December 24, 2013 / 1:50 PM / 4 years ago

Russia's Far East considers tax relief for Asian farmers-report

MOSCOW, Dec 24 (Reuters) - Russia may create special economic zones with tax relief in its Far Eastern regions to boost investments from Asian farmers into the agriculture sector, Vedomosti newspaper reported on Tuesday, citing Russian Deputy Economy minister Oleg Savelyev.

Russia's Far East Federal District, a region two-thirds the size of the United States, has wide swathes of unfarmed fertile land, but it is located several thousand kilometres away from Russian grain export terminals on the Black Sea.

"The creation of special economic zones is possible in the Far East," Savelyev told Vedomosti. "We have been holding discussions with Japanese colleagues for several years."

These investors have already tried to sow soybeans and buckwheat in Russia's Amur region, he added, but did not elaborate. Savelyev did not answer a call from Reuters.

Russian legislation provides several options to foreigners to access agricultural lands, the most popular of which is long-term leasing, Dmitry Rylko, the head of Russia's Institute for Agricultural Market Studies (IKAR), told Reuters.

About 2.7 million hectares of Russia's 120-million hectares agricultural land is controlled by foreign companies now, of which 1 million hectares is controlled by firms from Kazakhstan and Ukraine, according to his estimate.

Chinese firms already lease or control at least 600,000 hectares of land in the Far East. (Reporting by Polina Devitt, editing by William Hardy)

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