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Russian collective farms become hot capitalist property |
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PODLESNY, Russia: The fields around this little farming enclave are among the most fertile on earth. But like tens of million of acres of land in this country, after the collapse of the Soviet Union, they literally went to seed.
Now that may be changing. A decade after capitalism transformed Russian industry, an agricultural revolution is stirring the countryside, shaking up village life and sweeping aside the collective farms that resisted earlier reform efforts and remain the dominant form of agriculture.
The change is being driven by soaring global food prices (the price of wheat alone rose 77 percent last year) and a new reform allowing foreigners to own agricultural land. Together, they have created a land rush in rural Russia.
"Where else do you have such an abundance of land?" Samir Suleymanov, the World Bank's director for Russia, asked in an interview.
As a result, the business of buying and reforming collective farms is suddenly and improbably very profitable, attracting hedge fund managers, Russian oligarchs, Swedish portfolio investors and even a descendant of White Russian émigré nobi.
Earlier reformers envisioned the collective farms eventually breaking up into family farms. But the new business model rests on a belief that Russia's long, painful history of collectivization is destined to end in large corporate factory farms.
These investments are also a gamble in a country accustomed to government control of business. Some officials have hinted at the prospect of a government takeover of the farming industry reminiscent of the Soviet era.
And Russia's minister of agriculture, Aleksey Gordeyev, speaks often of food in terms of national security. "Russia is very often perceived throughout the world as a major military power," he told a food summit in Rome early in his tenure. "At the same time, and perhaps above and beyond anything else, Russia is a major agrarian power."
Russia occupies an unusual niche in the global food chain. Before the Russian Revolution and the subsequent forced collectivization of farming under Stalin, it was the largest grain exporting nation in the world.
Today, roughly 7 percent of the planet's arable land is either owned by the Russian state or by collective farms, but about a sixth of all that agricultural land — some 35 million hectares — lies fallow. By comparison, all of Britain has 6 million hectares of cultivatable land.
Even excluding the slivers of land contaminated by the Chernobyl disaster or by industrial pollution, Russia also has millions of acres of untouched, pristine land that could be used for agriculture.
Yields in Russia, however, are tiny. The average Russian grain yield is 1.85 tons a hectare — compared with 6.36 tons a hectare in the United
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