Competitive advantages and disadvantages of agriholdings and independent farms - a case study from Ukrainian arable production

This article analyses the competitive advantages and disadvantages of agriholdings and independent farms in Ukrainian arable production using expert-based focus-group discussions and comparing typical farms with a cost-of-production approach. Agriholdings were found to have strong competitive advantages in access to and cost of capital, as well as more favourable input and output prices. On the other hand, they are less efficient, with lower yields and higher overhead costs than top-performing independent farms. At the bottom line, typical well-performing independent farms were found to generate a higher return to land than typical agriholding member farms of the same size. If agriholdings can overcome their efficiency challenge, the economic gap may close in the future. A likely way to accomplish this was found to be decentralization and strengthening of farm-level management.

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