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The Times
July 29, 2006
Go East: pioneer farmers find Russia a
land of opportunity
BY JEREMY PAGE
AFTER an hour’s drive along mud tracks lined with cornflowers,
dandelion and ragwort the farmer stops and points to a copse on
the horizon, deep inside Russia’s “Black Earth” belt. “Everything
you can see from here is ours,” he says, swatting a horsefly from a
sun-tanned brow.
In every direction, as far as the eye can see, the land is carpeted in
waist-deep wheat, so dense and golden it seems to glow in the
afternoon sun.
It looks like the stuff of a Soviet propaganda film.
Thirty years ago it might have been. Only this farmer is not
Russian. He is Colin Hinchley, a 44-year-old former contract farmer
from Nottingham.
And this 12,000-hectare (30,000-acre) farm in the Penza region in
southern Russia is owned not by Russians but by a pair of British
investors — the first foreigners to buy agricultural land in Russia.
“It’s just awesome,” Mr Hinchley said, shaking his head in disbelief.
“The average British farm is 350 acres. You could fit three of them
in this field.”
Mr Hinchley is a pioneer, one of a growing number of British
farmers heading east to escape the crippling bureaucracy and
diminishing returns of agriculture at home.
He is now being held up as a model for Russian farmers and
investors seeking to regenerate their countryside and reclaim
Russia’s historical status as an agricultural superpower.
In 1913 Tsarist Russia produced a record 90 million tonnes of grain
— a third of global supply at the time. In 1990 output hit a Sovietera high of 117 million tonnes.
Grain production plummeted, however, after the Soviet collapse,
when subsidies dried up and collective farms divided their land and
machinery between their workers.
This year Russia is expected to harvest only 75 million tonnes, 3
per cent of the world total, from 10 per cent of the world’s arable
land.
The Ministry of Agriculture estimates that Russia has the potential
to feed a billion people and yet, with a population of 143 million, it is
a net importer of food.
And with the global grain harvest expected to fall short of
consumption this year, millions of acres are lying idle in one of the
most fertile farming areas on the planet.
Mr Hinchley spotted the anomaly when he first visited Russia in
1996 on a harvesting team working around the southeastern city of
Voronezh.
The country he found was grim and chaotic, still gripped by the
death throes of the Soviet Union. Compared with farming in Britain,
though, it was a breath of fresh air. “I was on a treadmill to nowhere
in the UK. There was so much paperwork. It was getting harder and
harder to move on the roads. You got so much abuse,” he said.
“People here respect farmers and food producers.”
He started looking for land in the “Black Earth” belt, where the soil
is equivalent to Lincolnshire’s Grade 1 silt.
His chance came in 1998, when the governor of Penza, Vassily
Bochkarev, made him an offer that would stun most British farmers.
He said that there were 400,000 acres of prime arable land lying
fallow in Penza and he needed people to farm it. Russian farmers,
he explained, had neither the capital nor the know-how to make the
land profitable.
Mr Hinchley began searching for a suitable plot and settled on the
area around Belinsky, about 70 miles (64km) from the city of
Penza.
He then contacted Robert Monk, a Nottingham-based entrepreneur
for whom he had worked as a contract farmer in the early 1990s.
“You’ve got to see this,” he said.
In no time Mr Monk was standing in the middle of a field near
Belinsky after a hair-raising ride on a 34-seater Yak-40 plane from
Moscow.
“I was gobsmacked,” said Mr Monk, whose main business is
property development.
“It’s just so huge. The tractors disappear over the horizon and don’t
come back for two hours. And this soil — you could bag it up and
sell it in a garden centre.”
The numbers made sense too: land prices were a fraction of those
in Britain and average wages for a tractor driver were just £1,200 a
year — a tenth of the British average.
And yet, with the right connections, crops could be sold on the local
market at international prices.
The problem was that Russian law forbade foreigners from owning
farmland. But
that was under review, so Mr Hinchley began negotiating with about
2,000 local farmers who had each been granted a small plot of land
when collective farms were dismantled.
In June 2003 Russia changed the law to let foreigners buy 49-year
leases on agricultural land. The British team was the first to make
use of it and in October that year, Heartland Farms was born.
Three years on the results are self-evident. Mr Hinchley has
cleared the weeds and trees from 8,100 hectares and is growing
crops on most of it. Last year the farm recorded the second-biggest
harvest in the region.
He has replaced the Soviet tractors he inherited with £2 millionworth of Western equipment, including a GPS tractor steering
system to ensure that seeds are planted in straight lines.
Mr Monk and his business partner, who have invested about £5
million so far, say they are on course to make a profit from 2009.
The 60 locals employed by Heartland are earning decent wages,
paid on time, for the first time in a decade.
Mr Bochkarev, the governor of Penza, is so pleased he is trying to
sell Heartland another 12,000 hectares.
He has been showing around delegations of Russian farmers and
investors, encouraging them to learn from their British counterparts.
In the past two years, a growing number of Russian investors have
been buying up farm land and importing Western machinery and
know-how.
Among them is Yelena Baturina, the billionaire wife of Yuri
Luzhkov, the Mayor of Moscow, who has bought up about 100,000
hectares of agricultural land in the western Belgorod region.
Farming in Russia has its drawbacks. The long, harsh winters limit
the yields. There is always the risk that the rouble will devalue
again or the Government will renationalise land. Heartland has also
stirred resentment among some locals who resent foreigners telling
them how to farm their land.
Vassily Nadeyev, the 44-year-old chief agronomist at Heartland,
said that Russian farmers could achieve similar results if local
banks would only lend them money.
“We can do something too,” he said. “People here are well-trained
and educated. Why does the Russian government torture us?” But
for the moment, Heartland is a rare success story. “They came
here, they invested their money and they have a strong belief in
what they are doing,” Mr Nadeyev said. “That shows real courage.”
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