For Petrenko's seed is not just any old seed. It is top class seed wheat, with the potential to significantly boost the average crop productivity of Ukraine's beleaguered farms.

Even at subsidised state prices, it should be a gold mine for his Pamyat Chekista collective farm, located on rich, rolling farmland an hour or two's drive from the sunbaked Black Sea Port of Odessa.

The seed certainly is in high demand all over Ukraine: out in the yard, a truck pulls in from a farm in the distant eastern Donetsk region to collect its order for the forthcoming winter sowing season.

But while the cows grazing along the grassy village green look a picture of contentment, all is not as idyllic as it might seem at Pamyat Chekista.

Founded as a dedicated seed fund to grow cultures from a leading grain institute in Odessa and to sell the super seed at subsidised prices, the elitefarm has had to turn to raising pigs to make ends meet.

Petrenko says customers owe Pamyat Chekista 250,000 hryvnias ($125,000) for seed, which he nevertheless continues to parcel out with a shrug and a prayer that maybe next harvest his clients will be able to pay off their debts.

"I keep giving out seed as credit -- what else can I do?" Petrenko smiles wanly. "Just let it rot in the silos?"

Appearances can be deceptive: Thanks at least in part to Petrenko's entrepreneurial flair, things could be much worse at the collective.A row of new two-storey concrete cottages fans out from the end of the broad, tree-shaded main village road, and a new school, paid for through barter, is having the finishing touches put on it up on the sunny hill above the village.

Members are owed only one month's wages, which is almost something to boast of in a country where thousands of workers have not been paid for several months.

But the farm's bank account has just been frozen for missed payments to the main statepension fund.

"We didn't pay the pension fund because we weren't paid for seed," Petrenko said back in his office. A shiny poster for a brand new red Massey Ferguson combine harvester hangs over his desk but the electric lights fail to turn on.

Drought earlier in the summer affected crops in several regions, making the prospects for payment -- and for the customer farms themselves -- dim.

"If I don't give them seed, they will go bankrupt," Petrenko said.

Farm caught in vicious circle of debt:

Petrenko's dilemma neatly illustrates the vicious circle choking Ukraine's once legendary grain sector.

Dubbed the "breadbasket of Europe" before Soviet dictator Josef Stalin forcibly collectivised the country's farms, Ukraine harvested just 14.2 million tonnes of wheat this year, down from 17.3 million tonnes last year.

With the overall 1998 grain harvest 94 per cent complete, Ukraine says the crop is just 22.8 million tonnes compared to last year's total grain harvest of 35.7 million tonnes and 1990's 50million tonne harvest.

Crop yield is a sorry 2.28 tonnes per hectare compared to much higher yields in western Europe.

Even at state-subsidised prices, cash-strapped farms cannot afford to buy new seed that could boost productivity and, in theory, profitability.

"They are having difficulties, so they go and sow exactly the same seeds year after year, and the harvest yields less and less every year," Petrenko said, adding he had called on the regional government several times to set up cheap credits for farms to help them break out of the pattern.

Interest rates currently stand at around 80 per cent in Ukraine, which has been struck hard by financial turmoil in neighbouring Russia.

"If they would even give an interest rate of 20 per cent...but it won't happen," Petrenko trails off, shaking his head.

Farm still brings home the bacon:

Nor do farms have the cash to buy the pesticides, fertilisers, machinery, fuel and oil they need to ensure that the seeds give optimum yields. As a result, they arevulnerable to the vagaries of the weather from year to year.

Pamyat Chekista boasted an enviable average yield of 4.5 to 5.0 tonnes per hectare from its seed, specially adapted to Ukraine's severe continental climate, compared to the 2.4 tonnes per hectare which officials said the Odessa region averaged as a whole this year.

But officials at the Genetic Selection Scientific Research Institute in Odessa said even Pamyat Chekista struggled to meet all the crop requirements and that its crops should give even higher yields under the right conditions.

Pamyat Chekista's mandate remains to act as a premier seed fund. But under the circumstances, the farm's pristine pens of premier pigs, whose number now stand at over 1,000 head and growing, are taking on a growing significance.

Petrenko bids visitors to disinfect their shoes carefully before entering a freshly converted and whitewashed pig pen, where litters of tiny piglets swarm around enormous mothers flopped languidly on their sides.

Easily sold forquick cash, the piglets are among the farm's most liquid assets at the moment and are even used to pay worker's salaries, Petrenko says.

"Our future wealth!" he smiles as he shuts the door carefully again and strides off across the farmyard.