Digital solutions are becoming more and more popular in the agro-sector. Companies faced new market challenges. Therefore, in order to successfully manage its land bank in the current situation, progressive managers introduce new technologies. The representative of the group of companies “Deluxe” and “Yavir Agroservice”, which has about 7 thousand hectares of land, told us about their experience.
— About 30% of our business activities are classical agro-production, — says the group’s co-owner, Boris Okhrymenko. We have been actively developing this area since 2005 at Yavir Agroservice and since 2016 at Deluks. In Yavir Agroservice we have a managing partner, and by 2018 we did not participate in the operational activity. In the work, we now have about 6500 hectares. Our land bank has grown due to the acquisition of land for rent, constant communication with our shareholders, work with village councils, and agricultural enterprises have almost not been bought. I am a second generation of businessmen, therefore in my work, I rely on the experience of natives, because we have all family members involved in work, and also I look for new tools for the development of our business.
— Can you give a definition of what a land bank is for your company?
For the agro-producer, a land bank is what it is impossible to work without. There is no agribusiness without the land bank. I have worked in the trade sphere, where doing business is necessary for goods, and customers, forming business approaches, building processes, and actual activity can exist without some factors. And in agro – there is no land bank, there is no result. You know the dilemma of “What was the first, chicken or egg?” So, in agro the first exactly was and there is land. Of course, people, and technologies play no less important, but without a land bank, there is no place for these people to work and where to implement those technologies.
— How did you organize work with the main asset at the beginning? How did you build work with the shareholders?
At the beginning, perhaps as everyone else, the work was carried out in the exhibition and on paper. In fact, the paperwork has been lost, but only for signing contracts, we have not yet reached the use of electronic signatures. Previously, there was only an exhibition, paper, and search for sites on the public cadastral map. Every year, before the beginning of the sowing campaign, a very large number of data should be updated, the increase in the sowing area makes this task much more difficult. A lot depends on the land-man, I will equal the employee of the land department to the “Golden Fund” of the enterprise.
I know a lot of Stories that “go” a specialist of land from the company, with him “goes” a lot of important information for the business: Data about plots, about relations with shareholders, about an exchange. Well, if the land plot once exchanged, and when the exchange took place two, three, four times. If the farmer or small enterprise has 5 or 10 sites, this information array can be remembered, and if the sites are hundreds or thousands – it is simply impossible to do everything manually and on different tables.
Thus, the business structures and the information cannot be restored, therefore the need to merge all data in one system existed almost from the very beginning of the activity, as we wanted to avoid these risks.
— When did you decide to implement the program for land bank management?
— With a rapid increase in the area processed by our company, business risks began to increase, especially problems with agro logistics. We have always had to update the data, which we have the exchange, where we have the suspension, where we have the road, where there is an opportunity to get to the technicians, and where there is no road and not only.
On condition that the company handles the same fields for 30 years, they may not have these questions, although I doubt this…. we are relatively new players on the market, so information about the fields, fuel, which are part of the structure, is very important for us.
Faced with these problems constantly, we have come to the point that we need to establish order and implement modern software that will help in solving these issues.
– You probably have seen many different programs on the Ukrainian market. Tell me why AgriChain Land was chosen?
— We are proud that today we have people working in large agricultural holdings in our team, it is a very big plus. Specialists are ready to work with serious programs, not to play with children’s pictures and graphics. Having experience of experts, the company was ready to move to serious and effective program solutions, therefore we have chosen AgriChain Land. But I want to note that this product, is not only the most functional and effective but also quite difficult at the beginning of work. The program contains many business processes, information, additional controls, and tools, each of which you want to use. Despite integration with the registration, it is not easy to gather all information about land and agreements to get a working base and reports, but the result of the implementation exceeds all expectations. Besides, we were constantly helped by employees of Agrichain, therefore we are really happy with the choice.
Is there any change in the way we work today? Is there a result that can be voiced?
In our opinion, the result calculated is how much land could be added and found after the data was digitized. In monetary terms, digitization has brought companies enough to pay for AgriChain Land for many years ahead. Somewhere technical loss, somewhere lost peace, somewhere wrong contours of the field. For example, by means of “figures” could find two sections of the state form of ownership, which have never been processed, and the rent paid for years. Working with documents without visualization on the map, the land-man can think that everything is good, and in action, the company pays for what does not process.
