Megafarms linked to Russia’s political elite boom, fuelling fears for smallholders

LONDON: Russian megafarms with ties to the political elite have taken control of vast swathes of land to fill gaps left on supermarket shelves by bans on western imports, according to business consultants and charities fearing small farmers are losing out.

Russia’s five largest landowners together now control an area the size of Belgium after expanding rapidly to increase domestic production of foods on banned imports lists, including beef and chicken, according to Moscowbased consultants BEFL.

Russia’s agriculture sector has boomed since 2015 when President Vladimir Putin banned many imports from the 28-nation European Unionand other states in retaliation against sanctions imposed against Russia after the Ukraine crisis of 2014.

But many smallholder farmers have been cut out as agribusiness giants have grown to dominate entire regions, said corruption watchdog Transparency International.

Ilya Shumanov, deputy director at Transparency International, said local governments in some of the most productive growing regions have forced small farmers to turn land over to corporations with such moves as hiking tax rates.

He said three of the five biggest landowners named in the BEFL report have links to high profile political figures.

These include Agriculture Minister Alexander Tkachev, whose family controls Agrocomplex Tkachev, which has acquired more than 180,000 hectares of land in the past year to become the country’s fourth largest landowner, said BEFL.

“( These agribusinesses) are trying to buy lots of land and, for the most part, are linked with politically exposed persons,” Shumanov told the Thomson Reuters Foundation.

“I think it’s very easy to use government connections to put some pressure on a small and mediumsized business to motivate them to sell to these big companies.”

Tkachev was appointed agriculture minister in April 2015, saying he saw no conflict of interest between his government post and his family’s ownership of Agrocomplex, according to an interview with Russian daily financial daily RBC.

Prior to that he headed the state-run Viselkovsky Interfarm Combined Feed Plant but, after the Soviet Union collapse in 1990, he led its privatisation to create Agrocomplex in 1993, according to his biography on the Russian government website.

The company, Firma Agrokompleks Im.N.I.Tkacheva AO – which includes the name of Tkachev’s father Nikolai Ivanovich – now controls 640,000 hectares of land, triple its 2014 holding. — Reuters