AGWEEK EXCLUSIVE: A farming evolution
TAROMYSHASTOVSKAYA, Russia -- Alexander Bolobolov says his family history on the farm that he heads with his son, Denis, goes back to 1820. Today a customer of ACT, the John Deere dealerships run in partnership with RDO companies in Fargo, N.D., ...
TAROMYSHASTOVSKAYA, Russia -- Alexander Bolobolov says his family history on the farm that he heads with his son, Denis, goes back to 1820.
Today a customer of ACT, the John Deere dealerships run in partnership with RDO companies in Fargo, N.D., Bolobolov proudly wears the "owner's ring" -- worn like a wedding ring -- that goes back to when his great-great-grandfather was the head man at the farm. That Bolobolov owned 160,000 hectares -- some 400,000 acres in the Stavropol region.
"He had a lot of horses; he was a real farmer," Bolobolov says.
Then came the breaking up of land into Kolkhozes and later into collectives. And then the Soviet revolution.
In 1997, after the Soviet Union's collapse, Alexander came back to the farm from other businesses he'd started, and took control of the farm. It's in the village of Staromyshasktovskaya, a town of about 10,500 people about a half-hour from Krasnodar. Six years ago, the 18,000-acre farm started making a gradual switch toward western-style, John Deere equipment that he purchased from the ACT partnership. The transformation started with tractors, then combine harvesters.
Andrey Mechkalo, one of three salesman from ACT's Dinskaya store, looks after the Bolobolov family's farm needs. Mechkalo holds a mechanical engineering graduate of the region's agrarian university.
In an interview, interpreted by ACT employees, Bolobolov explains that farm headquarters was built in 1973 for the purpose. The farm raises wheat, sunflowers, corn, soybeans, green peas, sweet corn, vegetables, tomatoes, plums and poultry. They raise 40,000 hens in an egg-laying operation, as well as ducks for meat. The company has a flour mill and bakery that makes products for the city of Krasnodar.
"If we take into account just land territory, we are a medium farm," Bolobolov says. "But if we take the productivity (including processing), we can estimate ourselves higher."
Born to the land
Bolobolov, 54, was born in 1956.
"I was born on the land," he says. "I worked with cattle, and in the field, as a child. When I was 8 years old, my father gave me a horse."
Asked about turning points in his life and career, Bolobolov doesn't have to think long.
The first turning point was his time in the Russian Army.
"It was discipline," he says of the experience. "I learned how to make friends, how to be together with people, how to communicate in society."
Next came the "perestroika" period, when President Mikhail Gorbachev put in motion events that would lead to the collapse of the Soviet Union and a shift toward a market economy and private property ownership.
"Before this collapsed, everyone worked as a slave," Bolobolov says.
The farm had 1,200 employees. Bolobolov worked for the farm and supervised a team of people. The head of the farm said farewell, and Bolobolov started his own dairy and butter processing plant.
After perestroika, things back on the farm suffered. The old collective tried to survive with a "team of people" managing it, but it soon plummeted toward bankruptcy under a load of debt. The collective asked him to come back. Bolobolov said yes, but he wouldn't deal with the "regime" of a lot of owners who couldn't accept "a certain person who was in charge."
The suffering years
In 1997, Alexander came back when the farm owners -- collective members -- agreed to his insistence on a change in its legal structure. He imposed new rules of discipline, and the employee ranks thinned out. It wasn't sudden, but it has been dramatic.
"It didn't hurt," Bolobolov says. "It wasn't a meeting. The people were used to an old regime of work. People were fired when they didn't get used to the rules of discipline. Some would break from it from time to time, come to work drunk."
Besides cutting employees from 1,200 to 70 (plus 30 in processing), he has instituted larger production machines.
"We had 170 (machinery) units, and now we have 15," Bolobolov says. "We had 85 harvesting units, and now just five units."
Of his 70 farm employees, about 75 percent deal with equipment, including 30 that are engaged only in the plant growing. The rest are doing support work.
Like Americans who farm in a different style, Bolobolov sees that he is making a future for his family. All of Bolobolov's family works in the company -- a son, a daughter, two nephews.
"Thirty-two family members," he says, through an interpreter. "My grandson, granddaughters will be working here, for sure."
Farming for a family
His daughter, born in 1978, works as a lawyer for the farm. Every farm has its own lawyers and accountants. This is a necessity, he says, as the farm pays "a lot of taxes" to the government, and the rules change from year to year. "You would have the same amount of people if you would have our legislation," Bolobolov says.
Denis Bolobolov, born in 1982, holds both engineering and economics degrees. After university, he worked as an economist on the farm and as a deputy manager for the financial issues. Today, he's in charge of the processing plant, putting in modern equipment. The bakery, for example, puts out 5,000 pieces a day, and he has plans to increase that to 20,000 pieces. There is a great variety of products, and the Bolobolovs are targeting toward the healthy food market that "has nothing bad for ingredients."
There are about 5 million people in the Krasnodar region. The city of Krasnodar has about 1 million people, underpinned by the region's agricultural strength. The city also makes a market for his farm's produce and baked products.
Alexander says one of his company's goals is to increase its processing to avoid "intermediaries" and sell directly to the consumers. The father and son estimate that they process about half of what they grow.
As far as production technologies, Alexander feels the farm has good yields that are comparable to Europe.
"The challenges are with the John Deere equipment price. It's the best quality equipment, and we would like to purchase even more, but the price is the challenge," Alexander says.
The Bolobolovs say they started studying the equipment options long before changing to John Deere. They considered not only the equipment but the service.
The best in Russia
"There is nothing better than ACT in Russia," Alexander says, flatly. "Quality. Service -- the team. The employees that ACT has, it's the team what is neaded by an agrarian company. Maybe Andrey Rybalkin knows our psychology of our people dealing with agriculture. The experts who work for agriculture, maybe Andrey taught them."
Alexander wishes aloud that ACT could be dealing not only with agricultural equipment, but also with processing, including poultry, bakery and barn production.
It is hard to predict the future, he says.
"Our market is very unpredictable," he says. "We don't have contracts with the government (which is) very bad. It's a challenge because we don't know what to expect."
He says the 2010 crop grain export embargo, imposed because of a drought. One of the big concerns Alexander has is that if government and policy has changed, the farm could face other changes.
"There is a feeling all of the time that such changes could come all of a sudden," Alexander says. "The ring means I'm in charge of, and responsible for this, and I think I'll pass it on to my son, if he'll be responsible for this business."