Agro-holdings and

other types of mega-farming operations

in developed and emerging economies

Alfons Balmann Fabio Chaddad Frans Hermans

Pre-conference workshop of the 29th International Conference of Agricultural Economists, August 8, 2015

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• Within a holding company organized agricultural enterprises/farms

– vertically organized ag enterprises

• agricultural enterprises serve as input suppliers of processors

• example: Smithfield Foods

Definition of agroholdings

Pork

Hog Production

International

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• Within a holding company organized agricultural enterprises/farms

– vertically organized ag enterprises

• agricultural enterprises serve as input suppliers of processors

• example: Smithfield Foods

Definition of agroholdings

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• Within a holding company organized agricultural enterprises/farms

– vertically organized ag enterprises

• agricultural enterprises serve as input suppliers of processors

• example: Smithfield Foods

– horizontally integrated ag enterprises

• management company conducts ag production

• examples: El Tejar, Cresud, NCH Capital, Ivolga Holding, KTG Agrar

Definition of agroholdings

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• Within a holding company organized agricultural enterprises/farms

– vertically organized ag enterprises

• agricultural enterprises serve as input suppliers of processors

• example: Smithfield Foods

– horizontally integrated ag enterprises

• management company conducts ag production

• examples: El Tejar, Cresud, NCH Capital, Ivolga Holding, KTG Agrar

– usually mixed forms with vertical and horizontal integration

– management holding with direct interventions even in operational decision processes of the farms

Definition of agroholdings

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Agroholdings with largest land bank

Name Origin Countries of production Land bank

S. Kidman & Co. Australia Australia 10.1 mill. ha

Australian Agricultural Co. Australia Australia 7.0 mill. ha

North Australian Pastoral Australia Australia 5.8 mill. ha

Consolidated Pastoral Co. Australia Australia 5.7 mill. ha

Beidahuang Group China China, Argentina,… 5.4 mill. ha

Ivolga Holding Kazakhstan Kazakhstan, Russia 1.5 mill. ha

KazExportAstyk Kazakhstan Kazakhstan 1 mill. ha

El Tejar Argentina Argentina, Brazil,… 1 mill. ha

Cresud Argentina Argentina, Brazil,… 1 mill. ha

NCH Capital USA Ukraine,… 820 tsd. ha

Agrocenter Astana Kazakhstan Kazakhstan 700 tsd. ha

UkrLandFarming Ukraine Ukraine 670 tsd. ha

Kernel Group Ukraine Ukraine 420 tsd. ha

MHP Ukraine Ukraine 360 tsd. ha

Razguliay Group Russia Russia 350 tsd. ha

Sources: www.latifundist.com/rating/top-10-latifundistov-mira; Ostapchuk (2015)

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Agroholdings with largest land bank

Name Origin Countries of production Land bank

S. Kidman & Co. Australia Australia 10.1 mill. ha

Australian Agricultural Co. Australia Australia 7.0 mill. ha

North Australian Pastoral Australia Australia 5.8 mill. ha

Consolidated Pastoral Co. Australia Australia 5.7 mill. ha

Beidahuang Group China China, Argentina,… 5.4 mill. ha

Ivolga Holding Kazakhstan Kazakhstan, Russia 1.5 mill. ha

KazExportAstyk Kazakhstan Kazakhstan 1 mill. ha

El Tejar Argentina Argentina, Brazil,… 1 mill. ha

Cresud Argentina Argentina, Brazil,… 1 mill. ha

NCH Capital USA Ukraine,… 820 tsd. ha

Agrocenter Astana Kazakhstan Kazakhstan 700 tsd. ha

UkrLandFarming Ukraine Ukraine 670 tsd. ha

Kernel Group Ukraine Ukraine 420 tsd. ha

MHP Ukraine Ukraine 360 tsd. ha

Razguliay Group Russia Russia 350 tsd. ha

Sources: www.latifundist.com/rating/top-10-latifundistov-mira; Ostapchuk (2015)

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• Analysis of agroholdings / mega-farming operations

– prevalence

– economic performance

– societal and environmental implications

in an international perspective!

• Bring together experts from various parts of the world to exchange their insights and foster collaboration!

• Regional focus is on developed and emerging countries, less on developing countries!

Focus is not on the issue of land grabbing! (although there are related issues)

Goals of this Workshop

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Structure of programme Structure of the Preconference Workshop

time Presentations / presenters

8:45 – 9:00 • Opening / Welcome (Alfons Balmann, Fabio Chaddad, Frans Hermans)

Session 1 9:00 – 10:00 (Frans Hermans)

• Multi-type large-scale farming operations in China (Zuhui Huang, Shaoshen Jin) • Capital Structures For Large-Scale Agriculture: Perspectives from Australia

(Bradley Plunkett)

10:00-10:30 COFFEE BREAK

Session 2 10:30 – 12:30 (Oane Visser)

• Investment in Land Development: An Overlooked Dimension of the Land Grab Discourse on Frontier Agriculture (Derek Byerlee, William A. Masters, Daniel Robinson)

• Do Agroholding Members Perform Better than Independent Farms? Evidence from the Belgorod Oblast (Ekaterina Gataulina, Heinrich Hockmann and Anton Strokov )

• Labor supervision in agro-holdings: Insights from post-socialist agriculture (Martin Petrick) • Agro-holdings and Mega-farming: The evolution of farm networks in Argentina

(Sebastián I. Senesi, M. Daziano, Fabio R. Chaddad, H. Palau)

12:30 – 14:00h LUNCH

Session 3 14:00 – 15:30 (Martin Petrick)

• Productivity and Profitability Developments in Ukraine: Agroholding versus Independent Enterprises (Igor Ostapchuk, Alfons Balmann, Jarmila Curtiss)

• The Strategic Role of Corporate Reputation: Transparency, Ownership and Shareholder Value in Agriholdings (Taras Gagalyuk)

• Corporate Farm Managers, Combine Drivers and the Rural Community: Socio-economic Consequences of the Emergence of Finance-led large-scale Farming in Russia and Ukraine (Oane Visser)

15:30-16:00 COFFEE BREAK

16:00 – 17:15 (Alfons Balmann)

Wrap up: RESEARCH CHALLENGES AND POLICY IMPLICATIONS • Summary and Discussion (Derek Byerlee) • Open Discussion

Areas and topics for discussion include:

Strategic Management: • Uncertainty, Risks and Volatility of Agricultural Markets

• Governance, Corporate Culture and Stakeholder Relations

• Investment/Divestment Decisions and Modes

Boundaries of the Firm: • Large Farm Organization and Structure

• M&A vs. Organic Horizontal Farm Growth

• Agri-Food Chain Management

Financial Performance: • Financial Diversification and Value Creation

• Planning, Monitoring and Controlling Systems

• Access to Finance

September 21-23, 2016 | Kyiv, Ukraine September 16-18, 2015 | Kyiv, Ukraine

Production Efficiency and Productivity: • Total Factor Productivity

• Technical Efficiency

• Optimal Farm Size

Technologies & Innovations: • Tillage and Crop Technology Adoption

• Integrated Soil Fertility Management

• Farm Sustainability through Reduced Resource Use

Human Capital: • HR Planning, Recruitment and Selection

• Motivation and Incentive Systems

• Learning, Training and Re-qualification

On-Farm Security Systems

The papers presented on Large Farm Management Conference 2015 will be published electronically by AgEconSearch

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Thank you for your attention!

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IAMO Forum 2016

„Rural Labor in Transition: Structural Change, Migration and Governance”

22-24 June 2016 | Halle (Saale), Germany www.iamo.de/forum/2016