Yevhen Dudka on MHP’s Land, the American Approach to Agriculture, and Why Ukraine Should Not Be an Agrarian Country

Latifundist.com: Yevhen Stepanovych, we’re glad to be back in Volyn. We’re meeting with you at 7:00 a.m. I remember when we first met – you had a rule: top management arrives at work at 7:00. Is that still the case?

Yevhen Dudka: I’ve become a bit more lenient. Now they come in at 7:30 (smiles).

Latifundist.com: Has this rule changed in any way overall? Because there’s a lot of talk these days about the new generation, “zoomers,” and a different approach to work. I can imagine what it would be like to tell a young manager, “Be here at seven in the morning – on the dot.”

Yevhen Dudka: Actually, when management comes to us – from Kyiv, for example – it’s really hard for them to adapt to this schedule. For them, 7:00 a.m. is very early. But that’s okay; they get used to it.

From a generational perspective – yes, Gen Zers require a different approach. But there are a lot of talented and interesting people among them. And, by the way, there are “early birds” among them too, just like me.

Latifundist.com: You’ve often emphasized in the past that preserving the company’s regional identity is important to you. Yes, the company is growing, expanding beyond Volyn, and during the war – as far as I recall – you significantly expanded your land bank. But isn’t the company’s family DNA getting lost as it scales up?

Yevhen Dudka: These days, we no longer actively promote the idea that we’re strictly “just from Volyn.” But our hospitality, our love for Volyn, and our connection to this region – all of that runs through our company like a common thread. We’re authentic. And very often, in agricultural circles, Volyn is associated specifically with us.

We are patriots of our region. There’s a song called “My Volyn.” It includes the lyrics: “My Volyn, my beauty…” For us, these aren’t just lines from a song.

By the way, our event (the company’s 25th-anniversary celebration) will take place at a former collective farm airfield. And it’s symbolic that Stepan Kryvenkyi – the lyricist of “My Volyn” – was born right next to this airfield. That’s why this connection to the place, to the land, to Volyn – is truly important to us.

Latifundist.com: Why did I ask about the “family” aspect? Because in Western corporate culture, it’s often said these days that promoting the “family-like company” image is a risky proposition. In a family, boundaries can become blurred: someone takes advantage of others, exceptions are made for certain people, and some start to confuse loyalty with effectiveness. How do you draw the line for yourselves?

Yevhen Dudka: First of all, we won’t let anyone walk all over us. That’s the first thing.

Second – we travel to the U.S. very often, and when we talk to American farmers, they say, “I’m a seventh-generation farmer.” And we reply, “And I’m a first-generation farmer from Ukraine.”

That’s why it’s important to set the right priorities here. If the children want to work in the business – by all means. But on equal terms. They shouldn’t receive special treatment just because they’re the owner’s children.

We make a clear distinction between the role of a shareholder and that of an effective manager. If a person can work on equal terms, grow, deliver results, and eventually become a top manager – by all means.

Take my daughter Lilia, for example. She joined the company while she was still a student – she started as a lab assistant, working part-time. Then, at the same time, she earned another degree in agronomy because she understood that to sell, you need a solid foundation in agronomy.

Later, she became a regional manager, and then headed up an entire division. She rose through the ranks not because she’s my daughter, but because she worked hard and delivered results.

The Scope and Maturation of “Vilia”

Latifundist.com: Have most of the people on your top team grown up within the company? Or, as the company expands in terms of both land and assets, are you now recruiting more managers from the market?

Yevgen Dudka: If you think about it, people we’ve poached from the market tend to have a very hard time fitting in with us. Or they don’t fit in at all. They come in, work at the company for a while, and then we go our separate ways.

Although times are changing, and approaches are changing too, most of our leadership still consists of people who’ve grown up within the company. As a rule, it’s a path from entry-level employee to top manager.

Latifundist.com: Was there a moment when you realized: the company has gotten so big that you don’t know everyone by name? When did that point come?

Yevgen Dudka: I think it happened when we crossed the threshold of 1,000 employees.

Latifundist.com: Let’s take a look at the company’s current scale. How much land, assets, and staff does “Volyn-Zerno-Produkt” have today?

Yevhen Dudka: As of today, we operate about 65,000 hectares of land. We have 600,000 metric tons of storage capacity, 120 trucks dedicated solely to grain transportation, and 60,000 metric tons of processing capacity. And we have a wonderful team – 1,382 people.

