Russia offers to lease land in the Far East to APEC countries
Russia & India Report | 30 January 2012
Russia is willing to discuss leasing farm land in the Far East to Asia-Pacific Economic Cooperation member countries. The Ministry for Economic Development has stated that a group of 20 projects is intended to bring in tens of billions of dollars in investments.
Andrei Slepnev, the deputy minister for economic development, remarked last week that Russia will offer roughly 20 investment projects to several APEC member countries – Vietnam, Singapore, Thailand and Japan – for developing agriculture in the Far East. “We have given a number of ready-made investment projects that the regions developed and brought to the table. We are offering to organise the processing of agricultural products and their export to fellow APEC member countries, doing it all in Russia,” Slepnev explained.
Russia’s Asian partners are being offered the vast spaces of land in the country’s far east to develop projects, with some of these projects requiring up to 150–200 thousand hectares. Slepnev estimates that the investment volume for these projects will number into the billions of dollars. “Taking into account the amount of money projected for investment, this should be for the long term. We aren’t talking five years here,” Slepnev said. He added that the law allows for long-term leases in Russia.
The Primorsky, Khabarovsk and Amur Regions are among the possible regions that are being discussed at the moment. These places have the right conditions for producing soy, rice and other types of grain.
Slepnev said, “We have the freed-up land and available opportunities that are not being used at the moment, because the areas being talked about have small populations. These are resources that in terms of their value are comparable with several hydrocarbon deposits. They need to be exploited so that we can make money off of them for creating a platform for other projects.”
Yevgeny Kanayaev, a leading researcher at the Centre for Asia-Pacific Research at the Institute of World Economy and International Relations says that up to 50 per cent of arable land in the Far East and Eastern Siberia are not being used, while experts believe that climate change will bolster harvests for chief crops by 11 to 14 per cent in the coming 30 to 50 years.
Slepnev said that the Ministry for Economic Development and Ministry of Agriculture, along with the regions, started developing the investment projects in mid-2011 for the APEC Summit. He also pointed out that Vietnam, Singapore, Thailand and Japan have so far expressed only theoretical interest, with Singapore, which “would like to take part in this,” having requested further information.
An inside source says that leasing agricultural land in the Far East has been going on as part of smaller investment projects headed up by Chinese agricultural and industrial companies, including vegetable production by Chinese farmers in the Jewish Autonomous Region.
The population is growing in countries in the Asia-Pacific Region, but the opportunities to increase land for agricultural use and the water resources needed to support them are limited: the amount of arable land is falling, while over the past decade, the wheat harvest has grown by just 1 per cent, and the corn harvest by just 2 per cent. Thanks to increasing incomes, people have begun to consume more meat and more fodder has become in demand for livestock production. Meanwhile, the growth in the car industry requires more agricultural products for producing biofuels, especially with oil prices being high, Kanayev explained.
Food safety will be one of the priority topics at the APEC Summit in September in Vladivostok. Slepnev has said that Russia, as the host of the event, plans on discussing the regulation of food markets, measures for cutting down on speculation, and providing mutual humanitarian aid. “Russia will bring initiatives to the table on the opportunity for giving foreign investors access to agricultural production. In turn, we will be willing to provide the opportunities for investor countries in the region to invest in Russia’s agricultural and industrial complex in the Far East and Pacific Regions,” Slepnev noted. He also said that unlike some countries, Russia’s farm land is not considered to be strategic entities and does not put restrictions on investing in its agricultural and industrial complex.
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