1 Making a difference on a global scaleCentral Black Earth Region European Russia July 2010

2 “Biofarming” Farming that takes into account the welfare of the community, the health of the individual, the local and global environment, energy conservation, soil conservation, humane treatment of animals, and producing healthy food for the nation and the world.

3 Goal 1: Facilitate large scale “BioFarming”Industrial Organic Bio Farming Non Chemical No Yes Low carbon emission Sometimes Non GMO Pro Community - High employment - Healthy - Labor intensive Short distance to market Usually not Ecologically clean Self-fertilizing Bio diverse Small plot Harmonious balance between livestock and crops Humane treatment of animals Profitable. Economically self-sustaining

4 Goal 2: Get the word out. Plan, adequately finance, and run a sophisticated communications strategy. Resource-rich, dual-language website about the project. Latest web-promotion technologies and strategies: facebook, viral marketing, online communities, newsletter, RSS, cross-promotion. TED talks, similar venues. Russian and international media campaign. Speaking tours by founders. In addition to showing the world what is possible, and spreading the model, this will attract talented and committed individuals from Russia and other countries - the most important factor to the success of the project.

5 How large? 1000s of people. 10s of thousands of tons of produce.100s of rural communities. … In a compact geographic area

6 Where? … in European Russia.11 reasons why the best place to do this is … … in European Russia.

7 #1 Consequence What happens with Russian agriculture is vitally important to agriculture around the world. Huge producer, equal to the US + Canada combined Currently undergoing dramatic change A global tipping point A “second chance” for world ag For background on the current state of Russian agriculture, see related presentation: “Contemporary Agriculture and Small Plot Farming in Russia.”

8 #2 Real Profits Farm wages: $300 / month1st world domestic produce prices and proximity to high value European food markets … Yet … 3rd world land and labor costs. Farm wages: $300 / month Land price per ha in property: $500 ($200 / acre) Discounted cash flow value of productive land = $2500

9 Real Profits (Cont’d) This is not a request for a hand- out.Due to the unusual history of agricultural development in Russia, strong profits can currently be made in Russian agriculture. It is an historic opportunity. Annual IRRS for industrial agriculture are running at 30% per annum for the first 5 years. We hypothesize that bio-farming could match that rate of return.

10 #3 Geographic advantageAsia, Latin America, and Africa also have low land and labor costs but … Have low domestic price points. Are far from high value markets. Are less fertile. Often have water shortages.

11 #4 Scale. Bang for the buck.Low costs allow a far larger scale for equal investment than possible in Europe or North America – 20x larger. Land: 10x cheaper Labor: 10x cheaper Ample state bank financing available. Under-employed work force already on the land.

12 #5 A head start “Biofarming” is largely in place all over Russia.Leverage an existing situation. No need to start from scratch. Russia is non-GMO For a brief history of non-industrial farming in Russia up to the present day, please see the related presentation: “Contemporary agriculture and small-plot farming in Russia”.

13 #6 Clean ecology Low historical chemical use means Russian soil and groundwater not contaminated. Many Russian agricultural areas have never seen chemical use. Many more have not seen them for the last 20 years.

14 #7 Super-rich soil The “black earth belt” which stretches across the Ukraine and European Russia is a geological miracle, with top soil 10x thicker than most global farmland, and far more fertile. Highly relevant for non- chemical farming. The soil is actually “black”, like potting soil from a garden center. Black Earth on Wikipedia (keyword – “chernozem”)

15 Black earth pictures

16 #8 Abundant water resourcesEuropean Russia has substantial rainfall, as in Europe. There exists abundant groundwater for irrigation needs where necessary.

17 # 9 Financial leverage Equity capital can be leveraged as much as 300% by subsidized state farm credits. Additional equity capital can be attracted from the growing “green capital” movement. A micro-finance lender can be set up to provide efficient lending to small plot farmers.

18 #10 Inexpensive farm creditThe Russian govt subsidizes 75% of interest payments on farm credit. This means real interest rates of about 6% per year. 75% of required investment capital can be financed in this manner.

