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Friday, 21 August 2015

Oligarchal rule: Ukraine agribusiness firms in 'quiet land grab' using World Bank private lending funds

Claire Provost and Matt Kennard
The Guardian

Hundreds of millions of dollars in funding from World Bank's private lending arm used to expand industrial farms amid mounting concern about local effects.

Myronivsky Hliboproduct, a leading agribusiness firm that dominates the Ukrainian poultry market, has received at least £128m from the International Finance Corporation over the past five years. 

Hundreds of millions of dollars in development finance from the World Bank's investment arm have helped to fund the controversial expansion of a billionaire's agribusiness empire in Ukraine, amid growing concern that land and farming in the country are increasingly falling into the hands of a few wealthy individuals.

Controlled by one of Ukraine's wealthiest men, Yuriy Kosiuk, the agribusiness company Myronivsky Hliboproduct (MHP) dominates the country's domestic poultry market and exports chicken and luxuries such as foie gras across Europe. Since 2010, it has received at least $200m (£128m) in long-term loans from the bank's International Finance Corporation (IFC).

Much of this funding has gone to support the building of Europe's largest industrial chicken farm in the middle of Ukraine's rural heartland. Almost 300km south of Kiev, the Vinnytsia poultry farm is part of an audacious effort to transform the country once known as "Europe's breadbasket" into its "meatbasket".

The IFC, which like all World Bank institutions has an explicit mandate to end global poverty, says its investments in MHP have created jobs and supported food security in Ukraine and beyond. Central to the IFC's mission is a policy to "do no harm" and achieve positive development outcomes by investing in the private sector.

But villagers living near the Vinnytsia project, which is already partially constructed and in operation, said no one is listening to their concerns about its impact on their area. They also said that people are being pressured into giving their land over to the project by signing long-term land leases.

The project is a massive complex, with slaughterhouses, hen houses, fields to grow crops to feed the chickens, and incubators for eggs. It is still expanding, and this expansion requires leasing extra land from nearby villages in order to construct more "rearing zones" for chickens and additional grain facilities. The second phase of construction is expected to be completed in 2017-18.

"There are growing fears about potential ecological and health impacts and extra pressure on local people to sign land lease agreements," said Natalia Kolomiets, environmental protection specialist at the National Ecological Centre of Ukraine (Necu). "It looks like once the business, the state and the investors are interested in having these projects, there is really little attention paid to local populations."

In villages already surrounded by the farm's facilities, residents said the smell and noise are overwhelming, and claimed their roads and houses have been damaged by heavy trucks driving past day and night.

"Before, it was calm and peaceful here," said one man in the village of Olyanitsa, pointing at cracks in his brick walls, which he said appeared after the trucks started driving through the village. "Now everything is vibrating ... look, everywhere, it's all broken."
Local NGOs have documented concerns about air, noise and potential water pollution since 2011, but the company dismissed the question of environmental concerns, saying it complies with all environmental regulations. Community leaders in Ulianovka, a small village on the frontlines of the project's expansion, said they have written to the company and to local authorities but that no one is listening to them.

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