Increase in efficiency of land bank management

Astarta-Kyiv is one of the largest vertically integrated agricultural and industrial holdings in Ukraine. At present, the company’s management has over 230 hectares of the land bank. «Astarta» is a producer of sugar and industrial milk №1 in our country. Recently, the company took third place among the 89 world agricultural companies in the ESG rating from Sustainalytics. The company “Astarta-Kyiv” was founded in 1993 by Ivanchik Victor Petrovich. 28 years of business journey, and growth horizons and strategic plans are becoming more powerful and larger.

“Striving for the impossible to reach the maximum”, this principle is guided by the founder of the holding, managing a powerful and diversified business that unites a number of professionals.

In 2017 the management of the holding company created it-company AgriChain, which develops and implements solutions not only for Astarta but also for all participants of the Agri market. One of the company’s flagship decisions is the AgriChain Land Land Land Land Land Management System. Galina Barska, Head of the Land Resources Department of Astarta, will tell us about his experience in using this system in work today.

The land bank of the agro-company is a fixed contract to relate or own land. That is, it is an asset that the company owns, the right to use, which we can confirm.

Often confuse the concept of land bank and land use. These figures do not, probably, exist in any agro-company in Ukraine. Because land use is the area of land in the area of work, and it differs from the land bank primarily because of the land exchange needed to avoid “chess” on the field.

– We immediately move to the painful problem of land bank management. Where are these “chess” taken?
– Everything depends on the neighbors of agrarians and historically “interesting” legislation. On condition that our company is the only one working in the village, we process what we rent. If several companies work, it is not necessary to talk about creating a solid rented land mass, to solve this problem is rather difficult. That is why it is necessary to negotiate with neighbors, register such agreements, and manage the whole land in good quality.

– The scales of “Astarta” are impressive. So, how do we manage such a bulk of data?

– We use it-product of AgriChain. This is a web-based land asset management solution that is designed to meet the needs of medium and large agribusiness. Land management, field management, contract control, accumulation, and preservation of historical data – within the framework of one article and do not transfer.

I would like to emphasize that one of the main tasks of the Land Resources Department and all regional land departments is not just signing a lease agreement with the legally correct registration. This is also a precise understanding of where we have leased land, whether we use it or not, and therefore it is the visualization, which is incredibly convenient built-in it-system AgriChain Land, increases efficiency in times.

– It turns out that the system has been in use for three years. And before that, how was management in a company of this size?

In due time, the owner of the land stock brought documents on its land and signed a lease agreement. Further, the employee of the land department in the region on the cadastral number reported the site on the public cadastral map (however, there were times when the reports were carried out according to the schemes of evaporation) and made notes on paper maps, that is, made a mark of the location of the site. In addition, of course, we used 1C.

And now 1C do not use?

All information entered via the web system is duplicated in 1C. Now there is a direct loading of information into the single system, and the exchange file with contour and coordinates is loaded into the database. Recently, also began to tighten information about plots from the registers directly into the program. Previously, it was necessary to spend hours of working time on this task, and now the land plot is 2–3 minutes. That is, now we enter data in one place: We start new sites, add contractors, contracts, and additional agreements, and they are automatically loaded in 1C.

That is, do you work with the land bank only in AgriChain Land?

Not quite so. We have not yet transferred to the system business processes related to the land budget and have not completed the implementation of the payment and calculation block. We have a large holding and complex business processes that require additional participants, inspections, and approvals. But we are working on this task and by the end of 2021, we will manage functional blocks on payments and budgeting by 100% into the unified system of management of the land bank.

Galino, it turns out, with the introduction of it-solution there was a transformation of the land service?

Everything is correct. The company has undergone a large process of unification and optimization of the land service. It is very important for us to effectively share roles in the team and define the limits of responsibility.

With the advent of AgriChain Land, everyone started working in a single “land” ecosystem. Both the specialists working with the shareholders, and those who make lease agreements, and those responsible for payment, GIS specialists – all use the same it-tool.

That is why we are now 100 percent sure that all the necessary data for effective management are organized and are, as they say, “at hand”.

But there should be a center that accumulates, controls, and remotely manages, especially now, during the “COVID19 crisis”.

In our main office, land management consists of two departments: Control and registration of land assets and land documentation. Total of eight specialists, including the Chief of Administration.

The Land assets Accounting and Control Department is working on the preparation of reports and performs the monitoring and audit function. And the Department of Land Documentation, respectively, develops project and technical documentation. In this department, there are two certified engineers-earth-order.

Galino, and how many people in general work in your team?

The team is quite numerous. If you take it in general, then regional colleagues and the head office are 107 professionals of their business.

I would like to note that the work in AgriChain Land is built on a convenient system of task management, which saves time and improves the efficiency of the performance of tasks. We always know who is doing what, what is responsible for, and what tasks the employee faces.

Accordingly, can we talk about the real economic efficiency of it solution for business?

A lot depends on the agro-company, on what it needs, and in what state it currently has a business process on management of the land bank.

The long-term lease agreement is for each company of its own money. However, the timeliness of payments and social responsibility to people is more than the amount of money under the contract. It is the basis of socially responsible business and the guarantee of sustainable development of the company.

So, is this it system a whole management ecosystem for land users?

For example, AgriChain Land it solutions are unique. In general mass on the market, there are offers on the direction of cancellation with the minimal function of registration of land plots, many tools of accurate land management, systems of GPS-monitoring with the connection of data about the owner, etc.

AgriChain Land is a decision, first of all, focused on the management block, exactly on the construction of a structured and managed land bank. Note that the effect of implementation is a real order in document management and saving up to 20% of the working time of land developers at all levels.

Can you give any specific indicators? How was it? How did it happen?

At present, the digital management of the land bank is implemented at all enterprises of Astarta. For example: In 2019, it was returned to production by means of an arrangement of the exchange areas, sorting of the shrubs, establishment of the real borders of the fields of 1293,4 hectares of land, and in 2020 – 659,84 hectares. According to open data opendatabot, the average cost of the lease of 1 hectare of land in Ukraine varies from 150 to 270 dollars, depending on the region, there are exceptions where the rent exceeds 300 dollars.

As far as we know from open sources, the land lease is more expensive every year, and given that we are standing on the eve of the opening of the land market, is there a certain strategy of land bank management?

In general, we have a strategy of efficient land use – both in rent relations and a decision to buy land assets. Having it-system with full visualization and full of all necessary data, we analyze land plots and, depending on this, build strategic plans.

For example, if we are unable to obtain a planned yield from certain lands for several years, it is better for us, as a business, to refuse further leases.

In fact, this it-tool helps to prepare for the opening of the land market?

Of course, in an ideal situation, it is better to have land in ownership. When the agro-company is sure that it will constantly process specific areas, it will play every centimeter that is processed. And in rent relationships always there is a human factor, especially when it comes to resigning contracts.

Now many people have already decided that they will sell the pack, so they are not going to re-design it. Many decided to take the land and start processing independently, and these are all huge business risks, with which on the scale of medium and large agro-companies it is simply not possible to cope without modern it-tools.