Do farmers stay in Russia?

Recently, The Dairy News compiled a list of foreign companies that are leaving RUSSIA due to a special operation in Ukraine. Among them are many consumer market enterprises, food manufacturers, as well as industrial enterprises. However, the list of outgoing companies does not include agricultural producers. The Dairy News recalled which companies with foreign capital operate in Russia and asked experts why representatives of the agro-industrial complex do not make harsh statements. Suspended the development of business in Russia, companies that supply their products to agricultural producers, for example, the grain trader Cargill, as well as the manufacturer of agricultural machinery Deere.

At the same time, agricultural producers are not seen leaving Russia, largely due to the fact that there are not so many examples of foreign capital in the agro-industrial complex. Most of the large agricultural holdings are owned by Russian business. For example, according to SPARK, the owners of the Agrocomplex im. Tkachev" - Lyubov Yamshchikova and Natalia Pushkar. Last year, the VTimes publication wrote with reference to the statements of the main company of the holding, Agrocomplex im. N. I. Tkachev” that its beneficiary is the former Minister of Agriculture Alexander Tkachev.

The Cherkizovo group was once founded by Igor Babaev. Now, according to SPARK, the holding is managed and controlled by its children - Evgeny and Sergey Mikhailov. Another co-owner of Cherkizovo is the former wife of Babaev, Lidia Mikhailova.

The owners of the Miratorg agricultural holding are hidden behind the Cypriot Agromir LLC and Saudi Enterprises Limited LLC. However, all market participants are aware that the founders of Miratorg are the brothers Viktor and Alexander Linnik.

The beneficiary of Prodo Group of Companies is Andrey Gorodilov, of Rusagro Holding - Vadim Moshkovich, who, nevertheless, was forced to resign from the board of directors and leave the post of chairman of the board, as well as reduce his share in the group of companies - now he owns less than 50% shares. As a reminder, we previously wrote about the reasons for personnel reshuffles in the "tops" of Rusagro, Uralchem ​​and PhosAgro.

Vladimir Podvalny is listed as the owner of Velikoluksky MEAT Processing Plant. The main owner of the Prioskolie holding is Gennady Bobritsky, SPARK reports. And GAP "Resource" belongs to Viktor Nauruzov.

The Prodimex group is owned by the Cypriot Prodimex Farming Group and Igor Khudokormov (0.00030% stake), who is considered the main beneficiary of the holding.

The main owner of the large agricultural producer Sibagro, according to open sources, is Andrey Tyutyushev.

Foreigners in APK

The Dairy News analyzed which agricultural producers have foreign roots.

Thus, Stefan Duerr is the founder of one of the largest MILK producers, the EkoNiva Group of Companies, and the HEAD of the holding. According to SPARK, he is a citizen of the Russian Federation. According to SPARK, Stefan Duerr has 1% in the capital of the parent company, 98% - from the German Ekozem-Agrar GMBH, another 1% - from RSHB-Finance LLC.

Foreign owners - and the Penza milk producer "Rusmolko". According to SPARK, the management company of the Rusmolco Management Company holding is controlled by the Cypriot offshore Milky Project Limited. In 2019, it became known that the Singaporean Olam International consolidated 100% of the company's shares, having bought out a part from the founder of Rusmolco, Naum Babaev. And the Vietnamese TH Group has a division for the production and processing of milk in the Moscow region.

Land restrictions

The insignificant presence of foreign capital in the Russian agro-industrial complex is mainly explained by market participants as restrictions on the ownership of agricultural land. Thus, according to the Federal Law on the turnover of agricultural land, foreign citizens or companies in which foreigners own more than 50% cannot acquire land; for them there is one use case - rent.

“Thus, plots of agricultural land are classified as restricted in circulation (clause 2, article 27 of the RF LC). This regulation is a significant obstacle for foreigners to come to the Russian agro-industrial complex, and in accordance with the clarifications of the Constitutional COURT of the Russian Federation, it ensures the sovereign rights of the Russian Federation to its natural wealth and resources, protects the interests of the Russian economy,” comments Lyudmila Stepanova, lawyer in real estate practice and investments of AB "Kachkin and Partners".

According to her, at the same time, the Constitutional Court of the Russian Federation indicated that the federal legislator has the right both to completely refuse - in order to increase the investment attractiveness of the land plot market - from the said restriction, and to extend its effect to a wider circle - in order to support domestic agricultural producers.

“If we do not consider cases of illegal provision of agricultural land plots to foreigners, then the most common workaround for such plots may be the use of the institution of subsidiaries. For example, a site is presented as the property of a Russian legal entity, which is also owned by a Russian legal entity, which is already under the control of foreign entities,” the lawyer explains.

“Currently, in the context of sanctions with restrictions on transactions for the sale of objects and the payment of dividends by companies controlled by unfriendly states, indirect ownership through a subsidiary may already be difficult. In the context of counter sanctions and a ban on investments in the Russian economy, this does not worsen the situation with foreign investment in agriculture, which is virtually non-existent,” Lyudmila Stepanova believes.

Agriculture - no "theatrical gestures"

Some The Dairy News interlocutors agreed to comment on why there are few foreigners in the Russian agro-industrial complex and why such companies with foreign capital are in no hurry to make harsh statements.

According to one of the market experts, none of the players in the agro-industrial complex wants to leave Russia. Now the fact that they have practically no brands known to the international community has played into the hands of farmers. “There is a huge pressure on the owners of famous brands working in the consumer market sector. They are simply forced to curtail Russian business. At the same time, many companies in the b2b2 segment can safely continue to work, simply because they are better known among their business partners than among the public, ”comments the interlocutor of PionerProduct LLC .

Economist Anton Lyubich also believes that there will be no withdrawal of agricultural producers from Russia. “Land is the most valuable, irreplaceable resource. Particularly fertile land. Especially during the global food crisis,” he says. “If for processors the loss of the Russian market is a minus 5% of sales, which he can make up for through advertising in Germany or CHINA, then an agricultural producer, having lost land in Russia, will not find a replacement for it anywhere and in no way. Therefore, in agriculture, theatrical gestures “we are leaving” should not be expected. Nobody will leave voluntarily,” Anton Lyubich is sure.