Russia to Lease its Unused Farmland to Asian States

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Mar. 20 – Russia may officially welcome Asian nations to lease its abandoned Far Eastern farmland at the APEC summit in Vladivostok this upcoming September.

“Since last year, we’ve been preparing a strategy to develop Russia’s Far East and east-west Siberia to announce at the APEC summit. We have 20 agricultural investment items to offer to Asia-Pacific countries,” Deputy Economic Development Minister Andrei Klepach told reporters. Some of these projects include up to 150,000–200,000 hectares.

For now, an area for lease includes the Primorsky Krai, Amur and Khabarovsk regions of the Russian Far East, where only half of the farmland is cultivated since the collapse of the Soviet Union.

According to Klepach, leasing will be made for at least five years with no legal obstacles standing in the way.

If the cabinet approves the Economic Development Ministry’s plan, Russia’s president will officially declare it at the APEC summit.

Andrei Slepnev, another deputy minister of the Economic Development Ministry, remarked that Russia will offer investment projects to several APEC member countries, including Vietnam, Singapore, Thailand and Japan, for developing the agriculture industry in the Far East.

Meanwhile, farmers from both Korea and China seem to not be in need of Russian cabinet offers, as they started renting land in Russia’s Far East a few years ago after making deals with local authorities.

Koreans and Chinese in the Far East
The South Korean government started a program to support overseas agricultural development projects in 2009, and has since used up to 10 percent of its budget for agricultural production for overseas projects. At present, Seoul is supporting 25 projects in eight countries, including five in Russia, Asahi Shimbun reports.

In a suburb of Ussuriysk in Primorsky Krai, a farm that has 10 new cylinder-shaped silos has introduced an advanced South Korean-made automated system for storing and managing soybeans and other agricultural products. The farm is operated by a South Korean corporation setup in 2008.

“South Korea does not have land but has the funds and technologies. We and Russia can develop together,” the corporation’s head said.

Borrowing 7,000 hectares of land from a local government, the company is harvesting about 5,300 tons of soybeans, oats and other farm products.

According to the South Korean consulate general in Vladivostok, 11 South Korean companies, including Hyundai Heavy Industries, are working about 70,000 hectares of farmland in Primorsky Krai. In addition, several other South Korean firms, including one that belongs to Lotte Group, plan to follow suit.

Last September, new North Korean leader Kim Jong-un also expressed interest in leasing Russian farmland. Pyongyang said it will lease several hundred thousand hectares of land in the Amur region, which has about 200,000 hectares of idle land in regional, municipal or private ownership.

North Korean state media said the country’s chronic food problems have been exacerbated by heavy rains in June and July. A tropical storm washed away or inundated 60,000 hectares of land in farm regions.

This February, the North Koreans and officials from Russia’s Amur Region concluded an agreement to set up a joint investment group. According to the regional authorities, North Korean farmers will cultivate soybeans and potatoes on 1,000 hectares of farmland starting from 2013.

Chinese agricultural magazine Nongjing says companies from China’s Heilongjiang Province were operating about 347,000 hectares of farmland in Russia as of the end of 2009. That marked an increase of 23.8 percent from a year ago.

There are more than 300 farms run jointly by Chinese and Russians in the Amur Region, according to the study “Cooperation and Conflict among Provinces: The Three Northeastern Provinces of China, the Russian Far East, and Sinuiju, North Korea” of Yonsei University. On such farms, Chinese laborers work and live there with their families.

Pros and cons
The land leasing plan raised different responses within Russia. Supporters call it a creative plan that will boost the development of the stagnant Russian Far East.

“The plan serves as an advantage for both sides as the Far East region that has been suffering from severe labor shortages can use surplus labor from the Asia Pacific region,” researcher at the Far East branch of the Russian Academy of Sciences said to the local press.

“In the past 20 years, the amount of (Russian) central government’s investment in agriculture was small. The government has changed its stance to one that develops agriculture in the Far East by inviting foreign capital,” Anatoly Chaika, chairman of the Far Eastern Scientific Center of the Russian Academy of Agricultural Sciences said.

Opponents, however, say that the region could be dominated by foreign immigrants while environmental pollution can be rampant.

“If we do not take any specific measures for the development of the Far Eastern region, the residents will speak in Chinese, Japanese, or Korean within a few decades,” Putin said last year.

In northeastern China, more than 100 million people are living in the three provinces of Heilongjiang, Jilin and Liaoning. By comparison, only 6.3 million people are residing in the neighboring Far Eastern Federal District of Russia, which is seven times larger than the territory of the three Chinese provinces.

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