19 #11 Government Support Agriculture is a top government priority and an area of personal interest of the top leadership, i.e. Putin, Medvedev, Zubkov. Agriculture is one of the few economic sectors in which Russia can be globally competitive. These top leaders are committed to diversifying the economy away from dependence on extractive industries. They are strongly committed to making agriculture work in Russia, and personally pay very close attention to it. Substantial subsidy programs. Govt subsidizes rural phone and internet access. Govt subsidized crop insurance. They want to keep populations on the land, build local communities, and reverse a catastrophic national demographic and health crisis. They are aware of the health and environmental problems that come with the US model of industrial agriculture, and are open to alternatives. Unlike most agricultural countries, they have substantial resources to invest in the sector, and are willing to do so. A project like this would be enthusiastically welcomed and supported by the Russian state. Founders have excellent communication channels to the top Russian agriculture policy makers.

20 The program Identify high-margin opportunities.Provide financing to small producers. Create sales, distribution and marketing channels. Create knowledge centers for information sharing and exchange, and method improvement. Finance and organize communal use of small scale processing, greenhouses, etc. Market the concept to financial investors. Work with the government to support and certify “Biofarming”.

21 High margin, low tech. Vegetable production, storage, and packaging – 40% IRRs over 5 years. (potato, carrots, cabbage.) Oil pressing – 50% IRRs over 5 years. Canning – fruits, berries, vegetables. Dairy processing – cheese, cultured milk products. Flour milling – 30% IRRs over 5 years.

22 Biodiversity Vegetables (potato, tomato, cabbage, squash, pumpkin, melons, carrots, radish, horseradish, onions, garlic, cucumber, celery, peas, beans, beets) Grains (wheat, rye, barley, corn, buckwheat, millet, quinoa, amaranth) Seeds (sunflower, pumpkin, rapeseed) Greens (cilantro, parsley, mint, dill, dandelion, basil, lettuce) Fruits (apples, plums, cherries, sour cherries) Berries (strawberry, blueberry, gooseberry, black currant, red currant) Dairy (cow, goat)

23 Low-tech, labor intensive processingCanning Fermenting (cabbage, vegetables) Pickling Milk products (kefir, yoghurt, sour cream, cheese) Milling Oil pressing (Sunflower) Drying (Fruits, berries, mushrooms) (Greenhouses)

24 Low tech, humane, labor intensive livestockChickens Cows Goats Sheep Geese (Beekeeping)

25 Off season employment / activityDue to relatively long winters, special attention needs to be paid to creating winter activity, income and employment. Livestock care Wood working Marketing, promotion Building construction Equipment repair Product distribution Personnel recruitment Schooling Green-housing Basket, wicker production Handicrafts – knitting, etc. Cultural development – music, art, dance, etc. Sports.

26 Attract great people There is an enormous global resource of talented individuals with great expertise committed to improving agriculture, particularly in Western Europe. Within Russia there are large numbers of highly educated and talented people who would join a project like this. There are many young people growing up in rural communities in Russia with few job prospects. They often migrate to the cities to find work. A systematic effort could be made to bring these people to work on the bio farms. This project would make attracting great people a special focus, accessing these resources, laying a strong foundation for the future.

27 Access global popular financial supportWork with Kiva.org * or similar structures to facilitate small person-to- person loans from people sympathetic to bio farming around the world. Facilitate loans to small farmers in the bio- communities. * For an inspiring overview of the remarkable Kiva.org, you can find an excellent video about it at

28 A global example This would be the largest example of how wide-scale non- industrial, small plot farming can be successful since the Cuban experiment. It would go further than the Cuban experiment, demonstrating that non- industrial small plot farming can be financially profitable in a market environment on a large scale, competing directly against industrial agriculture.

29 Required Investment This project would be highly scalable, and could be tailored to varying amounts: $US 3 – 30 million. To have maximum global impact, we recommend at least a $20 million commitment. This money could be leveraged 2- 3x. These investments would be highly profitable, cycling profits back into the project

30 Final comment The crisis in modern food production originated in the developed world. The developed world is rich and creative, and exports its ideas and methods around the world. This is a chance to show close to home, in Europe, that agriculture can work differently, yet make money in the real world. If successful, the model will inspire others and spread around the world. Russia offers the world its best “second chance”, to get out of the dead end of industrial agriculture.

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38 Thank you for your attention