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Dishonesty isn't the biggest problem for Russia ag investors

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Agrimoney.com's article on dishonesty in Russian agriculture struck a chord.

Theft is an issue for farming business in Russia and elsewhere but like any other operational issue you need to manage it.

This means having robust reporting and accounting procedures in place: having a weighbridge - you would be surprised on how many still use the soviet era manual weighbridge; having security; having security for your security; using technology such as fuel monitoring and GPS; and working with reputable buyers, sellers and service providers.

Each facet reduces the chances of theft, though you never entirely eliminate it you can manage it to tolerable levels.

'Short-term, knee-jerk solutions'

In my experience, the greatest problem facing agri investments is not theft, but the investors themselves.

More often than not the investors and board are not farmers, but they position themselves to make the important decisions.

Too often they try to solve long term problems with short-term, knee-jerk solutions when the real issue is to get the fundamentals right first.

The problems stem from a lack of finance which means the farm manager has constantly to make concessions and to prioritise expenditure.

The hard job

All my contacts, and me, do not complain about theft and dishonesty but of the same issues – the scarcity of equipment or working capital.

Dealing with theft is easy.

Dealing with investors is another thing.

The author, who preferred to write anonymously, is managing director of a private ag investment which farms more than 10,000 hectares in Ukraine

What do you think? For your say on the debate, write to Agrimoney.com at inquiries@agrimoney.com. Requests for anonymity will be respected

By Name supplied

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