Russia, Ukraine set to expand agricultural output

14:53, 11 September 2008
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Considering higher prices for commodities

Russia and Ukraine are set to significantly expand their agricultural plantings this year as higher prices for commodities such as wheat, coarse grains and rice spur farmers to expand their plantings, the U.N. Food and Agriculture Organization said Thursday, according to AP.

Aggregate output of wheat in the European members of the Commonwealth of Independent States, a loose alliance of ex-Soviet nations, is forecast to rise 13 percent this year to 73 million tons, the FAO said in a statement.

The FAO and World Bank are taking part in meetings in Paris this week on financing farming in eastern Europe and Central Asia.

Russia and Ukraine will expand their wheat plantings this year by 2.4 million hectares (5.9 million acres) to 33.8 million hectares (83.5 million acres). In Russia alone, total plantings of all grains is expected to reach 46 million hectares (113 million acres) this year, 2.6 million hectares more than in 2007, the FAO said.

The FAO is organizing a two-day meeting in Paris to discuss the agricultural potential of countries in central and eastern Europe, the Caucasus and Central Asia.

Lured by soaring food prices, corporations — both domestic and foreign — have been snapping up land in southern Russia`s fertile "black earth" region, replacing inefficient Soviet-style collective farming with modern farming techniques and economies of scale.

Russian government officials recently announced plans to transform the country into the world`s leading grain exporter within five years.

High oil prices, changing diets, urbanization, expanding populations, flawed trade policies, extreme weather, growth in biofuel production and speculation have sent food prices soaring worldwide, trigging protests from Africa to Asia and raising fears that millions more will suffer malnutrition.

Internationally, overall food prices have risen 83 percent in three years, according to the World Bank. Part of the increase is the result of adverse weather in major grain-producing regions, with spillover effects on crops and livestock competing for the same land.

AP

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