ection, labor costs, etc. included, annual cultivation cost from USD 200 per hectare using organic farming methods up to USD 500 per hectare with conventional/chemical farming. Organic farming, as opposed to intensive conventional farming, provides a better investment opportunity in Ukraine due to high natural fertility level in the soils. In most of the cases, there are no yield losses when growing organically in Ukraine compared to what most of the Western European farms experience during the transition period.
Optimal investment cost in Ukraine's agricultural land in 2009 is one of the lowest at USD 600-800 per hectare compared to Americas '(USA and Argentina) USD 4,000 +, and Western European level of USD 12,000 +. At the same time, the current harvest yields in Ukraine suggest that the agro-ecological potential of 6.2 metric tons per hectare can be easily obtained under proper farm management and with the use of optimal organic technologies. Besides, the land lease price is expected to double in 2010. p> Ukraine's soil quality is subject to bonitet valuation system. Most of Ukraine's soils boast a bonitet above 40. Chernozem (black soil types) have a bonitet of 70-80 and more. Soil fertility is a complex quality of soils and not limited by bonitet. Land valuation in Ukraine has no standardized system and in most of the cases is based on the yeilds history for particular farms or individual fields.
Soil quality tests are easy to obtain in Ukraine and cost USD 200-450 per measured field (50-200 hectares). Such tests often include detailed recommendations for further soil treatment making it very easy to draw cultivation and fertilization plans per each individual field.
Farm management, on the other hand, is a more complex issue. Many Ukrainian farms lack new equipment or sufficient knowledge of modern farming technologies and sustainable farming methods.
An optimal size of an individual farm in Ukraine is 5,000 to maximum 10,000 hectares. The farm volume is considered optimal when any commercial crop can be harvested and sold at the minimum export volume of 3,000-5,000 metric tons.
Harvest storage is a critical consideration for operational independence and financial stability of a farm not only in UKraine. A capital investment of USD 120-150 per metric ton of storage should be considered to secure long-term performance of a farm.
