While in Kazakhstan, I visited the President of Grain Union, an organization of 15 farms totaling 3 million ha. (7.5 million acres) out of 16 million ha (40 million acres) of land currently under cultivation in Kazakhstan. The president's own farm had harvested 1 million ha (2.5 million acres) of wheat, the previous fall. My colleague, Al Scholz, had worked the previous summer for one of the members on their 5000 ha (of 300,000) research farm. The president assured us that no one in Grain Union needed the services of a dry land farming agronomist from Canada specializing in minimum tillage technology transfer.
Farm machinery dealers love these guys because they buy in unheard of volumes - dozens of combines or tractors at a time, each worth $250,000 to $350,000. One dealer said to me last year rather scornfully that the really nice couple we had just had lunch with, who ONLY farmed 25,000 ha (63000 acres) really weren't worth his time. They were just too small to bother with.
Yields on these big farms run about 1.5 tonnes/ha (22 bu.) under conditions which in Saskatchewan on smaller farms (1000 to 10,000 ha; 2500 to 25,000 acres) are producing average yields between 2.0 tonnes per ha or 30 bu/acre to 2.3 t/ha or 35 bu per acre on average. The difference isn't technology; it is management. Pure and simple, it is impossible to coordinate people well enough to do the right things at the right times on a local enough scale to get more grain out of the ground with the same inputs.
Land is leased from the state for 50 years at $0.67 per ha. or essentially free. Since there is no land security, banks don't loan money to farms. Their initial cash flow must come from somewhere else such as government business connections. The 15 big owners are all Kazakhs, certainly part of President Nazurbaey's power structure. My guess would be that the next tier down are all Russians or Ukrainians or Germans.
Oh, and the sole purpose of Grain Union organization? To lobby government.
Sounds a lot like Saskatchewan to me.
ReplyDeleteSounds like a recipe for disaster to me. One good drought and it's Hooverville for all.
ReplyDeletelast year was the worst drought in memory. Yields were down as much as 40%. That is why lobbying the government is so important to these big guys. Good management would have done better than "assembly line farming".
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