Russia to lease out far east to China

Russia is prepared to lease out another million hectares of agricultural land in the Far East in the hope of attracting investments and increasing the region’s income.

According to the South China Morning Post, such a suggestion was put forward by Valery Dubrovsky, investment director of the Far East Investment and Export Agency.

Dubrovsky said that the land will be open to foreign investors, and that Russia is counting primarily on demand from Chinese farmers, who may be interested in cultivating soybeans, wheat and potatoes.

A number of Chinese companies have already expressed interest, and may take roughly half of all the land on sale, and another 25% may go to investors from Japan and South Korea, Dubrovsky noted. He emphasized that all 3 million hectors suitable for the argo-industrial complex in the Far Eastern Federal District are now available to the farmers.

By offering significant amounts of cheap land, Russia is trying to strengthen its collaboration with China in this area, and there is interest on both sides, observed Jian Si, expert on Russia studies at the East China University in Shanghai.

In the context of its trade war with the US, China has placed tariffs on the import of American soybeans, and now requires land for its own production in order to compensate for the shortfall.

Chinese farmers already actively rent cultivated areas on lease agreements or through other temporary agreements, notes Dmitry Rylko, director of the Institute for Agricultural Market Studies. According to him, the best land is already being used by local farmers, and the new lands will most likely be located in the remote and low-production regions.

Despite the interest, there are a number of obstacles to the deal, Si adds: “In the Far East [of Russia] there is political opposition from the local residents – they are concerned by the mass influx of Chinese workers and working methods, as well as the use of too many pesticides and fertilizers.”

The decision to give foreigners, including Chinese investors, access to agricultural lands appears to have been made by Moscow, but how smoothly it is realized will depend on the stance of the local residents, Si believes.

  Russia, China, Far East