Recently, AG Chat interviewed George Rohr, co-founder with Moris Tabacinic of NCH Capital, to discuss the firm’s pioneering farmland investments in Ukraine, Russia and elsewhere in Eastern Europe.
As George Rohr explained to AG Chat’s Marc Dresner, funds managed by NCH Capital presently has $1.4 billion of equity dedicated to acquiring farmland and running farm operations in Ukraine and Russia. Investors in the funds include leading US and European pension funds, university endowments, foundations, and wealthy families.
George Rohr explained that this farmland is among the most fertile in the world — Ukraine was historically the “breadbasket of Europe”, and Russia was also a major exporter of grains. After suffering through decades of chronic underinvestment, the agricultural sector is rapidly transforming itself, and the underlying land is well on its way to reestablishing its former highly productive yield capacity.
For NCH, it has been an often tedious, painstaking process assembling the 450,000 hectares (i.e., over 1 million acres) of farmland in Ukraine and the 250,000 hectares (i.e., 600,000 acres) under their management in Russia. The farmland was privatized in very small plots and only the former collective farmers were allowed to purchase them at first. These farmers lacked the capital and technological wherewithal to develop their land bases into large, economically viable farming units, and many seemed doomed to continue with only subsistence farming.
NCH Capital has managed, over time, to assemble these small plots into vast contiguous farms that offer the scale sufficient to justify bringing in highly sophisticated farm management teams, state-of-the-art farming equipment, modern harvesting techniques and the most current sustainable farming practices. These factors bring the soil to its highest yield capacity and enable NCH to create long-term value for its investors, the local communities, and all its stakeholders.