Pigs and Protection Money: German Farmers Seek their Fortunes in Russia
In the 18th century, Catherine the Great invited German farmers to come to Russia and cultivate the land. Over two centuries later, the country is recruiting Teutonic pioneers once again in a bid to put vast tracts of fallow land to use. The land holds great opportunities for agricultural entrepreneurs -- provided they have strong nerves.
The roads are a problem. The dark, frost-damaged asphalt is patched in many places. As the black Toyota Camry bumps along the road, Alexander, the driver, glances quickly into the rear-view mirror and steps on the gas, passing trucks that look like they haven't seen the inside of a repair shop in a long time.
Sitting in the back seat, Stefan Dürr is being thrown back and forth on the bumpy road. As he looks out the window, he sees trees and low shrubs flying by. Beyond them is a vast, shimmering Russian landscape, a region of dark fields and kilometer upon kilometer of black earth -- the Voronezh Oblast. The German points to the signs along the side of the road. On one sign, the words EkoNiva Agro are painted in black on a white background. "It all belongs to us," he says cheerfully.
When Dürr, 47, a former activist with the Bavarian Young Farmers Association, studied agriculture in the northern Bavarian town of Bayreuth, he anticipated leading a comfortable life on his grandfather's farm in the Odenwald region near Heidelberg. Instead, he is now the owner of more than 170,000 hectares (about 420,000 acres) of prime Russian farmland.
With his curly hair, and in his blue wool sweater and gray jeans, Dürr could be mistaken for a tractor driver. But he has achieved breathtaking results as a businessman. He now speaks Russian with almost no accent, and is cultivating fields in the Kursk, Voronezh, Orenburg, Novosibirsk and Kaluga regions. Through his holding company, EkoSem-Agrar, he employs 2,800 people in farming, owns a herd of 28,000 cattle and most recently generated revenues of 80 million ($102 million). In good years, he earned 200 million selling agricultural machinery, a business he has since spun off. According to Dürr, EkoNiva, one of his subsidiaries, is among the top 30 agricultural companies in Russia.
Plans to Expand
Dürr's success story, and his pioneering achievements as a Western European deep in the heart of Eastern Europe, serve as a model for the Russian government. Almost 250 years after Empress Catherine the Great attracted tens of thousands of German settlers to her realm, Russia is once again courting Western settlers to revive a farming industry that is ailing in some areas.
Dürr has, in fact, attracted imitators. The Westphalian meat baron Clemens Tönnies has just announced a plan to invest millions in Dürr's neighborhood. Together with a Russian partner, Tönnies wants to build 10 new pig farms, which are expected to produce 62,500 tons of meat a year. It is one of the largest projects ever planned in Russia, and it promises an investment of more than 100 million in the Voronezh region.
Eckart Hohmann, a former banker with the German state-owned bank WestLB, is already there. He and a business partner from the northeastern German region of Mecklenburg are farming an area of 29,000 hectares 400 kilometers (250 miles) south of Moscow. His "Rheinland Farm" produces brewers' yeast, seed grain and wheat. "The Russians practically forced the land on us," says Hohmann, adding that the business already achieved profitability some time ago. Not far from his farm, three farmers from Ingolstadt, in Bavaria, are cultivating a total of 4,000 hectares -- and they plan to expand.
Some 23 million hectares of fertile farmland is currently not being used in Russia. Much of this land is in the coveted Black Earth Region. In the early 1990s, after the fall of the Soviet Union, collectives everywhere went bankrupt, and the country was forced to import grain. The Kremlin has since made agriculture a top priority, and it is openly recruiting Western expertise.
Its efforts have been successful. When Bavarian Agriculture Minister Helmut Brunner returned from a tour of Dürr's vast farms, he was so enthusiastic that he practically called upon Bavarian farmers to leave the country. "The Russians have made it clear that they want more Bavarian farmers," Brunner said.
On Landtreff.de, an Internet former for farmers, a thread titled "Let's go east" was filled with glowing comments. "Let's go, lads," one farmer wrote enthusiastically. "The thawing permafrost soil is waiting for us beyond the Ural Mountains. Get over there and farm as far as the horizon!"
