi’s name is known to them too.

— He lives in Switzerland. He doesn’t care about us, — villagers believe.

Finally I get to meet the holding in the two-story building that also houses Lazirky’s village council. I am surprised that Kernel’s corridor of offices is opposite its cramped rooms. Usually administrative buildings in the country stand separately.

Meanwhile one of the council workers stuns me:

— All three little rooms of the village council also belong to Kernel.

— Meaning?!

In the Head’s office

— Yes. Kernel bought this building, — village head Oleksandr Kovalov tells me. — They rent the rooms to us for one hryvnia. But the situation is not the best.

— So what are your relations with the holding? — I ask.

— What relations?! Kernel doesn’t help. Local farmers themselves concreted a stretch of road. And they only dismantled the equipment from the tractor brigades that they bought with the collective farm property. How will villagers cultivate the land without equipment? Now they only lease out and hand over shares.

— But the holding pays taxes that replenish your budget, — I counter.

— The village budget is two million hryvnias, — Kovalov answers. — Of that, from Kernel only 350 thousand. About half of that sum is from large farmers. There are only three of them.

Assessing Lazirky’s territory, it’s easy to conclude: “You can’t get far with such funds.”

— But Kernel also has two elevators here. People get salaries… — I press.

— Only one hundred to one hundred fifty villagers work there. We don’t have good salaries, — Kovalov answers.

I also hear from locals: “The holding’s fields are worked by equipment that appears from who-knows-where and disappears back there; local people don’t work on it.”

Perhaps my role as Kernel’s “advocate” makes him wary. Having thrown in the standard meme that the land belongs to Ukrainians from Cossack great-grandfathers, the head falls silent.

“The little person”

The reason for caution in Lazirky becomes clear as soon as I move from the village council rooms to Kernel’s offices opposite.

There I am met by an empty corridor. Of the two rows of doors along it, only one is open. It bears a homemade sign reading “Prydniprovskyi Krai” — a subsidiary of the holding.

— Wait, a person has come, — says the only employee sitting at a desk in the spacious room into the phone.

All I learn: her name is Oksana. This neat woman against the backdrop of a shabby village does not answer further questions.

— In that case who will comment on village relations with the holding? — I ask.

The Kernel representative suggests I seek comment from the holding’s central office in Zolotonosha, Cherkasy region.

TEXTY reached out to the company’s central office for comment. They told us they would find someone responsible and call back. We are waiting.

I go out, buy coffee and walk, sipping it from a plastic cup. Suddenly the whistle of a gray jeep braking sharply beside me makes me turn.

— I was told you’re asking about Kernel! What do you want?! — a young man in black shoots out. Jumping from the jeep, he rushes toward me. — Show me your documents!

Kernel security reacts instantly to journalists.

Dazed, I ask the young man to identify himself.

A security ID flashes before my eyes with the name Artem. A minute later he informs someone by phone about me. I immediately conclude: it’s wise to keep distance from the Kernel people. Now one of my IDs makes the new acquaintance cool down.

For free

I observe Artem patrolling Lazirky’s streets until evening. The described behavior of the holding’s employees can do nothing but alarm villagers. Meanwhile they have many stories about Kernel.

At Lazirky Vocational School, which trains tractor drivers and combine operators, they are perhaps best acquainted with agricultural problems. Its deputy director “Sashko,” as he asks to be called, reveals some of them to me in the dormitory guard’s room:

— We train about two hundred specialists across all courses. But the holding doesn’t need our guys: tractor drivers, mechanics, combine operators — they are essentially unnecessary.

Guessing that the vocational school may produce specialists far removed from the latest agrotechnologies and market needs, I ask:

— Why is that?

— The market has large enterprises that provide technical services to big agrarians. They have the most modern equipment. Ten combines can run field after field.

— So demand for your specialists disappears...

— The holding offers graduates jobs and takes them on probation. But after the guys work almost for free, they are, of course, shown the door. Who needs to keep paying salaries if the work is seasonal? Off-season side jobs can be found only with farmers. But they cannot accommodate everyone in winter and autumn. Hey, look! Anatolii has come! The agronomist.

The vocational school deputy director Sashko is dissatisfied with how the holding uses his graduates

Another vocational school employee enters the guard’s room and settles at an old table.

— Is it really more profitable for you to work a shift at the dormitory than be an agronomist? — I ask the new interlocutor Anatolii.

— Of course, — he replies. — Here the salary is stable. What about an agronomist? Today there is work, tomorrow — none. Starting your own business is impossible. My wife and I have nine hectares and two shares. We have to lease them out.

— Twenty hectares to cultivate here, they say: the pigs won’t go hungry. There’s no point taking on a small plot without financial support or any machinery. And there are other problems. For example, elevators. Where to store grain? Plus fertilizers. These days you can’t do without them.

Smallholders

Lazirky residents also recount the same story about agrochemicals. Allegedly the holding sprays fields from helicopters with poison, not caring that it drifts onto local houses and kitchen gardens.

