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A New Zealand accountancy firm is hoping to entice Kiwi dairy farmers to expand their investment horizons through a joint venture into Russia.
Staples Rodway director Wade Glass said the firm was approached by Russian businessman Adyl Kyberbekov, who lived in New Zealand a year ago.
In October the firm took a group of farmers to Russia and in February it is planning a second trip to try to encourage farmers to consider Russia as an investment opportunity.
Glass said New Zealanders already invested in dairy farms in Australia and South America and he believed Russia could offer strong potential, as its Government was very supportive of the agriculture industry and was encouraging money to be poured into it through subsidies.
"They just don't have enough dairy products to feed the population there. Russia imports 60 per cent of its dairy products."
The price for milk in Russia was also much higher because of the demand, while land prices were a fraction of those in New Zealand.
Glass said he was trying to put together a company that would invest in a mega feed lot farm of around 25,000ha.
It would start with just 2000 cows and build that up to more than 20,000 within a few years.
To establish it the company was looking for around US$10 million.
He hoped to encourage a group of New Zealand farmers to invest about $500,000 each and was also looking for a cornerstone investor.
New Zealanders cannot legally own land in Russia, but Glass said a company which was 50 per cent owned by foreigners could own land, which was why a partnership with a local was vital.
Federated Farmers dairy spokesman Lachlan McKenzie said he was not surprised to hear New Zealand farmers were being encouraged to look elsewhere for investment returns but questioned whether many would go for it given the risks.
"The question I always have, and I have been to Russia, is what is the political situation and what is the legal system?
"These are the things that have to be worked through for anybody who is considering investing there."
Countries like Russia and South America often had a volatile political situation and a change in Government could see dramatic changes for foreign investors, he said.
"You have got to look at the history and stability of a country."
