Since 1999,
FIELDFARE has undertaken investment in four projects in the Lower Danube
region of Ukraine, largely through its local joint-stock subsidiary,
Salix Ltd. These projects are:
Organic
Vegetable Production
Development
of Ecotourism
Wild
Fish Angling
Biofuel
Production
Additional
information about them is available in the shareholder updates on the
download page.
More detailed
information about the projects, and other similar investment opportunities,
are available on request. Potential investors are referred to the Investor
Information page.
Organic
Vegetable Production
Agricultural
activities in the Lower Danube region are mainly focused on producing
cereals (wheat and maize), oil seeds (mainly sunflower), vineyards,
fruit, some vegetables and water-melons. Animal husbandry comprises
of rearing dairy and beef cattle, sheep, pigs and poultry. About 65%
of the land area in the Lower Danube region is occupied by agriculture,
although the region lies in an agricultural risk zone which suffers
prolonged drought periods; only about one year in five produces good
crop yields under natural conditions.
Accordingly,
large areas of agricultural land rely on irrigation, but excessive over-abstraction
and inappropriate irrigation methods have led to groundwater over-exploitation,
water logging, erosion and salinisation. Agricultural land is also significantly
affected by agro-chemicals used on irrigated crops, oil seeds (rape
and sunflower), in viniculture, and orchards. Mineral fertilisers, where
used, are applied at rates of 0.8-1.0 t/ha, whilst pesticide sprays
were applied at rates from 3.3 kg/ha to 5 kg/ha (for irrigated areas).
Such practices are at best unsustainable, and in some cases highly dangerous,
from an environmental perspective.
As a result,
all the aquifers are contaminated to some extent by pesticides and nitrogen
compounds. In the Lower Danube region, crop diversification is generally
low and rotation is hardly used. This reduces yields and can lead to
increased levels of weeds and pests - biological pest control is less
effective when crop rotation is not used. The absence of crop rotation
also has a negative effect on soil structure and fertility.
Throughout
Ukraine, the agriculture sector has witnessed major reform as land ownership
has shifted increasingly to the private sector and the establishment
of a land market. However,since most land previously managed by state
farms (kholkhozes) are now leased and managed by private companies (generally
comprising the former administrators), the farms still resemble their
former conditions with large field sizes, limited range of crops and
rotations, and decrepit machinery.
Nevertheless,
the liberalisation of the land market (set to start in Ukraine in 2005),
and the reform of the legal status of enterprises can also be important
for the process of developing and implementing environmentally sustainable
agriculture practices in the Lower Danube region. Furthermore, organic
production in the Lower Danube region is gradually expanding, building
on a base of de facto non-use of agrochemicals during the last
decade. Indeed, a few farms in the Lower Danube region have become or
are becoming certified organic producers under the EU organic production
regulations.
In order
to stimulate the local agricultural community to evolve towards sustainability,
FIELDFARE has been working with such local pioneering organic farms
to form an association and assist them obtain EU-recognised certification.
The aim initially is to produce organic sunflower, which can be locally
processed to make high-quality oil.
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Development
of Ecotourism
Since 1998,
FIED has focused its attention on the Lower Danube region. With its
wetlands, steppes and forests straddling the borders of Ukraine, Romania
and Moldova, this region is one of the most outstanding areas in Europe
for its natural, historical and cultural assets. With most of the area
already, or scheduled to be, declared Biosphere Reserve and natural
World Heritage Site, there are great opportunities for encouraging sustainable
development through ecotourism. However, to prevent damage to biodiversity
this requires sensitive investment in accordance with the Global Code
of Ethics for Tourism recently produced by the World Tourism Organisation.
In 2000,
in association with WWF and the European Centre for Eco-Agro Tourism
(Amsterdam), FIELDFARE prepared a preliminary strategy for improving
the infrastructure for ecotourism in the Lower Danube Region, focusing
on the extensive local protected area system.
A more detailed
FIED Strategy for Ecotourism in the Lower Danube Region was prepared
in July 2002, based on experience from two pilot tours conducted in
2001, and a first commercial tour in May 2002. It sets out a framework
for activities to promote the area as a desirable place for nature-based
holidays. In addition, the implementation of the strategy will achieve
the aim of "tourism for biodiversity" by providing a range of benefits
for the region, including:
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Generation of income for local people
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Raised awareness of the value of local nature for attracting tourists
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Policy development and intervention to forestall intensive tourism development
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Conservation and restoration of natural areas
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Knock-on benefits for promotion of organic agriculture and energy efficiency
The investment
plan to implement the Strategy covers the period from 2003 - 2012 and
is expected to have an internal rate of return of 23%.
As a part
of the strategy, has purchased a building of 250 sq.m. near the Danube
boat station in the town of Vilkovo which is being renovated as an Ecotourism
Information Centre.
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Wild
Fish Angling
Because of
a long period of mismanagement and high nutrient inputs that encouraged
algal growth, the wild fish stocks in the Danubian lakes had declined
to a very low level by the mid-1970s. Stocking with exotic species commenced,
and today the local fishery is dominated by grass and silver carp from
China.
However,
these fish require high investments (especially electricity and food)
for rearing fingerlings and, at the same time, command the lowest prices
in the markets. Consequently, the fish economy is in depression and
some rearing ponds near to Lake Kartal (a Ramsar wetland) are now abandoned.
FIELDFARE
has worked with local fish companies to prepare an investment proposal
for improving water quality by establishing a sport fishing centre.
Unused fish rearing ponds will be relandscaped and stocked with game
fish such as wels catfish, common carp, and pike. Basic but adequate
accommodation will be constructed for anglers.
The plan
would not only provide much-needed employment and profits for local
people, but also demonstrate the value of restoring the lakes to a natural
state and regenerating the former wild fish stocks.
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Biofuel
Production
The Lower
Danube region has considerable resources of renewable biomass (reeds,
willow and poplar), yet at the same time has a fuel deficit which encourages
felling of the valuable Danubian riverine forest.
In cooperation
with an American manufacturer of biomass briquettes, and funded by WWF,
FIELDFARE has carried out a technical and economic study of the potential
for producing fuel pellets from biomass, much of which could be generated
from protected area management operations.
The study
indicated that while there were few technical hurdles and considerable
ecological benefits from biomass pellet production (e.g. carbon neutral
and maintaining healthy reedbeds), the likely prices in the local markets
for such a fuel would be too low to generate a return on the investment
required. However, there are opportunities for attracting development
grants and exporting fuels to power stations upstream on the Danube.
The company is now investigating these possibilities.
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