This is told to me in particular by small farmer Halyna Serhiivna, who does not want to be photographed or give her surname to the press. To reach her, I follow paths through fields to the village Pavlovshchyna. That village already gapes with ruins in about every tenth house. Not surprisingly, against that backdrop Halyna Serhiivna’s modest two-story house with a few rooms seems wealthy to many.

The modest house of small farmer Halyna Serhiivna seems very prosperous to her neighbors

— Over there’s a big one up top, — they direct me when I look for the farmer. In the house I find modest living, still Soviet furniture; they serve me a simple but surprisingly tasty meal: borscht and buckwheat with cutlets.

After her husband’s death, Halyna Serhiivna took on all the difficulties of a small farm of only twenty-seven hectares. From Zhytomyr Polissia by origin, she was one of the first of the local farmers.

— You can’t imagine what it’s like to haul kilograms of ammonium nitrate, pay loans and still think how to protect the harvest. And when we returned to private farming after the collective farm! But farmers still face obstacles at every turn. What about legislative raiding!? (the woman calls fraud over property rights that. — ed.) For example, today a share is recorded to you in the cadastre, and tomorrow it may be listed as belonging to someone else, some large owner. Not everyone can defend themselves. Only mutual help saves us. People like me, small households, constantly cooperate. Large farmers from Lazirky support us. And the holding? What about the holding? It’s only interested in our land. Its profits. Period.

Medium-sized

Yurii Motrych is one of the three relatively large farmers here. He has about 3500 hectares. The second of them is his cousin.

Farmer Yurii Motrych is not afraid of the agrarian reform

I am lucky to talk with Yurii’s father, Mr. Mykola, catching him at the local PCOU church that the Motrychs are funding the repairs of. Thin as a plank, he nevertheless in posture, manners, fiery eyes and even his sturdy coat resembles the descriptions of those legendary kulaks that once made the villages famous.

The farmer’s father in the PCOU church he repairs with his own funds seems like a legendary kulak

The Motrychs also built a PCOU church in Hrebinky. According to Yurii himself, he owns three thousand hectares, also has an elevator; he pays loans on time when needed.

By the way, as Lazirky residents complain about the holding, they unanimously speak well of the Motrychs. Not only because the farm provides fifty jobs. Farmers, unlike the holding, fulfill obligations to share owners, cultivate their kitchen gardens.

They also help the village. People like Yurii are loved for sensible management and for treating people well. This year he took workers to Egypt after the harvest. Rootedness in the local community and authority give him confidence ahead of land reform.

— But you won’t be able to buy all the land you rent, — I say.

— I don’t need it all at once. I’ve already bought some, albeit a little. I’ll buy more. And those who will sell their land — they will sell it to me, not to the holding. I will win this competition under transparent conditions. Of course, there’s the problem of small farmers. They barely make ends meet. If they are not helped with cheap loans they may go bankrupt. And even large farmers won’t compete with big foreign capital if it’s thoughtlessly allowed onto the land market. I hope that won’t happen.

Land and Culture

So, in Lazirky two farmer brothers feel quite confident; they value their authority in the community and depend on it. They don’t lead lavish lives. One even lives in an apartment in a two-story house.

Property stratification of the post-Soviet era hit public-sector workers hardest in the village. They also dislike the holding and worry about the fate of agrarian reform, understanding how their future depends on it — teachers, doctors, librarians, etc.

By the way, there are only two doctors in the huge Lazirky — a married pair. And the old pharmacy works only until three in the afternoon.

At the House of Children’s Creativity its director Antonina Anatoliivna informs me further about the village’s cultural problems:

— Teachers’ salaries here are more or less decent only with seniority. The starting rate is the same five thousand. Imagine: I’m the director of the center and I moonlight as a sales clerk in the summer. The children are surprised.

While I inspect the peeling ceilings, the head of the technical club Oleksandr Mykhailovych adds:

— My salary is four thousand. Almost half of it goes to pay for gas. So I moonlight at the vocational school. We do repairs here with our own hands. We often buy materials for clubs ourselves. Besides, we have a hectare of land. Five teachers cultivate it.

From the conversation I learn that in front of me are representatives of the cohort that were denied shares because they did not belong to the collective farm. The variety of crafts in one of the rooms shows how much effort has been put into developing children’s creative skills.

— Not everyone fears the sale of land. Some are ready to part with their shares to buy an apartment in Kyiv. We will get nothing from that. But our fates depend on what land reform will mean for the village. For now, as you see, we do not sit idle to save the center and prevent its closure for lack of funds. We are preparing an evening dedicated to Kotliarevskyi tomorrow. Come, — invites Antonina Anatoliivna.

A dozen grandmothers remain

The conversation with the village intelligentsia won’t let me go. After the Russified big cities of the Southeast, I have something to compare the situation with.

I have often observed how villagers, falling into such slums, bow to townspeople and renounce themselves, switching to Russian or adopting their manners.

The decline of villages also means the reduction of Ukrainian language carriers.

Eventually myths about clumsy surzhyk blow out of people’s heads. In Lazirky I more often hear impeccable Ukrainian with dialectisms at every turn. It is Russian in the cities that remolds it into a surzhyk hybrid.

“Lazirky — several dozen abandoned houses, Pavlivshchyna — every tenth,” — I think.

