Deep in the Caucasus, downriver from Europe’s highest peak, North Korean women roam Soviet-era hothouses growing what tycoon Vladimir Evtushenkov is betting will be his next big bounty: the T-34 battle tomato.
The plump hybrids, named for the fearsome tank that helped trounce Hitler, are the pride of the Yuzhny Agricultural Complex, a mass of greenhouses the size of 2,300 football fields between the Black and Caspian seas. Watered by melting ice from towering Mount Elbrus, they and other strains of the fruit are grown here by the millions and trucked mainly to Moscow, 18 hours’ journey north.
Evtushenkov, at 67 the oldest of the top 40 Russians in the Bloomberg Billionaires Index, has impeccable timing. His AFK Sistema, which invests in everything from cellular services to medical clinics, acquired Yuzhny in December, the same month Vladimir Putin re-affirmed achieving food self-sufficiency by 2020 as a national goal.
And unlike Josef Stalin’s first five-year plan, which led to the Great Famine, Putin is dangling profit rather than prison to motivate the masses. Once a totem of communism, T-34 is now a symbol of patriotic capitalism. “This is a very promising area,” Evtushenkov said in an interview.
Stung by oil’s collapse, the ruble’s plunge, financial sanctions over Ukraine and the longest recession of his 16-year rule, Putin, 63, is seeking to minimize Russia’s reliance on markets he can’t control. Counter-sanctions imposed on food imports and an unprecedented raft of subsidies have made many areas of farming more profitable than even crude, which Putin once called Russia’s “golden goose.” Food prices have soared along with inflation, which is running almost double the central bank’s 4 percent goal, shifting even more wealth from hard-hit consumers to well-connected producers.
Take Ros Agro Plc, the sugar and meat producer controlled by billionaire Vadim Moshkovich. It last year received about 3 billion rubles ($46 million) in state support and paid zero tax on profits, helping to boost its net earnings margin to 33 percent, 28 points more than oil major Lukoil PJSC. The company’s Moscow-listed shares have almost doubled in the last year.
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