Ukraine's most important product is bread. Our bread number two is potato. Potatoes have been a symbol of survival for the past four generations of Ukrainians. It is widely-accepted that people do not starve in places where potatoes grow. I am convinced that it became our second bread in the Soviet years of starvation and famines.
Potatoes have been cultivated in Ukraine since the reign of Tsarina Catherine II and in Russia, people started to grow them under Peter the Great. This vegetable, which originated in the mountainous areas of South America, was slowly adapting to new climates, and even caused several potato revolts. Then we invited German cultivators that taught us to grow, transport, preserve, and eat it. Up until the most deadly famines in the end of the eighteenth century, potatoes had been used to produce starch and alcohol.
Famines led to the spread of potato cultivation. Villagers and city dwellers grew potatoes to save their lives. In the years of famine, potatoes were consumed as bread. Even families having a small plot (in the blockaded Leningrad they used flowerbeds and lawns) could grow potatoes.
The state was also interested in potato growing since it allowed the imposition of taxes on their growth. In fact, each peasant was required to give the state each year 120 kilograms of potatoes, 20 kilograms of meat, 200 liters of milk, 120 eggs, and also pay land and fruit-tree taxes. If they refused to pay, their plots were confiscated and they starved to death. These rules were still in effect as late as 1955 when Khrushchev assumed office in the Soviet Union.
The state gave workers and clerks small plots to cultivate potatoes, considering this as a bonus allowing potato growing to supplement their small salaries. Those persons who ran the Political Bureau of the Communist Party believed people would survive having potatoes and so introduced this barter to exchange talents and hard work for food.
Naturally, the country still did not have enough potato to satisfy its needs. Neither taxes, nor the growth of kolkhozes helped. There was no motivation to cultivate this time-consuming vegetable. Potato prices were ridiculously low, bringing scant profits to farmers.
Khrushchev doubled the price and helped kolkhozes by sending millions of city dwellers to gather potato crops. Hundreds of potato farms with uncomfortable barracks for the urban growers were built around cities. This measure helped stabilize the situation but the potatoes produced were not always of high quality. You could only buy good but expensive potatoes at open-food markets.
Later, after independence when the country was changing into a market economy and kolkhozes were being phased out, retail potato prices grew. This stimulated private cultivation. The nation's natural economy began to revive. Even Ukrainian celebrities bought plots, cows, and chickens. Then prices stabilized, but over the past five years they have been growing again to reach the equivalent of one dollar per kilogram in some places. This inflation happened because big potato farms had resumed their activity and people chose not to cultivate potato on private plots, which resulted in a 30 percent potato deficit. The population was slightly shocked. They knew it would make all other prices grow. Among Ukraine's inflation indicators are bread, vodka, potato, and fat.
There is a popular story about a worker that was asked how much his labor cost. He said it cost half a liter of vodka. Then he was asked what the price would be if vodka prices doubled, and he replied that it would still cost half a liter of vodka.
No one will be able to decrease potato prices, for prices always grow in transition economies. The potato market was disarranged by the Soviet planned economy. Last October, potato prices first reached the international level of the regional market in Poland, Slovakia, and Hungary.
So today we can easily forecast the development of potato cultivation and potato price increases. In 2006, three-hectare plots will appear. Then there will be a demand for potato equipment and productive potato varieties. The National Potato Institute, which has been working in vain for fifteen years, will revive. Seed companies will become profitable again. The potato industry has almost overcome this artificial discrepancy between prices and production costs. It coincided with the U.S. resolution to recognize Ukraine as a market economy. Our country has fewer non-market industries than before.
Another serious problem of our government is low municipal tariffs, introduced back in 1927. The system has been slightly improved since then but cardinal reforms have been postponed for years because the government is afraid of raising the tariffs without increasing salaries. The best solution is painful. It will be the best solution out of the worst solutions, for there are no best solutions at all.
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