Our company has a specialist working with the geodetic device. We independently digitize and refine the contours, and report with the public cadastral map. So we were able to find sites that were treated incorrectly for decades. There were situations with exchange when we handed over the farmer’s land, and it turned out that the land in exchange did not correspond to the declared areas. Before the program implementation, we thought that the exchange of equal value, turned out the contrary, as a rule, small farmers, better calculate their land.
— А якими навиками на Вашу думку повинен володіти спеціаліст земельник?
— A specialist of the company’s land division should confidently own a computer, have an analytical mind, be communicative, and have a desire to develop constantly. People in villages are in an informational vacuum, drawing information from politicized mass media sources, so our specialists constantly communicate with people, and conduct explanatory work. They answer questions on rent, explain the norms of legislation, help in drawing up documents for obtaining subsidies, etc. People with a high level of knowledge and skills should work in the Land Department, they should understand what they are doing, what they are doing, and what the results will bring.
— What does your company do for the land processing area?
— In my opinion, we have a “standard package” that any agro-company should introduce in the village. First, we have a higher rent than the region, secondly, we always help within our capabilities, it also helps local schools, put windows and doors, somewhere to slide the road, somewhere to remove snow, put a fence in the cemetery, and much more. I believe that all normal agrarians should take this direction, help our villages to live and develop them.
— You have talked a lot about the exchange of plots today. Maybe you will advise your colleagues to work with chess?
— What should we do to fight against what we cannot influence? The Ukrainian phenomenon of “chess”, was created during the ignition, and with each year it appears more and more. I do not believe in the law on land consolidation. The market itself dictates conditions. With the opening of the land market – there will be areas that will not be treated at all. They will stand on the squares with the drill. Many people believe that after the opening of the land market, the price of it will be space and will stand queues willing to buy it. But the issue of consolidation is price-adjusted, the big layer is very difficult to consolidate. Proposals in hundreds of hectares of managed land, of course, will be interesting to investors, and when it comes to a few shares of 1.5-2 hectares each, I do not think that such an over interest is possible, because the investor will be able to calculate both the return on investment and the cost of invested capital.
Today we observe the new generation of owners. The vast majority of those who have received the death, old age, or have already gone to the best worlds. The new generation is the young people who inherited their own property. Now there is irreversible urbanization, and people are leaving the city, so the question of supporting the village, not to mention its development, is not of interest to anyone. The new generation is not interesting in rent, not interesting in social initiatives, not interesting in roads and lighting, and not interesting in life in the village. Mostly they are engaged in criticism, and in the castle do not offer anything, rarely are ready to work in the village, namely, young people, today, can study new technologies and master modern techniques. The young man tells about the advanced business ideas, about what will start his own business, about the hazelnut in the middle of the field, and nobody thinks about technology, water rise, business processes, etc. People are torn off from reality, and the Internet breeds “interesting thoughts” and leads in the wrong direction.
— What advice can you give to companies that are still working in the old way? Or perhaps those who want to start their agribusiness?
— In the beginning, we need to answer the question – what do they see for themselves in the future? Business expansion? Increase profits? Are they afraid of challenges? Are you ready to take risks? Do you want to just flow around the flow and make everything simple and calm? It seems to me that the majority is going through the course, but few people understand that this is not stability, but the way to business decline.
I am a representative of a generation who is interested in business development. Agro is not a complicated business, because it is connected with rent relations, and it is very risky. There are machinery, there are buildings, and there are people, but if the land bank is rented – it is a very complicated situation because the basis of business is built on rent relations under the conditions of our legislation.
If an enterprise wants to develop, it is necessary to invest in digitization to respond quickly. Time is all! Today, the one who quickly assesses risks and makes decisions wins. Today, the necessary speed can be achieved only with the help of modern technologies and modern programs. Without efficiency – the head always loses time and has no ability to manage risks promptly. Therefore do not run new tools, but analyze them before introduction, choose functions, not pictures.
