SAC Consulting

The underlying global dynamics of population growth and increasing demand for food are still intact as are the tremendous challenges they present in an era of climate change and food shortage.

One of the areas of growth for SAC in this area is in consultancy work in Eastern Europe for Scottish and UK growers. Dr Keith Dawson has just returned from one of his monthly trips to the Ukraine.

According to Keith, “Ukraine has had a mild relatively mild winter and good snow cover which has now melted, revealing good plant stands and well-established crops in the main, despite a wet difficult harvest and sowing period. The difficulties of the global credit crunch and increasing fertiliser prices have led to reductions in autumn wheat planting in Ukraine of around 30% but I can report that SAC’s two largest clients in the Ukraine have successfully tripled their cropped hectarage this autumn.”

This success has led SAC to invest in a permanent member of staff in Mike Lee who is based in Lviv in Western Ukraine, as well as providing work for a number of other SAC staff.  Western farming companies advised by SAC now crop over 40,000ha in Western Ukraine and provide new employment for over 1,000 Ukrainians.

One these success stories is Continental Farmers Group (CFG) formed by a consortium of Scottish and Irish farming interests and led by Forfar farmer, Mark Laird. The group farms successfully in both Ukraine and Poland where the business has been established for over 15 years. From a modest 70ha of potatoes three years ago in Ukraine, the group now grows over 1000ha of potatoes and a further 9000ha of wheat, rape, sugar beet and maize - all for markets in the East. The largest field is over 2,000 acres. SAC has been involved since the inception of this development in the Ukraine, with agronomy and much other business advice requiring monthly visits at this time of rapid expansion and on-site back up and training.

“We are well regarded by the Ukrainian Government and investors as experienced partners in developing the agricultural potential of this region,” says Keith Dawson, “In conjunction with significant Western capital investment of over £100m over the last eighteen months and SAC’s experience has been key in securing this. We can also help less experienced Western investors ensure they make the right choices.

"Helping to provide employment and tax revenues in this area in difficult times gives us all a feeling of reward in addition to making sound business sense,” he commented.

Dr Dawson believes SAC has had a key role in the successful development and, despite problems in the Ukrainian economy, agriculture is a strong sector and the downturn has increased opportunities.

According to Mark Laird, CEO, “CFG and our investors are extremely bullish about future expansion.”

CFG has achieved the highest yields and crop quality in Western Ukraine in 2008 of any farming operation, average audited yields of 6.5t/ha for winter wheat, 3.6t/ha for oilseed rape, 30t/ha for potatoes (without irrigation) and 62t/ha of sugar beet have been achieved. These yields are up to three times the average Ukraine production levels! The potato land does not need stone separation and is well structured and very fertile and well drained.

Fertiliser prices are well below UK levels and Scottish seed inputs, expertise and machinery (new and secondhand) are all utilised. The area around Lviv (pop 770k) receives annual rainfall of around 750mm although, like Scotland, 2008 was a significantly wetter year with harvest difficulties for all crops! The potato enterprise is split into table, processing and seed markets.  Storing crisping potatoes over the Ukrainian winter and shipping them for a week on lorries to crisping factories in Moscow is not without its challenges!

“We are going to need all this produce to feed the increasing populations in the East as dietary demands and population grows. We strongly believe there are more opportunities than threats out here,” Dr Dawson commented optimistically.