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UK, 27th Sept 2013, by Agrimoney.com ‘Dishonesty’ mars Russia’s development in farming Russia’s development into a bigger agricultural power is being undermined by dishonesty among staff, and a lack of willingness to own up to errors, a leading farm advisor warned. Brian Redrup, who heads up agricultural advice for Velcourt in Eastern Europe, Africa and South America, acknowledged the challenge to farming in Russia from weather extremes, and a history of periodic droughts. “Farming in Russia will be volatile due to climate,” said Mr Redrup. However, some farm business “are investing in irrigation to reduce the climatic effect”. Irrico, the agricultural investor backed by VTB, and Stokholm-listed Trigon Agri are among groups which have highlighted the importance to Russian farm operators of access to irrigation. ‘No accountability’ Mr Redrup said that the “significant factor” holding back the development of Russian agriculture “is honest, accountable farm management”. “If the climate is one major challenge, the other is competent management,” he said. “On a typical Russian unit, there will be a general director, chief agronomist and chief engineer. They will all blame one another if things go wrong, with no accountability.” He termed dishonesty as “another major issue”, which was “endemic from tractor drivers through to the senior management. “At tractor driver level, the stealing of diesel, fertiliser and chemicals can be a problem. At a higher level, the security of grain is questionable.” Russia vs Romania Mr Redrup is one of the most experienced consultants at Velcourt, which manages some 50,000 hectares of land in its home UK market alone, 35 years ago, the last 10 of which he has represented the group in Russia. “A UK farmer visiting [Russia] for the first time in late spring would be confident that they could achieve 10 tonnes per hectare across the board,” he said. “Unfortunately, it’s not that easy.” Velcourt in March set up a joint venture, with Mintridge, for investing in Eastern Europe farmland, but settled on Romania, within the European Union, as its target market. Romania offered “a compelling case for the three central factors that makes land an attractive asset class – scope for land value growth, the ability to acquire freehold land, and the soil quality for farming the land”, Velcourt said at the time Farm scams Some other agricultural figures have also flagged scams in Russia, and other countries, with inspection groups such as seeing the detection of scams as part of their services. Societe Generale de Surveillance, for instance, last year warned the International Grains Council’s annual conference that “fraud and corruption” in the former Soviet Union were issues “to be addressed”. “It still exists,” Mr Shulga, a Ukrainian said, pointing to examples where his company, which undertakes services from soil testing to inventory inspection, had discovered attempts to exaggerate grain inventories by piling them on top of bales, or on to a false floor near the top of a silos. People pretend their silo is full, and ask an inspection company to certify 20,000 tonnes,” certification which can be used as security against bank loans. “Proper checks find only 10 tonnes stored.” However, another farm manager with Russian experience said that while the country did have “issues”, these could be found in many other nations, including those in the West, and underlined the need to offer attractive employment packages to lure high quality staff. Continue reading →