Page 93 - RUSRptSept18

source: Brand Finance
10 Pyaterochka 91.2 1.3 27
9.1.6 Agriculture sector news
Russia is in the process of leasing another 1mn ha of agricultural land in the Far East regions to China , the South China Morning Post reported on August 15 citing Valery Dubrovskiy, the head of investment for the Far East Investment and Export Agency. “We expect most of the investment to come from China,” Dubrovskiy said. “We expect 50% [of investors to come] from China, 25% from Russia and 25% from other countries, like Japan and Korea.” The announcement means that 3mn ha of arable land in the Far Eastern Federal District is now available to farmers. The land is suitable for dairy farming or the growing of crops, such as soybeans, wheat and potatoes. Analysts surveyed by SCMP question the quality of the proposed land plots and note than most of the fertile land in the Far East region has already been taken by domestic farmers. Nevertheless, facing a crisis over soybean tariffs in a trade war with US, Chinese farmers could still be attracted by the offer, as the Far East is Russia’s main soybean growing region. However, other experts remind of local political resistance to Chinese companies in the region, with concerns over large influx of Chinese worker and pesticide-rich farming methods.
Russia will e-auction 50% of the crab fishing quotas for 2018-2019 to create conditions for the entry of new players into the sector, Vedomosti daily said on August 24 citing an official government decree. The world famous Kamchatka red crab is Russia’s “other caviar” and fetches high prices in export as well as being highly valued by the Russians themselves as a favourite delicacy. Russian fishing business has been attracting investors’ attention as fishing is one of the fastest growing Russian agricultural segments and several heavyweight Russian tycoons have been investing into the industry. Salmon and trout producer Russian Aquaculture is the largest player in the Russian fish business with a 22% market share and is growing fast. The partners of Russian oligarch Roman Abramovich acquired 25% in South Sakhalin fishing company Poronay , while Agama RT bought 49.99% in Russian Cod , controlled by a subsidiary of Russian Industrial Fish Company (RRPK) of Gleb Frank, the son-in-law of stoligarch and Kremlin insider Gennady Timchenko. Reportedly it was Gleb Frank's RRPK which suggested to Vladimir Putin to redistribute crab quotas through auctions in autumn 2017, unnamed market participants told Vedomosti. RRPK has entered the market recently and spent a record-high RUB10bn on crab fishing quotas in May 2017. The government could raise additional RUB80bn-200bn from auctioning the quotas the state fishing agency Rosribolovstvo estimated, according to Tass. In the meantime old market participants are protesting the decision, arguing that established companies have spend $2bn on quotas in 2001-2017 and withdrawing the quotas would lead to disruption of operations and investment among small regional players. Reportedly the temporary governor of one the main crab fishing regions Primorsky in July 2018 tried to discourage Putin from auctioning the quotas, warning that the "[fishing] villages don't have the money to go buy [quotas] at the auctions".
93 RUSSIA Country Report September 2018 www.intellinews.com