High food prices spur expansion in Eastern European crops – UN food agency

11 September 2008

A senior United Nations food agency official today predicted a bumper harvest of cereal crops in Russia and Ukraine for this year and said the region possesses significant untapped agricultural potential.

Rising food prices have led to an expansion of land used for agriculture in the two countries, with an increase of 2.4 million hectares to 33.8 million hectares of soil sown with wheat, according to the UN Food and Agriculture Organization (FAO).

In Russia alone, aggregate grain area – wheat, coarse grains and rice – is forecast at nearly 46 million hectares for the 2008 harvest, which is 2.6 million more than in 2007.

“This clearly shows that higher prices can be an opportunity for the farming community,” said Charles Riemenschneider, Director of FAO’s Investment Centre, at the opening of the two-day meeting in Paris on agricultural developments in the region.

Earlier this year FAO and the European Bank of Reconstruction and Development (EBRD) highlighted that as much as 13 million hectares of unused farmland lay idle in Eastern Europe and the Commonwealth of Independent States (CIS) – 12 of the 15 former Soviet republics.

According to FAO figures, this land is already being exploited, with an aggregate production of wheat in the European CIS countries set to rise to more than 73 million tonnes in 2008, some 13 per cent more than the successful harvest of 2007.

“In March we discussed opportunities for enhancing agricultural output, and we can see from these figures that benefits are already materializing that could make a real difference on world markets,” said Mr. Riemenschneider.

“Both countries [Russia and Ukraine] have significant exportable cereal surpluses, but more long-term investment is needed to ensure that this supply response is sustainable,” he added at the meeting, which was sponsored by FAO, EBRD and the World Bank.

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