Latifundist.com: You’re 25 years old. Just a journalistic question: What are the three turning points in the company’s history that made “Volyn-Zerno-Produkt” what it is today?

Yevhen Dudka: To make money, you need courage. To make a lot of money, you need a lot of courage. But to preserve a company, you need wisdom. And to preserve a large company, you need great wisdom.

If we look at it in cycles, the first stage was the beginning of our entrepreneurial journey. Back then, we had the courage, the desire, and the energy to get started and get to work. That was the stage spanning roughly the first ten years, when everything rests on your shoulders.

Latifundist.com: That startup spirit?

Yevgen Dudka: Yes, the startup spirit. That’s a great observation.

Later on, you end up burdened with infrastructure, real estate, and transportation. And you start to realize that all of this needs to be managed. You have to structure it and make it work as a system.

There’s a point when you’re not yet structured, but you already realize that you can’t keep going with the old approaches. And yet, you’re still charging ahead.

In 2008, we were effectively bankrupt. When the dollar rose from 4 to 8 hryvnia, we already had loan portfolios, real estate, businesses, and transportation. And at that moment, we realized: if we didn’t change anything, the company wouldn’t survive.

That became a turning point and the transition to the second stage. We realized that we needed exports, foreign currency revenue, new approaches, and momentum.

I gathered the management team and said: “Salaries are cut by 25%; I can’t guarantee an annual bonus. If we make it – we make it. If we don’t – well, we don’t.”

That’s when we moved into exports and foreign currency revenue. It was a fundamentally new step – the company launched grain trading, and we began moving toward building grain elevators. And at the end of the year, I made up the full 25% for everyone and paid out a generous annual bonus.

The Boundary of Controllability and the Control Model

Latifundist.com: Back in 2019, you said that the company’s strategic goal was 30,000 hectares of land. At the time, you mentioned that you saw greater potential for growth through cooperation with local farmers, and that about 100,000 hectares were to consist specifically of farmland managed in partnership with them. You now have 65,000 hectares. Haven’t you exceeded the limits of manageability?

Yevhen Dudka: So far, we’ve physically added only one plot. Previously, we calculated it this way: six plots of 5,000 hectares each. From a management perspective, that’s a manageable number for a single plot manager.

But times are changing. We have Cropio, electronic monitoring tools, GPS, and smart agricultural equipment. So these plots have effectively doubled in size, but the number of people working on them has remained the same.

Latifundist.com: Do you take a decentralized approach in your plots? What are the limits of a plot manager’s responsibility? When does the manager make decisions independently, and when does the central office step in?

Yevhen Dudka: We position ourselves less as a vertical holding company and more as a kind of cooperative within the company.

We have branches, and they’re fairly independent. The central office serves in an advisory capacity, setting certain frameworks, approaches, and providing expertise. But on the ground, all key operational decisions are made by branch managers and specialists.

"I paid an exorbitant price for MHP's land"

Latifundist.com: As you’ve already mentioned, your land bank has effectively doubled during the war. Specifically, as far as I recall, last year or early this year, you purchased about 6,000 hectares from MHP through corporate rights. Market rumors suggest that this deal caused the market to “overheat” somewhat and set a psychological threshold of around $3,500 per hectare. Why was the price so high? Did you negotiate?

Yevhen Dudka: Look, I paid an outrageously high price. Why? Because we understand that our strategy is to focus on high-quality land. This was precisely high-quality land. And, very importantly, land with good moisture retention.

We’re thinking long-term. If we were to approach this today as a new project, it wouldn’t have worked out. Because a new project means infrastructure, people, equipment, vehicles, and supplies.

But in this case, we expanded our existing plots to 10,000 hectares. To put it simply, if you add another “three” to our “seven,” the math changes completely.

We see a certain average profit there and estimate that this investment will pay for itself in about seven years. And for me, any business that pays for itself in seven years is worth pursuing.

Latifundist.com: Speaking of future growth: are you a regional company, or are you already looking to expand further? Do you have a target – 80,000 hectares, 100,000 hectares? Or do you take on everything you can manage effectively?

Yevhen Dudka: We’re a regional company. Not national – specifically regional.

And today, the issue for us is no longer the specific size of the land bank. The question is whether we can effectively manage this land without a proportional increase in staff. The same staff that previously managed 5,000 hectares can now manage 10,000 hectares.

