11 April 1997

Tread carefully to reap East European rewards

EXPECTATIONS of high yields, cheap land and easy profits from eastern Europe are misplaced.

The reality is an area of complex legislation, volatile economies and poorly developed infrastructures, delegates to the recent Farming Opportunities in Eastern Europe conference at Silsoe College, Beds, were told.

Any potential business, therefore, requires extensive research, a detailed understanding of the laws and careful risk management, stressed Stuart Ward, a consultant with Koesling Anderson based in former East Germany.

Time should be spent on understanding whats on offer, then establishing potential earnings and return on investment. Analysis should include factors such as weather, soil type, machinery availability and staff skills.

While sole ownership may be the first choice, it may be wise to reduce risk by introducing partners or shareholders, said Mr Ward.

And when it comes to staffing, the old adage of "pay peanuts, get monkeys" rings true. "Pay Western rates, offer support and training and be prepared to move yourself if need be," he advised.

But, with the right personality, careful management and sound advice, Mr Ward believed eastern Europe still offered a rewarding challenge.

One farmer to try it is Richard Phillips, who moved to Poland last year to farm 800ha (2000 acres) and has since added a further 325ha (800 acres).

"Average wheat yield is just 3t/ha (1.2t/acre), similar to the UKs average back in the 1940s and 1950s," he said. Most land is acidic, deficient in nutrients and susceptible to drought.

Trials of Western varieties suggest 12t/ha (4.9t/acre) is possible on the best land, though it is debatable whether they would withstand a typical Polish winter, he said.

Mr Phillips initially planned to put a manager into the Polish unit. But now he believes it will take a further two to three years of his own full-time management before he can return to the UK. &#42