What you sow is what you sow

The tightening of rules for foreign seed suppliers in Russia increases the interest of large local investors in this business. A company associated with Iskandar Makhmudov, Cosminvest, has set up a joint venture with Schelkovo Agrokhim to produce oilseeds. The partnership will make it possible to better provide Cosminvest with seeds for 210 thousand hectares, as well as sell the material to the market.

The Kosminvest company, 50% of which is owned by the ex-president of the UMMC Iskandar Makhmudov through Violan LLC (Forbes estimates his fortune at $ 7.3 billion), created Helianta LLC with Schelkovo Agrokhim, with the main activity being the cultivation of oilseeds. cultures. Helianta was established on July 7 and belongs to partners on a parity basis, it follows from the data of the Unified State Register of Legal Entities. The name of the new company may be related to the Latin name for the sunflower, Helianthus annuus.

Schelkovo Agrokhim, according to its own data, occupies 19% of the Russian market for plant protection products and has been developing seed production in recent years. Together with Rusagro, a large sugar producer, the company owns a center for the creation of sugar beet hybrids, and also develops hybrids of sunflower, soybeans, cereals, etc.

According to the BEFL, as of July 2022, Cosminvest controlled 210 thousand hectares of agricultural land, ranking 26th in the landowner rating. In addition, Investcom LLC, associated with Mr. Makhmudov, in November 2022 became the owner of the AFG National agricultural holding with approximately 180 thousand hectares of agricultural land, according to BEFL data as of last July. Cosminvest’s contacts could not be found; Investcom did not answer questions. The representative of Shchelkovo Agrokhim did not provide a comment.

The issue of providing seeds is becoming relevant in the context of tightening rules for foreign suppliers and possible restrictions on imports. From September 1, foreign producers must create joint ventures with local organizations with a share of non-residents of no more than 49%, carry out full-cycle selection and report on localization to the Ministry of Agriculture. The rules have already caused concern among European market participants (see Kommersant of July 3). In addition, from October 1 to December 31, the Ministry of Agriculture may introduce quotas for the import of seeds of potatoes, wheat, rye, barley, corn, soybeans, rapeseed, sunflower and sugar beet from a number of countries.

At the end of 2022, the Ministry of Agriculture estimated the average level of provision with seeds of local selection at 60.3%, and by 2030, according to the food security doctrine, the figure should reach 75%. The share of Russian sunflower seeds was previously estimated by Kommersant’s interlocutors on the market at 23-25%.

Eduard Zernin, chairman of the board of directors of Bio-Tone, a large sunflower producer, says that it is necessary to increase the volume of our own seeds so as not to depend on external circumstances. The interest of large, well-capitalized agricultural holdings in projects in this area is fully justified, he says. Bio-Tone, Mr. Zernin continues, develops joint projects with a number of Russian breeders and seed growers.

Kommersant’s source on the market says that the purchase of seed material from a partner who acts as a seed developer is insurance against underdelivery and allows you to conclude contracts for the next season at a fixed price. In the context of the annual rise in the cost of fixed assets in crop production, this helps to redistribute financial flows, as required by the dynamic situation on the market, the interlocutor of Kommersant notes. Director General of the Institute for Agricultural Market Studies Dmitry Rylko says that the new company is most likely created to sell sunflower seeds to the market, and not to meet the needs of one of the partners: barriers to entry for foreign suppliers to the local market are increasing, and incentives for domestic production are also increasing . As reported by TASS, the general director of Schelkovo Agrokhim, Salis Karakotov, estimated the additional income of Russian seed suppliers from the reduction in the share of foreigners at 100 billion rubles.

Anatoly Kostyrev