Last update:
2014-06-24

Black Earth Farming/massive AgroInvest farming operation, Russia

Description:

Russia changed the land laws in 2005 to allow private ownership of land, and foreign companies were quick to capitalize on the fertile 'black earth' region of Russia. One such company, Swedish-owned Black Earth Farming grows grains and oilseeds in the Voronezh, Lipetsk, Tambov, Samara, Kursk, and Ryazan Regions, over an area of 326,000 ha, of which it owns 256,000 ha. The companys largest shareholders are Vostok Nafta and another Swedish fund, Investment AB Kinnevik (24.8% and 24.9%, respectively). Alecta Pension Fund holds another 9.3%. In 2013 the company signed a three-year deal to supply PepsiCo beets for sugar and potatoes for chips (crisps), which is expected to boost revenues and increase land acquisitions, as well as demand an added capital of 35 million USD. The bureaucracy of land possession in Russia since privatization has created an environment which favors large corporations, creating difficulties for small landholders to obtain titles for their property. In 2005, Black Earth Farming, under its' subsidiary Agro-Invest, made agreements with local farmers to register their land under their name, and then purchased the land from the farmers according to a sale-purchase agreement. According to the company, the land was neither productive nor earning income due to difficulties obtaining official ownership, so those who sold to Agro-Invest were happy to do so and did so willingly. Black Earth is one of the world's largest public farming companies by cropped area and aims to increase their ownership to 400,000 ha.

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Basic Data
Name of conflict:Black Earth Farming/massive AgroInvest farming operation, Russia
Country:Russian Federation
Location of conflict:Voronezh, Lipetsk, Tambov, Samara, Kursk, and Ryazan Regions
Accuracy of locationMEDIUM (Regional level)
Source of Conflict
Type of conflict: 1st level:Biomass and Land Conflicts (Forests, Agriculture, Fisheries and Livestock Management)
Type of conflict: 2nd level :Land acquisition conflicts
Specific commodities:
Land
Meat
Corn/Maize
Wheat
Project Details and Actors
Project details:

,000 ha are expected to be harvested in 2013.

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Project area:326000
Level of Investment:350,000,000
Type of populationRural
Start of the conflict:2005
Company names or state enterprises:Black Earth Farming from Sweden
Agro-Invest from Russian Federation
Conflict and Mobilization
IntensityLATENT (no visible organising at the moment)
Reaction stageLATENT (no visible resistance)
Groups mobilizing:Farmers
Forms of mobilization:weapons of the weak, pilfering
Outcome
Project StatusIn operation
Conflict outcome / response:Compensation
Do you consider this an environmental justice success? Was environmental justice served?:No
Briefly explain:The ramifications of concentrated ownership over such vast landholdings are unknown in this region. Protests are rare and usually in the form of low-key foot-dragging so the true popularity of the project is unclear.
Sources and Materials
References to published books, academic articles, movies or published documentaries

Visser, Oane, and Natalya Mamonova, 2011, 'Large-scale land acquisitions in the former Soviet Union. A study of rural social movements and land conflicts'
[click to view]

Links to general newspaper articles, blogs or other websites

High Beam Business, 'Russia ready to intervene on grain market, but may not need to'
[click to view]

, 'First-ever profit sends Black Earth shares soaring'
[click to view]

, 'Black Earth reveals cash call to unlock Pepsi deal',
[click to view]

[click to view]

, 'Betting on the Russian Farm'
[click to view]

[click to view]

[click to view]

Dermy, Eleonore, 'Black Earth Stirs Investors in Russia'
[click to view]

Volya, 'High Treason?'
[click to view]

[click to view]

Black Earth Farming, 'Black Earth Farming Ltd Signs a Strategic 3 Year Cooperation Agreement with PepsiCo in Russia'

Other comments:Visser & Mamonova, 2011: 'The … widespread form of protest, is hidden protest. Alexandr Nikulin considers gossiping, stealing, and foot-dragging as hidden forms of protest among peasants…
These days many companies have to accept this behavior and call these losses as the 'angel's share' (interview with Gustav Wetterling, Black
Earth Farming, October 2010). Consequently, these forms of protest do not represent a significant force to change the current situation. This behavior may only satisfy peasant needs for food or for vengeance.'
Other locations of the farms:
51.650407,39.200363 ; 52.598043,39.571152 ; 52.714251,41.435509 ; 53.233989,50.165863 ; 51.732132,36.184044 ; 54.597528,39.700241
Meta information
Contributor:Aliza Tuttle
Last update24/06/2014
Comments
Legal notice / Aviso legal
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