In the period from 2015 to 2017, 1 UAH of investments invested in agricultural production yielded an average of 0.295 UAH of profit before tax. Investments paid off in 3-4 years, according to research by the National Institute of Agrarian Economics.
Even in the conditions of military conflict and economic instability, the volume of capital investments in the agrarian sector has increased by 81% over the past three years, emphasizes Mykola Kysil, a leading researcher in the department of investment and logistics of the Institute.
But in 2018, investment growth began to decline, the analyst notes. In conditions of increased risk, investors prefer “short” money. At 1 UAH of capital investment today, 2.64 UAH account for the short-term investments.
“They effect quickly, but do not create a basis for future development,” warns Kysil.
At the same time, foreign investors are less willing to invest in Ukrainian agriculture, not relying on the recoupment. At the beginning of 2018, non-resident investments amounted to $621 million, with 43% of them coming from offshore companies.
“Investors should understand that investing their capital in agricultural projects now and in the future is a profitable business,” Kisil says. “In the future, it is advisable to combine them with investments in the processing of agricultural products.”