A property developer from Nottingham has bought 35,000 acres of arable land in Russia in what is thought to be the first deal of its kind.
The governor of Penza, a region 400 miles south-east of Moscow, has given permission for Robert Monk to use the Russian subsidiary of his company, Heartland Farms, to acquire the freehold on the land at around £49 ($100) an acre. Until now, foreign firms have only been able to farm land on 49-year leases but Monk has exploited a loophole that allows foreign investors to wholly own Russian companies, which can then acquire land directly. Monk said: “It's one of the few places in the world where there are vast areas of land up for sale. I think there's 500,000 acres of land that's derelict in Penza alone. I want to get the farm up to 100,000 acres, which I think is as big as you can manage.”
Monk, who also runs property firm Monks Estates, said he had invested £6m so far and it was already paying dividends. “No one is making the money we are making in Europe. And we don't get any subsidies,” he said. “The crops are growing well and we started the harvest yesterday. We had eight combine harvesters lined up in a row going across the fields.” The farm, whose largest single field covers 3,000 acres - ten times the size of an average English farm - is expected to yield around 80,000 tons of wheat, malting barley, sugar beet and potatoes this year from the 20,000 acres so far cultivated.
Monk said the recent increase in world grain prices would also help. “Where we were getting $110 a tonne we are now getting $250 a tonne,” he said. It should enable Heartland Farms to turn its first operating profit this year, which it expects to double to around £1 million next year.
Russia has made agriculture, which collapsed after the fall of the Soviet Union, one of four priority areas for development, offering tax breaks to those willing to invest in its fields. Monk became involved in Russia after meeting former Nottinghamshire contract farmer Colin Hinchley, who had originally been exploring the idea of farming in Eastern Europe. Hinchley and Richard Willows, a former grain trader from Lincolnshire, are now both directors of Heartland's Russian subsidiary and live in Penza. Monk said land prices were already rising. He leased his first 30,000 acres in 2002 at £20 ($40) an acre from 1,500 local residents. (telegraph.co.uk)