Latifundist.com: Before the land market launched, there was a lot of talk that it would be a wake-up call for the holding companies. That small farmers would start “nibbling away” at the land owned by the big players. But now, especially during the war, it seems that the big players are actually getting bigger. Do you see that?

Yevhen Dudka: To be honest, I don’t really notice that. Size doesn’t matter. What matters is the quality of management.

I believe a farmer can be successful on 50–100 hectares. He’s the tractor driver himself, he goes out into the fields himself, he loves every single plant he grows – and this model works.

I believe a 500-hectare model can work too. Go to the U.S. – you’ll find all kinds of models there, and they all work. Where there’s effective management, there will be results. That’s all there is to it.

Latifundist.com: Over the past few years, we’ve seen some businesses lose assets in the occupied territories and begin relocating to western Ukraine. Consequently, on the right bank – and especially in the west – the land market seems to have overheated. Do you feel that prices have gotten too high and are due to come back down?

Yevhen Dudka: I don’t believe the market will cool down. Competition exists and will continue to exist.

In my opinion, Ukraine’s agricultural sector should follow the American model: fierce competition, no subsidies, and efficiency. Why don’t I believe the market will cool down? Because where there is efficient farming, there is money. And where there’s money, there’s always competition.

Latifundist.com: Agriculture remains one of the few sectors where there’s money. But, to be honest, even though I’m the editor of an agricultural media outlet, I’m not particularly thrilled by the idea that Ukraine is becoming an agrarian country.

Yevhen Dudka: Kostya, I completely agree with you. When people say we’re an agrarian country, it upsets me.

We should have a top-notch, very strong agricultural sector – one that’s better than in the U.S., better than in the Netherlands. But we shouldn’t be just an agrarian country.

Ukraine must be a technologically advanced, successful, and modern country. And the label “agrarian country” is even a little offensive to me personally. Although I love agriculture and am a huge fan of it.

Latifundist.com: Will non-agricultural businesses continue to enter the agricultural sector? Could a new major player emerge – say, a new “OKKO” in the agricultural sector?

Yevhen Dudka: I think so. Look, there are restrictions on moving capital out of Ukraine. People are reinvesting their money somewhere. And where should they reinvest? In agriculture. Because it’s predictable. It makes sense.

Latifundist.com: Since the launch of the land market – particularly for legal entities – you’ve advised landowners not to sell their land. You said: “It’s an asset; hold on to it.” Now land prices are rising. Does your advice still stand?

Yevhen Dudka: Yes. Purely cynically, as a businessman, it’s in my interest for people to sell. But as a Ukrainian, I say: no, don’t sell your land.

Because even if the price has gone up, look at how much inflation has risen during that time. What was $100 worth 20 years ago, and what is it worth now? The difference is enormous.

Kostya, what year were you born?

Latifundist.com: 1988.

Yevhen Dudka: The last millennium. You remember what $100 was worth in 1999–2000, right?

Latifundist.com: Yes.

Yevgen Dudka: And what is $100 worth today? It’s the same with land. Nominally, the price is rising. But against the backdrop of high inflation, land still remains an asset that’s better to hold onto.

The American Way to Europe

Latifundist.com: You say that Ukraine’s agricultural sector needs to follow the American model: fierce competition, efficiency, and no subsidies. But we’re moving toward Europe, where the model is completely different – rules, regulations, subsidies, and environmental requirements. How can we reconcile these two approaches?

Yevhen Dudka: With a prenuptial agreement.

When we talk about joining the EU, we need to spell out this prenuptial agreement very clearly. We have to separate the rules of the game for the European market from the rules of the game for other markets – Asia, the Black Sea, and the Mediterranean.

On the one hand, we must adopt approaches to agriculture that meet European standards. On the other hand, we must clearly understand that the Asian markets, as well as the Black Sea and Mediterranean markets, are also our markets. And we need to maintain them, develop them, and remain competitive there.

Europe operates with its own subsidies and its own rules. So, we need to negotiate: which part operates under these rules, and which part under others. It will be difficult. But, in my opinion, this is the only way to properly draft this “marriage contract.”

Latifundist.com: I specifically looked into this issue and asked experts on European integration about it. They say, “You can’t enter Europe with half-measures.” Either you accept the rules, or you don’t. Tomorrow they’ll tell you: “Yevhen Stepanovych, 10% of arable land must be taken out of production. It must be used for green manure crops, biodiversity, bee corridors, water bodies, and ecological features.” Are you prepared for such a scenario?

