Russia Agri Land Relative Bargain Among World’s Wheat Exporters

The third largest exporter of wheat in the world as of last season’s harvest, Russia has the least expensive land among six grain exporting regions.

Data analyzed by the SovEcon consultancy revealed that Russia’s most expensive farmland is in the southern Krasnodar region. Land there sells for an average of $1,711 per hectare (2.47 acres) which is cheaper than land in the United States, European Union, Brazil and Argentina.

In France and Germany a hectare costs about $11,250 on average; about $9,000 per hectare in the United States; in Brazil about $7,000 per hectare; and in the eastern EU and Argentina $4,500 per hectare, according to market research from SovEcon.

Sustainable Agriculture in Russia and the Ukraine

AG Chat, an executive interview series, interviews business experts, investors and entrepreneurs who are leaders in sustainable agriculture.

During a recent AG Chat, Marc Dresner interviewed George Rohr, co-founder and president of NCH Capital.  For almost twenty years, George  Rohr and the institutional funds he manages through NCH  have been investing in Eastern Europe and the former Soviet Union.

George Rohr explained to Dresner, “There is a massive shortage of capital that prevails across asset classes, across the geography — across eleven time zones.”   NCH has the goal of helping to bring “some of the most productive farmland in the world back into productive capacity.”

As Rohr pointed out, few Western investors have shown  interest in this fertile area.  NCH  has managed to acquire over 700,000 hectares of high-quality farmland in Russia,  Ukraine and other Eastern European countries.

As Rohr explained, “You are going to see increasing diversification in [Russia and Ukraine] away from such heavy dependency on natural gas, oil and other hard commodities as a source of foreign revenue, toward agricultural commodities. The agricultural sector really is the sleeping giant for both countries.”

New Agribusiness Association Forming

In important news in the agribusiness industry, a new agribusiness association is being created by the Customs Union of Belarus, Russia and Kazakhstan. This new association will include representatives of each of the industry unions and associations that is involved in agribusiness for each of these three countries.

An agreement was reached to create this association during the foundation meeting of the Agribusiness Association of the Customs Unions in Moscow when they met on July 26th, 2011. In attendance at that meeting were: First Deputy Agriculture and Food Minister of Belarus Nadezhda Kotkovets, Russian Agriculture Minister Yelena Skrynnik, and Agriculture Vice Minister of Kazakhstan Saktash Khasenov.

The present goal is for the first founding convention of this new association to take place in October of 2011.  The supervisory board will be led by Russian Agriculture Minister Yelena Shrynnik.

The goals of the new Agribusiness Association are many.  They plan to harmonize agribusiness policies on the common market while ensuring food security and working to keep stability in the domestic market.

In addition, the Association hopes to develop the export potential for all three countries, create joint infrastructure of the agricultural food market, and create better conditions for mutual investments.

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