The agrarian sector is considered one of the most promising for doing business. The main reason for this is a steady growth in demand for agricultural products, writes “Agro-Center”.
In order to calculate a value of an enterprise in the agrarian sector, the value of individual groups of assets is summed up – land (terms of its lease, quality of soils), machinery and real estate. Current reserves and debts are also added (if there are any).
Enterprises of Ukrainian agrarians have grown in price significantly during the past 4-5
years. In 2014, the value of farms on average was $600-800 per hectare, in 2017 it is $1300-1400, and in 2018, the average value in the leading regions is estimated at $1500-1800 per hectare.
Experts believe that the cost of agribusinesses is increasing due to the increase in the cost of the land lease.
Investors in the Ukrainian market are counting on a 4-5-year payback period of farms. In crop production, the average income level is $300-350/hectare. In 2014-17, enterprises engaged in plant production has a 2-4-year payback period.
According to experts, in order to make Ukrainian agrarian market more attractive to investors, it is important to open the land market. It will make investing in the agricultural sector less risky. However, in this case, the payback period will be 7-10 years.