On 22 February, more than 70 activists and residents from the Chyhyryn region south of Kyiv protested outside the headquarters of Myronivsky Hliboproduct (MHP), the Ukrainian agribusiness conglomerate owned by one of the country’s richest billionaires. The protesters were airing their grievances against MHP’s plans to greatly expand its poultry operations in Chyhyryn, which locals believe will have a devastating effect on the small and medium sized farmers and the tourist potential of the area.
MHP is at the centre of concern for local communities and civil society organisations in Ukraine, because of the way the company engages stakeholders, acquires land, and impacts the environment, water and the local economic development. Since 2010 the European Bank for Reconstruction and Development (EBRD) has approved three loans for MHP, totalling USD 205 million.
Whether or not the company is in compliance with Ukrainian law, local people think they are not adequately protected and do not have an equal voice against a large corporation if it decides to begin construction.
A closer look at Europe’s recent investments in Ukraine’s agriculture sector shows that the failure to apply high transparency standards and social safeguards poses not only business risks but also undermines Ukraine’s democratisation process.
There’s an ill wind blowing in Vinnytsa Oblast, and if one of Ukraine’s biggest agriculture companies keeps growing, things could get worse for the people living nearby, environmental, corporate and bank watchdog organizations from the European Union and Ukraine say.
MyronivskyHliboproduct (MHP), which runs the biggest poultry farm in Europe near the village of Ladyzhyn southeast of Vinnytsa, was the subject of two reports released this September after a fact-finding mission of six environmental watchdogs visited the area in May.
Ukraine's agriculture was the only sector in the country to grow in 2014. International investors like the European Bank for Reconstruction and Development are happy to point this out - and the role they are playing in financing these investments.
But an investigation published today into one of the main beneficiaries of loans from the EBRD and other multilateral development banks shows that cheap Ukrainian food products are coming at the expense of severe impacts on local communities.
Residents in Ukraine's southwest are facing environmental decline, intimidation and deteriorating quality of life as a result of the rapid emergence of Europe's largest poultry farm, finds a report released today by CEE Bankwatch Network. Owned by Mironivski Hliboproduct (MHP), Ukraine's biggest poultry producer, the Vinnytsia project has been enjoying hefty support from Europe's public financial institutes and the World Bank, and plans to double the facility's size are only likely to exacerbate its social and environmental impacts, shows another report released today by the Centre for Research on Multinational Corporations (SOMO).
Given Ukraine's abundant land resources and food production potential, modernisation of agriculture is necessary and industrialisation is inevitable. Yet, an investigation into the Vinnytsia poultry complex shows the negative side effects of large-scale industrialisation of meat production and sounds the alarm about the risks that agroholdings pose to communities.
The story of the defaulted company Mriya Agro Holding shows what risks investors and creditors are willing to take in the pursuit of profit in Ukraine’s agribusiness. Major creditors, including the International Finance Corporation and export credit agencies have been left with little hopes of recoveries. The European Bank for Reconstruction and Development has escaped the financial loss by a hair's-breadth.
The European Bank for Reconstruction and Development praises its own achievements in the agricultural sector. A look at Ukraine, however, reveals how sustainable food provision, local communities and the quality of soil are falling by the wayside with the bank’s focus on big industrial operations.