Falling in Love with Russia
Dürr's liaison with the east began a long time before online communication became commonplace. He became a pioneer at a May Day festival in 1989 in the Bavarian town of Weidenberg. He was drinking a beer when an official with the German Farmers Association approached him. Then-Russian President Mikhail Gorbachev and then-German Chancellor Helmut Kohl had just signed a student exchange agreement, and officials in Bonn, Germany's capital at the time, were desperately looking for volunteers. Dürr, who was then 25, saw himself facing the choice between his grandfather's farm in the Odenwald and an adventure in the Soviet Union.
A short time later, he was standing in a collective farm near Moscow, between 110,000 pigs and seemingly endless fields, an intern from the West who had arrived in the middle of perestroika. He advised the head of the ailing operation to grow rapeseed instead of just wheat. "Khorosho (OK)," said the boss, "but only on 50 hectares to start."
Dürr still looks wide-eyed with astonishment today when he tells the story. "Fifty hectares!" He was familiar with the 14 hectares of the family farm, but the collective farm consisted of 5,000 hectares.
The German enjoyed the student parties in decadent, sophisticated Moscow, and after three months, he started speaking Russian. He still raves about the beginnings of that "crazy period." The Russian virus had infected him.
Dürr stayed for six months. At the end, he explained to the Russian agricultural administration how East German collective farms were being privatized. On behalf of the German Agriculture Ministry, he brought Russians to the eastern states of Brandenburg and Thuringia, drank vodka with them and learned the best Russian toasts. His tours were praised as part of a "German-Russian dialogue on agricultural policy," and his salary was paid by the Agriculture Ministry.
As a government consultant of sorts, Dürr soon brought his expertise to the Land Reform Task Force of the Russian parliament, the Duma. His recommendations differed markedly from those of the market radicals. He was strongly opposed to disorderly privatization and feared land speculators, and he was worried that agriculture would also fall into the hands of the oligarchs.
A Toast to Russian Agriculture
Dürr, the German counterweight to Russian oligarchs, is sitting in the village pub in Shchuchye, 600 kilometers south of Moscow. He married a Russian woman in 1994, and three of his children were born in Russia. The street is still called Sovetskaya, but the pub is now his. He farms the 63,000 hectares outside, has 13,500 cattle in nearby pastures and sponsors the local kindergarten.
The bar is full. Almost 100 of Dürr's business partners have come to the village to tour his new stables and a production building for agricultural machines. The district administrator utters a few words of praise. The German gives a short speech in Russian. Bottles of Pyat Ozer, a Siberian brand of vodka, are on the tables. It is noon. Dürr delivers his toast to the health of Russian agriculture as if he were firing a volley from a machine gun. The audience roars: "Urra! Urra! Urra!"
Dürr acquired his first collective farm, named "The Quiet Don," in the region in 2002. Until then, he had earned his money by selling seed and exporting East German agricultural machines. He bought old forage harvesters from an East German enterprise called "Progress" for 1,000 deutsche marks, fixed them up and sold them in Russia for 13,000. He eventually earned enough money with the venture to buy 11 former collective farms in the Voronezh region alone. It's ideal farmland -- thick black earth with an extremely thick layer of humus soil, well mixed by hamsters, gophers and worms. Today, Dürr cultivates almost half of the agricultural land in the district. He has just turned in a record harvest: 117,000 tons of sugar beets, 51,000 tons of corn, 180,000 liters of milk per day -- an increase of 70 percent.
Has the German transplant turned from being the savior of collective farms into an oligarch? Dürr begs to differ. "I don't speculate with the land," he says. "I grow crops, live from agriculture and create jobs." He sees himself as an idealist who got to know the other side of the Russian soul long ago, and who knows why, two decades after perestroika, more fields than ever now lie fallow. According to Dürr, one of the reasons is that many collective farmers traded their ownership shares for crates of vodka.
- Part 1: German Farmers Seek their Fortunes in Russia
- Part 2: Solving Problems Outside the Legal System
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