Though many investors are piling in, their investments remain small relative to the size of the huge agricultural sector. Last year, Black Earth Farming fields yielded 3.3 tons of wheat a hectare, and the company says it is on track this year to reap 4.4 tons a hectare. “You can’t buy anything like it anywhere else in the world,” he said. Troika is closely watching the transformation of the Russian countryside into an investment opportunity. “The great story of this land is how big it is,” said Kingsmill Bond, chief analyst at the Troika Dialog brokerage in Moscow. What is more, a significant expansion of farming capacity could add to Russia’s heft as a world power, much as its prowess in oil and natural gas aided its resurgence in recent years. It could also reduce malnutrition and starvation. If Russia could regain its old title of leading grain exporter, it would significantly relieve strained world markets and reduce prices, Mr. (A hectare is about two and a half acres.) The average Russian grain yield is 1.85 tons a hectare compared with 6.36 tons a hectare in the United States and 3.04 in Canada. By comparison, all of Britain has 6 million hectares of cultivatable land.Įven 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. 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. “At the same time, and perhaps above and beyond anything else, Russia is a major agrarian power.” “Russia is very often perceived throughout the world as a major military power,” he told a food summit in Rome early in his tenure. Some officials have hinted at the prospect of a government takeover of the farming industry reminiscent of the Soviet era.Īnd Russia’s minister of agriculture, Aleksey Gordeyev, speaks often of food in terms of national security. These investments are also a gamble in a country accustomed to government control of business. 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. 37 pp.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 nobility.Įarlier reformers envisioned the collective farms eventually breaking up into family farms. Ward's model of a co-op (here called the 'Pure Model') (2) a digression on the co-op as a monopoly (3) presentation of the co-op model faced with a realistic supply schedule of labor and (4) summary and conclusions. The paper consists of (1) a re-working, with a generalized production function, of B. An analysis of the essential structure of the Soviet kolkhoze (collective farm)-i.e., a producer cooperative which uses the labor of its members, purchases other inputs, sells its outputs, pays a rent and/or taxes, and divides all or part of its net proceeds among its members. Ward's model of a co-op (here called the 'Pure Model') (2) a digression on the co-op as a monopoly (3) presentation of the co-op model faced with a realistic supply schedule of labor (4) summary and conclusions. The Paper consists of: (1) a re-working, with a generalized production function, of B.

Collective farms