John Miller of The Wall Street Journal in Bilyi Kamin
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THE vast collective farms that fed the Soviet Union are now a patchwork of tiny gardens, fields and vacant lots. But, combined, they could help to feed the world: Russia, Kazakhstan and Ukraine have substantial amounts of fertile yet untilled land.
If someone could just stitch the land back together and create modern farms, agronomists say, the vast spaces north and east of the Black Sea could generate an extra 115m metric tons of wheat a year — 20% of the world’s present production.
Richard Spinks is trying to do just that. The 41-year-old Briton has been going door-to-door, leasing small plots of land from thousands of poor farmers in western Ukraine. His company, Landkom International, has planted wheat, barley and rapeseed on a combined 10,000 hectares. Landkom expects to reap its first big harvest this autumn.
Such efforts could give a much-needed boost to global food supplies. For decades, agribusiness companies relied on new seed and fertiliser varieties to push yields higher. But as technology gains have slowed, the search for additional arable land has intensified. That has created an opening for entrepreneurs with visions of recollectivising the land in former communist countries and reviving production.
The approach is also being tried in China, where much of the farmland is divided into small plots controlled by village collectives. A handful of farmers are trying to form larger and more efficient farms by cobbling together pieces of land rented from absent neighbours.
In Ukraine, Spinks faces long odds. Property laws bar private land sales, so companies must sign leases with individual landowners who often pull out before the contract expires. Spinks said that, to keep his lessors happy, he invests heavily in local infrastructure and has built roads, schools and orphanages. Over Easter, television commercials wished viewers a happy holiday from Landkom.
Bilyi Kamin was once among the brightest stars in the Soviet agricultural constellation. Some 500 miles west of Kiev, the village regularly fetched accolades from Moscow for its crop yields. The land here, as in most of Ukraine, is rich in humus, organic matter that makes soil more fertile. Soviet planners depended on Ukraine for 40% of their agricultural output.
After the break-up of the Soviet Union in 1991, governments chopped up the old state farms and distributed plots to their citizens. Lacking capital to invest in the land, the new owners mostly planted small vegetable plots or let their animals graze. Many title deeds were not claimed because their owners had died or emigrated. In all, some 22m hectares of arable land in Russia, Kazakhstan and Ukraine went uncultivated. The region, although still a big grain producer, has continued to suffer from a lack of capital investment ever since.
Despite the election of a pro-Western government in Ukraine in 2004, an influential business and political elite that takes its cues from Moscow remains suspicious of Western investment. In turn, foreign investors find themselves coping with a venal political system and courts that are deeply corrupt. According to a “corruption perception index” compiled by Transparency International, a Berlin-based watchdog, international business executives consider Ukraine among the most corrupt countries in the world, worse than Uganda, Moldova and Cuba.
Critics of the land-leasing model say that when a local farmer breaks a contract, there is little legal recourse. Sphere Asset Management, a Kiev-based hedge fund, recently started selling off the leases it holds to 29,600 hectares there. “We are regularly in litigation with landowners,” said Yevgeniy Khata, Sphere’s managing director.
The central government in Kiev is now considering a law to legalise land sales. That could trigger a land rush and quickly push up prices. Landkom’s 15-year leases include a clause that would give it first crack at purchasing land. But whether that would work in practice is unclear.
A native of Kent, Spinks said he joined the Royal Air Force when he was 16 and was sent to the Falkland Islands after Britain’s war with Argentina ended in 1982.
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