— Have you seen Ivankivtsi? There’s like Chernobyl there, only a dozen grandmothers remain, — interrupts my thoughts the vocational school deputy director Sashko. — Go see it.

Neighboring Ivankivtsi have almost disappeared. Only elderly women remain

“You laugh, but I cry”

Wasting no time, I set off there in an old Lada. Driver Vitalii entertains me with army tales from his service in Nagorno-Karabakh. He also lost his share. He once fell out with the head of the collective farm, not tolerating his stinginess. Since then he gets by with odd jobs: gives rides to the city, fixes roofs.

Suddenly Vitalii’s stories begin to whiz past my ears. This is the heart of Ukraine. Poltavshchyna with its chernozem and gas production. Even Chernihiv region, not known for emptiness. Yet outside the window abandoned houses overgrown with weeds flash by. Until recently the village had four hundred residents! Although Vitalii is not surprised:

— We have this everywhere. Ivankivtsi are not unique, — he adds. — Look there. Some old woman at the end of the road. Maybe she’s waiting for you?

An elderly woman in a shabby headscarf and galoshes by a dilapidated cramped house waits for the pickup selling groceries. The village shop has long gone. She is one of the last elderly residents. Among the young, only the electrician and his family remain. Only about twenty houses are still standing.

The grandmother distrusts us and asks not to be photographed. Yet alone, she speaks. She has no conveniences. A wood stove, a well, a TV and a radio — that’s all. But the woman does not complain. She rather wonders why young people are so unhappy, why they cannot take pleasure in life. After all, her youth passed through horrors — either famine or war.

— Several generations must change in the country before they understand how to manage for themselves, — she says elegantly as I enjoy the flow of her words, words now found only in books:

“stanovyshche” (situation), “kram” (shop), “krucha” (steep bank), “zhdaty zhdanikiv” (to await something longed for), “dotiahuiu konchyny” (I reach the end).

— Everything was in Russian: in the technical schools, institutes; you wouldn’t say a word of Ukrainian in the city — they’d immediately cluck at you — reads my thoughts this simple peasant woman. — But it’s okay. Everything will be fixed. It only needs time. I think: let everyone start with themselves. Then the country will change. What more do young people in the cities need? They already have so much, and yet it’s not enough! They want more. But they already have. Life will pass soon. It’s not for drunkenness, and then jumping out of windows.

— No one to chat with in Kyiv, huh? You chat away! Pah and shame! — she finishes, already shuffling off to the pickup for bread.

I gape in astonishment. But after sadness, fury paralyzes me.

It’s not hard to imagine what village destruction would mean for Ukraine if land reform favors large holdings over farmers: villages will continue to empty. People will emigrate for work to Poland and beyond. Under properly organized farming, they could earn more on their land “from Cossack great-grandfathers” than on drywall in the Czech Republic.

Going home

“Don’t worry. Our Lazirky are still a normal village. As you see — we work. Everything can still be fixed,” echo the words of a Zakarpattia transplant who is repairing the church as I drive toward Kyiv.

“Everything will be fixed. A few generations must change,” echoes the conversation in Ivankivtsi.

“I will win in this competition with the holding. But, of course, small farmers must be supported. Big foreign capital must not be thoughtlessly let onto the market,” — the Motrychs remind.

Poltavshchyna… See you. Farewell! The old minibus rattles.

In conclusion

The state can, through agrarian reform and launching a land market, change the situation in the Ukrainian village for the better. Here the experience of not only our nearest neighbors the Poles but also so-called “Asian Tigers” — those of Southeast Asia and earlier Japan — would be useful. Their sharp upward leap began with new rules in the land market: large owners lost land, while hundreds of thousands of previously landless peasants became farmers.

Indeed, small producers compared with large ones can earn more per hectare thanks to more thorough cultivation of smaller holdings. Thus the leading Asian countries solved not only employment problems, but also the accumulation of initial capital for industrial investment. Japan, South Korea and Taiwan strictly regulated the land market.

They created ideal competition, as in a textbook, among small owners, but prevented land concentration in a few hands. Later, by subsidizing, training (!!!) and helping new owners store and export their products, states turned poor peasants into a middle class whose children went to university and became businessmen and politicians, and whose grandchildren are now among the most educated on the planet.

And even if the Asian Tigers’ situation does not exactly correlate with Ukraine in population size and landholdings, it reflects the principles of a potential economic breakthrough. What’s more to say about Ukraine with its chernozem compared to Korea’s or Japan’s infertile soils.

It is obvious that every nuance of our agrarian reform must be worked out to the smallest detail. Most of all, support is needed for small-scale farmers who lease up to one hundred hectares and medium-sized farmers with several hundred hectares. Therefore, giant holdings should give way to numerous large, medium and small farming households.

Only a carefully thought-out redistribution of land (for during the “absence of a market” layer of large de facto owners formed) can bring new jobs to the country and strengthen an agricultural boom, thereby ensuring domestic investment.

This will be the economic breakthrough and the social elevators every new government talks about. And such a farming Ukraine will have money to maintain a modern army, which is not cheap, but which we need to survive a protracted war with Russia.

Oles Kulchynskyi, published in TEXTY