Page 12 - bne magazine March 2017 issue

12 I Companies & Markets bne March 2017
Suspicious minds to keep Chinese farmers from milking Russia
Jason Corcoran in Moscow
Farmers and executives from China’s leading agricultural corporations were among foreign players who descend- ed on Moscow’s annual farming showcase AgroFarm on February 7-9 to showcase their produce and the latest agricul- tural technologies.
Russian Deputy Prime Minister Arkady Dvorkovich and Agriculture Minister Alexander Tkachev joined the throng at Pavilion No.75, which stretched over 16,500 square metres and featured cutting-edge solutions from more than 390 companies in 30 countries showcasing the latest technology and products for reproduction, feeding and maintenance of livestock and poultry health. The event attracted more than 10,000 visitors.
Among the foreign representatives at the three-day event there were 17 Chinese companies with stands, included Biogrowing Co, Kunlong International, Nanchang Howard Electric, Qing- dao Huabo International Trade, Shanghai Terrui International Trade and Zibo Yuejiang Machinery.
But, curiously, there was no mention at all at the conference of the ambitious mega-project to build the biggest dairy farm in the world in China to supply Russia with dairy products. Delegates at AgroFarm said the initiative announced in May 2015 to build an agriculture holding with 100,000 dairy cows in Mudanjiang City, in China’s Heilongjiang province wasn’t discussed at any of the many roundtables or presentations.
The massive dairy farm, which would border Russia’s Amur region, is planned to be 50 times bigger than the biggest dairy farm in the UK, with around 2,000 cows, and three times big- ger than the largest in the US, with 30,000 cows.
Industry players say the project has been shrouded in secrecy and now there are growing doubts about whether it will actu- ally go ahead. “There were plenty of Chinese amongst the for- eign guys at the Expo, but they there were traders particularly in tomato paste and frozen veg,” a leading player in Russian agriculture told bne IntelliNews. “As for people talking about building this massive farm in China – not a peep.”
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Industry sources say the mammoth project was supposed to be developed by the Kremlin’s sovereign wealth vehicle, the Russian Direct Investment Fund (RDIF), in conjunction with its partner the Russia-China Investment Fund. Yet a London- based spokeswoman for the RDIF said the fund had never intended to finance the project from its $2bn China fund. Yury Trofimov, a spokesman for the RCIF, did not respond to bne IntelliNews requests for comment.
Good neighbours
Russia has traditionally suffered from low farming output, which needs to improve significantly if it is to replace the food imports from Europe that have been restricted as a result of Russia’s 2014 counter-sanctions.
The signing ceremony for the dairy farm project in May 2015 was part of Chinese President Xi Jinping’s visit to Russia and the farm is supposed to be the centrepiece of a $2bn fund targeting investment in agricultural proj- ects in Russia and China. Under the agreement, the
two countries will consider creating an experimental agricultural free trade zone between the Heilongjiang province in China and the Amur Region in Russia.
“As for people talking about building this massive farm in China – not a peep”
Heilongjiang is China’s largest commodity grain pro- duction base and has a rich agricultural heritage. Offi- cials claim Heilongjiang is the leading province in terms of China and Russia’s economic and trade coop- eration, and is a “bridgehead” for improving the two countries’ strategic cooperation partnership.
Trade and cooperation between the superpowers is certainly growing as part of President Vladimir Putin’s much vaunted