Black Earth Farming/massive AgroInvest farming operation, Russia

Description
Russia changed the land laws in 2005 to allow private ownership of land, and foreign companies were quick to capitalize on the fertile 'black earth' region of Russia. One such company, Swedish-owned Black Earth Farming grows grains and oilseeds in the Voronezh, Lipetsk, Tambov, Samara, Kursk, and Ryazan Regions, over an area of 326,000 ha, of which it owns 256,000 ha. The companys largest shareholders are Vostok Nafta and another Swedish fund, Investment AB Kinnevik (24.8% and 24.9%, respectively). Alecta Pension Fund holds another 9.3%. In 2013 the company signed a three-year deal to supply PepsiCo beets for sugar and potatoes for chips (crisps), which is expected to boost revenues and increase land acquisitions, as well as demand an added capital of 35 million USD. The bureaucracy of land possession in Russia since privatization has created an environment which favors large corporations, creating difficulties for small landholders to obtain titles for their property. In 2005, Black Earth Farming, under its' subsidiary Agro-Invest, made agreements with local farmers to register their land under their name, and then purchased the land from the farmers according to a sale-purchase agreement. According to the company, the land was neither productive nor earning income due to difficulties obtaining official ownership, so those who sold to Agro-Invest were happy to do so and did so willingly. Black Earth is one of the world's largest public farming companies by cropped area and aims to increase their ownership to 400,000 ha.

Basic Data
NameBlack Earth Farming/massive AgroInvest farming operation, Russia
CountryRussian Federation
SiteVoronezh, Lipetsk, Tambov, Samara, Kursk, and Ryazan Regions
Accuracy of LocationMEDIUM regional level
Source of Conflict
Type of Conflict (1st level)Biomass and Land Conflicts (Forests, Agriculture and Livestock Management)
Type of Conflict (2nd level)Land acquisition conflicts
Specific CommoditiesCorn/Maize
Land
Wheat
Meat
Project Details and Actors
Project Details
,000 ha are expected to be harvested in 2013.
See more...
Project Area (in hectares)326000
Level of Investment (in USD)350,000,000
Type of PopulationRural
Start Date2005
Company Names or State EnterprisesBlack Earth Farming from Sweden
Agro-Invest from Russian Federation
The Conflict and the Mobilization
Intensity of Conflict (at highest level)LATENT (no visible organising at the moment)
When did the mobilization beginLATENT (no visible resistance)
Groups MobilizingFarmers
Forms of Mobilizationweapons of the weak, pilfering
Outcome
Project StatusIn operation
Pathways for conflict outcome / responseCompensation
Do you consider this as a success?No
Why? Explain briefly.The ramifications of concentrated ownership over such vast landholdings are unknown in this region. Protests are rare and usually in the form of low-key foot-dragging so the true popularity of the project is unclear.
Sources and Materials
References

Visser, Oane, and Natalya Mamonova, 2011, 'Large-scale land acquisitions in the former Soviet Union. A study of rural social movements and land conflicts'
[click to view]

Links

High Beam Business, 'Russia ready to intervene on grain market, but may not need to'
[click to view]

, 'First-ever profit sends Black Earth shares soaring'
[click to view]

, 'Black Earth reveals cash call to unlock Pepsi deal',
[click to view]

[click to view]

, 'Betting on the Russian Farm'
[click to view]

[click to view]

[click to view]

Dermy, Eleonore, 'Black Earth Stirs Investors in Russia'
[click to view]

Volya, 'High Treason?'
[click to view]

[click to view]

Black Earth Farming, 'Black Earth Farming Ltd Signs a Strategic 3 Year Cooperation Agreement with PepsiCo in Russia'

Other CommentsVisser & Mamonova, 2011: 'The … widespread form of protest, is hidden protest. Alexandr Nikulin considers gossiping, stealing, and foot-dragging as hidden forms of protest among peasants…

These days many companies have to accept this behavior and call these losses as the 'angel's share' (interview with Gustav Wetterling, Black

Earth Farming, October 2010). Consequently, these forms of protest do not represent a significant force to change the current situation. This behavior may only satisfy peasant needs for food or for vengeance.'

Other locations of the farms:

51.650407,39.200363 ; 52.598043,39.571152 ; 52.714251,41.435509 ; 53.233989,50.165863 ; 51.732132,36.184044 ; 54.597528,39.700241
Meta Information
ContributorAliza Tuttle
Last update24/06/2014
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