Yevgen Dudka: Just a second. But will this apply to everyone?

Latifundist.com: To everyone.

Yevgen Dudka: So, the environment will be competitive. That’s all there is to it.

If the rules are the same for everyone, then everything is clear. We’ll earn less in some areas and more in others. We’ll have to cut costs in some areas, save in others, and seek additional efficiency in still others.

But business should be stable: there are rules, they’re the same for everyone, and they must be followed.

Latifundist.com: What if an official comes to you tomorrow and says, “This mill shouldn’t be here because it doesn’t comply with the new rules.” What then? You’re a farmer; you’re used to working on your own.

Yevhen Dudka: Then we’d have to shut down this mill and build a new one – one that meets the requirements. If you want to be in this market, you have to follow the rules.

By the way, during the war, we’ve obviously lost a lot. We’ve lost friends, acquaintances, peace of mind, time, and space. But at the same time, we didn’t stand still. During this period, we’ve completed three major projects. The first is the “dry port.” The second is the mill on whose roof we’re standing right now. And the third is the seed processing plant.

We’re already building new facilities to “Europe Plus-Plus-Plus” standards. As for the old facilities, if the need arises, we’ll have to make a decision: either shut them down or renovate them and do things differently.

Latifundist.com: Does this apply to livestock farming as well? Because before the war, you mentioned plans to build a new livestock complex.

Yevhen Dudka: Yes. And I’m actually, to some extent, even glad that I didn’t build the farm back then. Because at the time, I was trying to squeeze it in somewhere within the boundaries of a populated area. But if you’re building today, you have to do it differently: you buy land shares, build a kilometer of road, move the facility to where it needs to be, and build it right the first time.

We Ukrainians – and farmers in particular – need to change our mindset.

We’re not just farmers who “ensure food security.” We’re businesspeople running a pragmatic business.

That’s why every approach must be viewed through the lens of investment from the start. If you’re investing – do it once and do it right. Don’t just rely on what you have on hand today.

Although, when it comes to the company’s stages of development, it’s clear that times have varied. There were periods when we made do with whatever materials were available. It worked, made money, and then allowed us to build the way we needed to.

Livestock farming will have to wait for now

Latifundist.com: Before the war, you had planned to finish building a dairy farm, but ultimately invested the money in a dry port. Is the idea of the farm still on the table?

Yevhen Dudka: As soon as the war began, we clearly understood that we needed to build a new logistics facility. During that time, we completed construction of the terminal. And the money that had been earmarked for the livestock complex was redirected there. It was an either-or situation. Under wartime conditions, you can’t fully rely on bank financing – you operate mainly with your own funds. And livestock farming is a very difficult business with a fairly long payback period. Today’s milk prices clearly demonstrate this for many. Building such a complex with borrowed funds isn’t really a viable option either.

Latifundist.com: Speaking of milk, do you sense any collusion among the dairy plants?

Yevhen Dudka: It’s very simple: there’s supply and there’s demand. Today, milk consumption within Ukraine has decreased because so many people have left the country. Demand has fallen, while supply has risen. So I wouldn’t talk about any cartel-style collusion. There’s a producer’s year, a seller’s year, and a buyer’s year. Right now, it’s the buyer’s year.

Latifundist.com: You also planned to expand your pig farming operations. As far as I recall, the plan was for two phases of 7,500 head each. What’s the status there?

Yevhen Dudka: My position is very simple: everyone should stick to their own business. But the overall strategy for the agricultural sector must ensure that the “stomachs” are definitely part of this ecosystem. For me, the best option is to find a partner who is a professional in this business. I’m even willing to be a minority partner in such projects: we can provide raw materials, land, and space, and do everything necessary to make this model work.

Latifundist.com: You used to have a rule: organic matter had to be applied to every field once every four years. Has this approach changed now?

Yevhen Dudka: Today, we’ve already moved to applying organic matter every two years. This isn’t always factored into the calculations. But you have to treat it as an investment.

Latifundist.com: If you were faced with a choice today – to build a new farm or buy more land – which would you choose?

Yevhen Dudka: Definitely, to expand my land holdings. I ask this question every time to any farmer in America or Europe – they all unequivocally say that if they had to choose between a new combine, a new farm, and a piece of land, they’d choose the piece of land.

