Wednesday, May 04, 2005

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We just came back from a visit to the country and the in-laws (and extended family) over Easter, the Orthodox Easter. We would call it as I did, a visit to the relatives in the country. But here they call it visiting the village. The village is a generalized place but it is also a life style. Maybe I’ll go into it more in other postings—after that is, I get to the other things I have been meaning to write about here and haven’t yet. But it was a relaxing stay, even though the facilities are only a little bit better than you might get camping. (There was an indoor shower—a real innovation there-- but nothing else.) The inconveniences were more than made up for, though, by the hospitality.

We worked a little on the land there planting corn and tomatoes along with some Chinese cabbage they call it, but which looks and tastes to me more like a type of lettuce. That was hard work for people accustomed to sitting and to apartment life but it was enjoyable, and again, relaxing.

There was no machinery for us to use so if we wanted to prepare a plot for planting ourselves, we had to spade it, by hand. Some people do this for whole acres. My in-laws had a guy come over with a tractor do the work on their back piece. They paid him for it in cash. A few years back, they would have expected to pay for it with a couple of glasses or vodka at the kitchen table and some talk between men. But times have changed. But even they spade the smaller parcels by hand.

It was interesting to me that anyone could have a new tractor out there but we saw two of them. The guy who plowed for my in-laws had one; the other we saw on the way home. But the economics out there in the village do not support what would be needed to buy a new tractor. For one thing, there is no credit to speak of. Banks here do not loan money to farmers at any period of time longer than a year. And the interest rates are high, more than double what would be available in the US.

And most of the agriculture is for local use anyway. It is not sold to a wholesaler for the most part to make a profit. If any money is needed, a basket or boxes are loaded up and the farmer or his wife makes his or her way to the market in the nearest city and sells at cut rates because of all the other produce at the market there from other farmers trying to do the same thing. If they want to sell at a higher price, they may catch the bus to Kiev and sell it on the streets of the city, dodging the police as they do. (The police here often confiscate the produce because they have no license to sell. But that has meant that the produce has just changed hands ending up with the police officers to take home-- free. They get something for nothing and do it under the color of the law.)

So there are a lot of people in various areas of Kiev selling produce on the streets. And they do it for not all that much in return even if the price they can charge is higher than in the outlying cities. A few hryvna here and there, nothing in the amounts that a farmer would need to pay for a tractor in cash, a tractor which cost $15,000. So how do they do it?

Some say that they sell apartments in the city and that gives them enough money to buy a tractor. That is believable because property values have rocketed in the past few years here in Kiev. Others say that criminal interests are looking for places to launder cash. The story is that the tractor is paid for with illicit cash and given to the farmer who then uses it to make money with a portion going to the guy who purchased it. This one is hard to believe not because money is not being laundered here; it is. It is hard to believe because of the amounts they could get in return from that kind of work. In the village the equivalent of $10 is a lot of money. Officially, people in the village live on as little as $8 a month. Some do. This is, however, what the figure would be for everyone if you looked at what they would get from farming. But they often have a family member working in construction in the larger cities and that money is what they use to pay for things like electricity or gas and the like. They might make upwards of $200 a month doing this during the building season, but the work is on and off and there is always competition from workers coming in from other areas. Even with the money coming in from outside, though, $10 is still a lot to fork over for work done.

We did see some farmers with used tractors. That surprised me. There were at least four or five tractors in the little village we were in. That village had only about 300 people but the problem is money still. Where would they get any money for even a used tractor? The other problem is that for all but a few that have escaped into the market, most of the tractors were held by the collectives of the Soviet Union. With the collapse, these collectives were split up and the land was parceled out to the farmers in the area. The machinery, on the other hand, ended up with some cooperatives. These cooperatives were simply repackaged collectives with the same boss on top, reaping most of the profit much as he did before.

Other tractors did end up in the hands of some enterprising—read: capitalist—farmers. These guys acted quickly enough, and, some would say with enough foresight, to simply drive off with the machinery. Or they had the contacts in power needing something they could supply who just gave them the tractor as a return of the favor. Here it has been the case that if you have it and can keep it, it is yours. One guy we passed ended up with a couple of tractors and a combine all for his own use. He is now doing well but you gotta think that that was nothing more than looting.

