5 December 1997

Europe takes double money

PLANNING a farming venture in central or eastern Europe? If so, allow twice the time and money expected and find a local partner who can be trusted.

That was the advice from Chris Graf Grote, the German-born owner of 1600ha (4000 acres) in Norfolk, almost as much in former East Germany, and managing director of an investment company already farming in Poland and the Czech Republic and aiming to farm in Romania.

"Introducing new management structures has been most difficult. Old habits die hard and there are a lot of them. Total employment on our units is now about 130 compared with 600 18 months ago," he said.

"Change has led to much higher outputs and yields, but financially we are only just beginning to see improvements. Our overheads in establishing the farms are still far too high and we have not yet had the benefits of scale, although they are beginning to arrive," said Mr Graf Grote.n

The strength of sterling is also having an effect, helping the £ buy more local goods and services, but hindering when loans have to be paid back in hard currency.

The climate has been more severe than expected with six months of frost and flooding in Poland. Tax and other laws continue to evolve and establishing proper titles to leases, shares, and machinery is difficult.

"There are big opportunities still left, but they are going fast. We are pursuing the corporate route with local partners, while others seek to establish an extension to their business at home. A good look round with adequate time and informed guidance is essential," he said.