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Farms don’t need to be mega-sized to be viable

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Published: November 24, 2011

We like to think we have big farms in Western Canada, but that perspective changes a bit after spending a week at Agritechnica in Hanover, Germany.

We have big operations compared to Western Europe, but we’re small compared to Russian, Kazakhstan and Ukraine.

Stefan Duerr grew up on a 35 acre farm in Germany. One of six kids, there wasn’t much future for him on the home farm. After training in Russia, he banded together with other shareholders to start a farm in that country.

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In a decade, the operation has spread across a number of locations and has grown to include 320,000 acres of arable land and thousands of dairy cattle. The goal is 740,000 acres and 25,000 cows by 2015.

We don’t often think of Russia when we talk about farm subsidies, but Duerr said there’s up to 50 percent government support for machinery purchases.

Farms are also huge in neighbouring Kazakhstan, where Turemurat Utepov farms 30,000 acres. With dry-land farming conditions similar to Western Canada, Utepov was the first in his country to buy a Bourgault air drill from Canada.

He now has eight Bourgaults and pulls them with Buhler Versatile tractors from Winnipeg.

The dealer who sells Canadian products to Utepov is Michele Trincia. In addition to being Bourgault’s top dealer worldwide, Trincia handles Buhler products as well as Honeybee grain belt headers, which are now on scores of Russian combines.

Trincia’s smallest client has 12,000 acres. His largest is Kazexportastik, one of the biggest farm operations in Kazakhstan with 1.8 million seeded acres. At that scale, the purchase of 20 air drills and tractors at a time is not unusual.

Ukraine is heading in the same direction. Farmland sales are still restricted, but big holdings have emerged nonetheless. The country boasts legendary soil fertility and adequate rainfall for growing great crops.

There were tough times in the 1990s after the collapse of the Soviet Union, and the dissolution of state farms has not resulted in a proliferation of successful family based operations. Instead, it’s estimated that about half of the land is now farmed by large companies.

“If you’re small, there’s no use even going to a lender for money,” said Alex Lassies, president of the Ukrainian Agribusiness Club.

“Family farms will not play a role in cash crops because they can’t compete with large farms.”

He said large operations have a preferential tax regime.

Mriya Agro Holding is an example of what he’s talking about. The farm was only 120 acres in 1992. Now it has 600,000 acres, mostly in western Ukraine. It wants to add another 250,000 acres in the years to come.

One family has 80 percent of the Mriya shares with the other 20 percent traded on the public exchange in Frankfurt. Sunflowers, sugar beets, corn, potatoes, winter wheat and winter rapeseed comprise the main crops. The company deals directly with international food companies.

When you hear about this amazing size and scope, it makes you wonder about the future of the moderate-sized operations that are the mainstay of the grain sector in Western Canada.

Agritechnica helps put that into perspective. There are hundreds of thousands of visitors to this giant farm equipment show. Most are farmers, most are from Europe, specifically Germany. A few might have 2,5000 or even 5,000 acres, but many have fewer than 250.

They’re defying the wisdom that you have to be mega-sized.

Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at kevin@hursh.ca.

About the author

Kevin Hursh

Kevin Hursh

Kevin Hursh is an agricultural commentator, journalist, agrologist and farmer. He owns and operates a farm near Cabri in southwest Saskatchewan growing a wide variety of crops.

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