Selling Russian-Grown Grain Back Home Is the Right Way to Push Agricultural Transformation
Since land in Russia is almost as cheap as cabbage, why have fewer than 20 Chinese companies engaged in cross-border farming there to date? During the interview, the reporter found the answer to this question. In fact, some experience can be replicated, but not every company can copy other kinds of experience.
Since land in Russia is almost as cheap as “cabbage,” why have fewer than 20 Chinese companies engaged in cross-border farming there to date?
During the interview, the reporter found the answer to this question. In fact, some experience can be replicated, but not every company can copy other kinds of experience. Because farming in Russia, for an ordinary company, requires not only an eye for spotting opportunities, but also enough patience and endurance.
During the interview, Lyu Wei, general manager of Fengtai Company, currently the Chinese company with the largest farming scale in Russia, told the reporter that farming is in fact still a fairly risky industry. Even in Russia, where mechanized, large-scale farming follows European and American standards, it still cannot escape the characteristics of primitive agriculture and remains at the stage of depending on the weather for a living.
“For example, in 2011, just as we were about to harvest, a swarm of locusts came and stripped the crops clean. In 2013, a major flood submerged all our land, and in that situation nothing could be grown. This went on for 6 years, with one kind of disaster or another.” Lyu Wei said.
Therefore, to farm in Russia, one must first have sufficient ability to withstand risk.
Actually, that is still secondary. According to Lyu Wei, despite the cheap land prices in Russia, there is an additional condition: after renting the land, you must persist in cultivating it every year, and you cannot let it lie waste or change its use.
According to Ning Mingxu, general manager of Beifeng Company, doing agriculture in Russia requires corporate operation. There are no farmers tilling the land, no individual households or family-farm-style cultivation, and farming enterprises must appear in the form of legal persons. Moreover, according to Russian standards, an enterprise's production progress and cultivation model are both subject to a state filing system.
Of course, since operations adopt a corporate model, product standards must be the strictest EU standards: the use of pesticides and chemical fertilizers is strictly limited. Under such harsh conditions, in China one hectare of land generally produces two and a half to three tonnes of soybeans, while in Russia it is only one to one and a half tonnes, far lower than domestic yields.
Lyu Wei said that although the company will shift its focus to farming in the future, it has no choice but to expand outside Amur Oblast, “because the governor of this oblast no longer allows Chinese people to farm there. That is because some Chinese people do not respect Russian regulations and use chemical fertilizers in cultivation.”
“As a private enterprise, to be honest, we are also surviving in a very difficult environment. Over so many years, we have encountered many natural and man-made disasters, and it has not been easy to pull through.”
But for an enterprise with lofty aspirations, these sacrifices are all worthwhile.
Today, Fengtai Company, where Lyu Wei works, focuses on products such as soybean oil and flour that are non-GMO, organic and pollution-free. At present, Fengtai Company has set up more than 100 outlets nationwide, and plans to reach two or three hundred in the future.
“Russian flour has no additives at all. Although it does not look as white as ours, it tastes very good. Importing good food can raise the quality of domestic food. At the same time, it can also give domestic grain-producing enterprises a push.” Lyu Wei said.
In fact, the real business opportunity Lyu Wei and Ning Mingxu see is food safety. “Right now it is the infant formula issue. Next, flour and soybean oil are very likely to be involved in this problem too.” Lyu Wei's words are sharp, but this kind of worry is in fact something everyone has.
Therefore, the real significance of “selling grain back home” is not only to fill domestic shortages. At a deeper level, it lies in introducing competition into the country, along with the most rational production model and the strictest standards. How I wish that one day our domestic farming enterprises could also confidently declare that our grain quality also meets EU standards.
“Selling grain back home” is forcing agricultural transformation, and the time is now.
During the interview, the reporter found the answer to this question. In fact, some experience can be replicated, but not every company can copy other kinds of experience. Because farming in Russia, for an ordinary company, requires not only an eye for spotting opportunities, but also enough patience and endurance.
During the interview, Lyu Wei, general manager of Fengtai Company, currently the Chinese company with the largest farming scale in Russia, told the reporter that farming is in fact still a fairly risky industry. Even in Russia, where mechanized, large-scale farming follows European and American standards, it still cannot escape the characteristics of primitive agriculture and remains at the stage of depending on the weather for a living.
“For example, in 2011, just as we were about to harvest, a swarm of locusts came and stripped the crops clean. In 2013, a major flood submerged all our land, and in that situation nothing could be grown. This went on for 6 years, with one kind of disaster or another.” Lyu Wei said.
Therefore, to farm in Russia, one must first have sufficient ability to withstand risk.
Actually, that is still secondary. According to Lyu Wei, despite the cheap land prices in Russia, there is an additional condition: after renting the land, you must persist in cultivating it every year, and you cannot let it lie waste or change its use.
According to Ning Mingxu, general manager of Beifeng Company, doing agriculture in Russia requires corporate operation. There are no farmers tilling the land, no individual households or family-farm-style cultivation, and farming enterprises must appear in the form of legal persons. Moreover, according to Russian standards, an enterprise's production progress and cultivation model are both subject to a state filing system.
Of course, since operations adopt a corporate model, product standards must be the strictest EU standards: the use of pesticides and chemical fertilizers is strictly limited. Under such harsh conditions, in China one hectare of land generally produces two and a half to three tonnes of soybeans, while in Russia it is only one to one and a half tonnes, far lower than domestic yields.
Lyu Wei said that although the company will shift its focus to farming in the future, it has no choice but to expand outside Amur Oblast, “because the governor of this oblast no longer allows Chinese people to farm there. That is because some Chinese people do not respect Russian regulations and use chemical fertilizers in cultivation.”
“As a private enterprise, to be honest, we are also surviving in a very difficult environment. Over so many years, we have encountered many natural and man-made disasters, and it has not been easy to pull through.”
But for an enterprise with lofty aspirations, these sacrifices are all worthwhile.
Today, Fengtai Company, where Lyu Wei works, focuses on products such as soybean oil and flour that are non-GMO, organic and pollution-free. At present, Fengtai Company has set up more than 100 outlets nationwide, and plans to reach two or three hundred in the future.
“Russian flour has no additives at all. Although it does not look as white as ours, it tastes very good. Importing good food can raise the quality of domestic food. At the same time, it can also give domestic grain-producing enterprises a push.” Lyu Wei said.
In fact, the real business opportunity Lyu Wei and Ning Mingxu see is food safety. “Right now it is the infant formula issue. Next, flour and soybean oil are very likely to be involved in this problem too.” Lyu Wei's words are sharp, but this kind of worry is in fact something everyone has.
Therefore, the real significance of “selling grain back home” is not only to fill domestic shortages. At a deeper level, it lies in introducing competition into the country, along with the most rational production model and the strictest standards. How I wish that one day our domestic farming enterprises could also confidently declare that our grain quality also meets EU standards.
“Selling grain back home” is forcing agricultural transformation, and the time is now.