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Russian Agriculture Opportunity – News Update !!!
Currently, the topic of the magnetism of the Russian agriculture is very popular. What is the Russian agriculture? What problems does it face? How attractive is this industry for investors? We will talk about this today with Martin Leu, owner of Leu-AGRO Group Switzerland Project and Volga Baikal AGRO LLC., its Russian Subsidiary.
– Martin, how do you currently assess the state of the Agriculture Production and quality of land and what are the main problems that could be noted?
Russia owns most of the Chernozem Black Soil, mainly in the Central Region, the Volga Delta, and Western Siberia of the Russian Federation. Going outside of this area land can change, but still very much fertile land can be found with great potential for overall Grain Production.
In general, I think it is valid to say that most of these soil types even they vary to some extent, are generally considered to be high quality due to the high organic matter content and soil fraction content possessing a desirable level of silt and clay vs sand.
Agronomy practices are currently yield limiting; this includes poor cultivation policies. Among the negative external factors that affect agricultural areas and soil fertility, there is an impact of the wind and water erosion processes. With the result of the present field cultivation, we observe the losses of the upper fertile soil layer, which contents a high level of organic matters.
Less than optimum Makro Fertilizer rates and lack of corrective action coupled with rather low-end PH levels from 4.7 to 6.3 in value. Further, representative soil sampling work is required to accurately assess the potentially substantial requirements of the soil.
– What measures have you taken to improve the quality of the soil in the Project you have led? What actions are mandatory?
Soil analysis results viewed on many location and farms indicated there is an issue with low PH, special in the Western and European parts of Russia. Moving more to the East the PH level is becoming mostly neutral at 7.0 to 7.5 reading. This existence of low PH value in many parts of the Black Earth has a strong effect, and this issue is exceedingly difficult if not impossible to change. The development of better Soil Cultivation and Production management, coupled with proper application of available fertilizer can positively affect this issue.
One significant area of concern remains climate and in particular rainfall. The overall annual rainfall does not appear too concerning; however, what is concerning is the relatively low levels in the critical months: from the April to June period and more importantly the variability of that rainfall.
Risk management is a key element to this and one of the reasons why we are moving towards No-Till and Strip-Till Farming practices and therefore moisture conservation practices make most strategic sense. No-Till and Strip-Till Farming can have a great and positive effect on the future development of the Grain Farming Development in Russia including raising of present average yield outputs.
– What methods and measures, in your opinion, are the most helpful to increase the soil fertility? Which ones do you use and why?
Poor Primary cultivations policy and the use of outdated equipment leads to the existence of soil compaction at levels from 12 – 25 cm below the surface, this problem can be very much easy changed with the application of a proper Soil-Structure adjustment program.
A move away from simple Discing needs to be executed to be replaced with a multiple operation “all in one” primary cultivation policy – the move and implementation of No-Till Farming for small Grains and Strip-Till Farming for the Row-Cropping in the Crop rotation is in my view a MUST and Mandatory.
The implementation of other proper Soil Sampling practices to access the state of the land bank is available in todays High-Tech Farming practices and can be implemented in Russia at all levels. Following would be the application and proper placement of a mix of different fertilizer to adjust the Soil-Fertility levels.
– What does it mean for investors to invest in increasing the soil fertility? And how much does it cost to invest in improving the quality of the soil?
Investors with intention to enter and get involved in Grain Farming in Russia should work with people and management familiar with this issue outlined before, the opportunities are unlimited at the present time and with the Global demand for major grains, projected to increase by 70% in 2050.
With excellent and stable long-term performance, farmland enjoys a unique position as an investment. It is an asset class that produces competitive returns for its investors, with less volatility than common stocks and corporate bonds. But this all is only possible with proper Investment in Equipment and Inputs for a High-End Technical Program to achieve and improve soil quality and health for long term stable average grain yields. The detailed cost for such programs can not be outlined as a general program as the geographic location and the cropping plan for each project will return unique requirement and investment on its own.
I would like to add: if you are interested in the Opportunity Agriculture Russia – Grain Farming in the Back Earth Region, the Volga Delta, and the Siberian Region of the Russian Federation, please, get in contact with us.
With best regards,
Team of Leu-AGRO Group Switzerland & Volga Baikal AGRO LLC Russia
Contact Info:
www.volgabaikalagro.leuagro.com