Margins in Agribusiness

Latifundist.com: I once watched your 2019 interview. You said something interesting back then: that crop farming is currently experiencing a golden age, but it won’t last forever. Rent will rise, environmental requirements will become stricter, and margins will start to shrink. At the time, it sounded a bit like a prediction. What made you think even back then that things were heading in exactly that direction?

Yevhen Dudka: When there’s easy excess profit, sooner or later it returns to normal levels. Either rent goes up, or resources become more expensive, or product prices fall. It doesn’t stay that way forever.

Look at the situation today: have land rents gone up? They have. Fertilizers, pesticides, fuel – everything is getting more expensive. Wages are rising. Administrative costs are rising. But prices for agricultural products aren’t rising at the same pace.

If you don’t change anything, your margin simply shrinks. And then you either become a low-margin operation or start operating at a loss. Or you begin to restructure: you improve efficiency, adopt new technologies, and change your mindset.

Latifundist.com: You were already actively working with Europe at that time. Did that also influence this vision?

Yevhen Dudka: It’s more about diversification. I sincerely believe that either we or our children will live in a civilized world. But we have to pave the way to that world.

Reputation isn’t built in a day. People need to know you and trust you.

That’s why I sometimes deliberately sell my own grain to Europe, even when it’s $5 per metric ton less profitable than shipping it to the port. Based on our volumes, that amounts to over $1.5 million in lost revenue.

But I’m not just buying a contract. I’m buying a reputation and long-term relationships.

Latifundist.com: We’re standing on the roof of the mill right now. You’ve said more than once that you got into processing even though you knew full well that the margins there are significantly lower than in crop farming. Why?

Cooperative and cooperation – what's the difference?

Latifundist.com: You often distinguish between the concepts of “cooperative” and “cooperation.” I recall that at Grain Ukraine, you said that about 30% of your initial plans for cooperation had been implemented. Why is that?

Yevhen Dudka: Because 30% is already a good result.

We realized that Ukrainian farmers aren’t ready for a traditional cooperative just yet. There isn’t enough trust for that yet. So we took a different path – through commercial cooperation. Joint procurement, logistics, exports, and planning.

For example, everyone remembers the problems with the physical availability of fertilizers this year. Those partners who had been working with us in advance were fully supplied. We took care of the logistics, and in fact, they didn’t even feel the problems that were plaguing the market.

In my opinion, we still need at least two more generations before we can achieve true cooperation.

Latifundist.com: What advice would you give today to a farmer who has some spare capital?

Yevhen Dudka: I really like the Norwegian model. When the government had a surplus of funds, it created a strategic fund and began investing those funds in long-term projects – things like our mill, so to speak.

Of course, farmers have their own mindset. If you have a million dollars and there’s land nearby selling for a million, you’ll buy the land first. And that’s normal. But there are also the challenges of today. If you don’t replace your equipment in time, you won’t be able to ensure higher-quality cultivation or operate with fewer people. That’s why you need to think not only about land, but also about equipment, processing, and infrastructure – about assets that strengthen your core business.

We have our own investment system. One of the rules is “seven years.” If an investment can pay for itself in about seven years, we’re interested in that project.

After that, we distribute the profits according to a clear formula. We allocate 10% to support the Armed Forces. Another 10% goes “home,” so to speak, although in reality I hardly ever take that money for myself.

We always reinvest 30% back into the business that generated the profit. If a grain elevator earned 100 million UAH in a year, then 30 million UAH must be reinvested into the elevator – for its development and stability. Another 30% goes into a reserve fund within the company. This serves as a safety net in case of a crisis, crop failure, or other unforeseen situations.

And we can allocate 20% to new projects. A portion of these funds – approximately 5–10% – can be invested in startups or higher-risk ideas, with the understanding that these ventures may even fail.

Latifundist.com: Finally, if you were to go back 25 years, what would you say today to that young Zhenya who was just starting to build his business?

Yevgen Dudka: Get up earlier (laughs). Learn English. Study more. And also… spend more time with your family.

The truth is, we were never lazy. I remember how, in the early years of the business, every Saturday at 7 a.m., we’d meet at a gas station for coffee so we could coordinate who was doing what and where everyone was heading.

But success comes at a price. I barely saw my children grow up. I tell my wife, “My kids never cried.” She replies, “They did cry. You just weren’t there.”

So to my younger self, I’d say: Spend more time with your family. And study more. Everything else, I think, will work out on its own.

Kostyantyn Tkachenko