Sino-Russian agricultural links take root

Strict regulations

Ying Junfeng, the soybean grower in Dmitlovo, said the soil in the area is fertile and suitable for cultivation and growth. In addition, Russia has strict regulations on food processing safety, environmental protection and the use of pesticides and fertilizers.

"Russia prohibits the cultivation of genetically modified crops," he said. "Therefore, non-GMO Russian soybeans could be a selling point in the Chinese market."

Wang Shilin, manager of Suifenhe Baoguo Economic and Trade Co in Suifenhe city, Heilongjiang, said the company has invested 160 million yuan ($22.6 million) in its two farms in Primorsky Krai in Russia's Far East that cover a total of 16,000 hectares of arable land, along with a 0.7-hectare pig farm with 6,000 animals. This year, its farms are expected to produce 15,000 tons of soybeans and 50,000 tons of corn.

Shilin said that under Russian law, grain cultivation must follow European Union standards and strict restrictions should be imposed on pesticides, fertilizers and seeds. "Moreover, Russia has encouraged grain exports with zero tax," he said.

Yue Hongwen, deputy general manager of Suifenhe Liangyun Agricultural Products Development Co, which was established in 2014, said it has a mature agricultural production chain in Russia, including planting, breeding, processing and logistics.

The company decided to invest in the Russian agricultural sector in view of the increasing demand for soybeans in China. In Russia, land rentals are lower, the soil is fertile and planting costs are relatively affordable, he said.

By the end of last year, the company had a 30-hectare farm in Russia with more than 100 sets of large agricultural machinery, and was planting on 10,000 hectares of arable land, mainly in Primorsky Krai. It has an annual output of about 20,000 tons of maize, 12,500 tons of soybeans and more than 8,000 tons of oat grass.

"In the next five years, we intend to cultivate an additional 50,000 to 60,000 hectares of high-quality organic land in Russia," Yue said."We will focus on growing organic and non-GMO agricultural produce for the Chinese market."

He said the investment return from growing soybeans in Russia initially ranged from 30 percent to 40 percent. However, as costs have increased, the return has fallen as more companies from South Korea, Japan and China have arrived in Russia in the past two to three years to grow soybeans.

"Taking tax and logistics costs into account, Russian soybeans, although they are non-GMO, are not competitively priced in China, as those grown domestically receive government subsidies," Yue said.

Chen said China and Russia have great potential for agricultural cooperation. But in the Russian Far East, infrastructure is backward, including soybean processing.

Compared with other main soybean producers such as the US and Brazil, temperatures in the Russian Far East are much lower, and as the crop is non-GMO, this restricts the yield.

In 2017, the soybean yield per hectare in the US was 3.29 metric tons. In Russia, it was 1.40 tons and in Brazil it was 3.38 tons, he said.