Agro-business in Russia is growing at a breath-taking pace
A hotly debated issue today is the global food crisis. There is an acute shortage of certain basic foodstuffs in some parts of the world such as potatoes, wheat and rice. At the same time, food prices are sky-rocketing beyond the reach of an ever-increasing number of consumers.
Globally, certain foodstuffs have turned into lucrative investment opportunities for brokers and speculators. Food production in Russia and Ukraine, for example, is of great significance to the world’s wheat reserves.
Financing sustainable concepts in the agricultural sector plays an important part in the Nordic Environment Finance Corporation’s (NEFCO) activities. Since the early 1990’s, we have funded projects designed to promote sustainable manure processing on pig and dairy farms. We are also financing research and development in order to explore whether poultry farm manure can be converted into biocoal – one way of turning waste into energy while reducing eutrophicating emissions to watercourses.
The most recent addition to our agricultural loan portfolio is a project, which relates to the Finnish company Myllyn Paras’ investment in cultivation of grain in the Kursk region in Russia. NEFCO has provided capital for the grain cultivation project based on the ‘no-till farming concept’ which reduces erosion as well as the flow of nutrients into the surrounding waterways.
The agro-business sector in Russia is growing at a breath-taking pace. Last year, the exports of wheat accounted for almost 10 per cent of global consumption. According to a report released by the consulting firm Pareto Öhman, Russia, Ukraine and Poland are the only European countries that have been able to increase their wheat production over the past few years.
The fertile land and traditional bread-baskets of southern Russia represent an attractive investment opportunity to many companies engaged in this line of business. Myllyn Paras is in good company. For example, Alpcot Agro, an international investor, has acquired around 155.000 hectares of farmland in Russia and Ukraine for the production, breeding and export of agricultural products for the global market. It remains to be seen who else will follow their example.
Image: Wikimedia Commons
Relevant sites: www.nefco.org