The rest just spade their fields by hand and harvest with a scythe much as their ancestors have done for millennia. We saw old women in the fields spading and planting by hand. If the plants needed water like ours did, they would have to haul it out to the fields by hand. There are not all that many cars in the village there either just as there are not many in the other villages here either. (We hauled it in the car and when we ran out had the kids go fetch some more.) These people, on the other hand, had to haul it out themselves if they needed it—no children were to be seen. But that is what they have done their whole lives. What we saw them doing was no different than what they did last year and the year before that and the year before that. For them it is what is done from year to year.

The cooperatives here are where the only serious agricultural production is being done on a wide scale. But their efforts are pitiful and the results are the same. Often the guy who ended up on top after the collapse is the one who rakes in the money while those on the bottom are left with virtually nothing.

The cooperative my father-in-law belongs, for example, has a contract with him to use some of his land to plant sugar beets. The cooperative has their people come on the land, till it and plant it with sugar beets. The contract he has with the cooperative has the profits from the planting and harvesting being split up as per the agreement. That “per agreement” has had a tendency to change from year to year depending on the big boss. In fact, it has gotten smaller and smaller over the years. What my father –in-law has ended up with for the use of his property in the past couple of years is about 450 hryvna, or about $90 per year. And this is not $90 cash. The big boss gives them payment in kind with the sugar processed from the sugar beets. That sugar must then be sold by my father-in-law to get the cash value. You can see why the big boss does this. It is much better to cancel debt in kind than it is to use cash to do it. It is simply good business.

In a real show of the business abilities of this guy, they planted 100 hectares (about 250 acres) in sugar beets last year but ended up harvesting only about 30 of those hectares. (About 75 acres.) Why didn’t they harvest the rest? They did’t have the trucks to haul the beets to the processing plant. The rest were left to rot in the field.

All of the buildings of the cooperative are run down and on the verge of collapse. All of the machinery of the cooperative is wearing down and is on the verge of becoming useless. They had a number of trucks but are now down to two with a bed size about that of a couple of pickup trucks. This is a problem if they have to haul a lot of produce to be processed—like 100 hectares of sugar beets. They have to make a significant number of trips to haul it.

And they are now down to two tractors where once they had more than five. They have two harvesters but the rusting hulks of another three are still to be seen there on the property. Why is this? Because the big boss hasn’t put anything back into the business. The people say that he is a bandit and he might be. But if he were a bad businessman, the end would be the same.

In talking to him, his solution is to find an investor. No one would be willing to invest in a operation run like that. So the cooperative limps on from year to year with the farmers getting the short end.

One afternoon, we were standing on the in-laws property looking at this beautiful rich dark soil that Ukraine has a lot of. I pointed to that soil and told my mother-in-law that that was the great asset of the Ukraine. But then I pointed at the buildings and the rusting machinery of the cooperative which we could see from where we were and I said, “But Ukrainian farmers have ended up with that.” A real shame. But they can do nothing else. The ones who ended up with nothing other than land after the collapse can do nothing other than what they are doing because the machinery to work their land is in the hands of the cooperative or of the those who drove it out when the gate was left open.

This is something that we are going to try to work on. The villages here are dying because there is no money to be had there and so no future of the kids. They all want to go to the big city, Kiev, to make their way. But they come here and find that they might get work but it is at less than minimum wage—about $40 a month-- and they end up, some of them, living in a box. We would call it being homeless but for some people here it is living. They have work but they live in a box.

One woman we know of came here from the west part of the Ukraine which is a very poor area of the country. She ended up with a job selling things at a local open air market making just a couple of dollars a day. The only place she could find was a little bed in stall at the open air market where she worked. So she lived there. She now works as a nanny for a woman in Kiev so she has a roof over her head now. But she is not alone in this. A lot of others are finding this when they come here.

The thing to do is to make farming profitable for them. If it does, other businesses will need to be close by to support farming. That means jobs for locals. And if, as I think will happen, large firms end up farming the land here like they do in many other countries, there will be people around still to work, people who like to work with the land. Technology only gets you so far in farming. People still need to do some things. And it is hard to attract people out of the cities once they get established there to come back and work in farming. They don’t want to be bothered with it.

Anyway, we are home. That means looking out the window at drab Soviet apartment blocks instead of out at green trees and dark earth. Bummer.

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