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UN: Eastern Europe Holds Huge Agricultural Potential; Grain Production Seen Up Sharply

00:00AM Sep 11, 2008 Editors

Despite Russia and Ukraine producing bumper harvests of cereal crops this year due to high food prices, the region still possesses significant untapped agricultural potential, a senior United Nations (UN) food agency official said Thursday at the opening of a two-day meeting in Paris on agricultural developments in the region.

Rising food prices have led to rapid expansion of land used for agriculture in the two countries with an increase of 5.9 million acres to 83.5 million acres of farmland planted to wheat, according to the UN Food and Agriculture Organization (FAO).

In Russia alone, harvested area for wheat, course grains and rice is forecast at nearly 113.7 million acres for the 2008 harvest, which is up 6.4 million acres from 2007.

"This clearly shows that higher prices can be an opportunity for the farming community," Charles Riemenschneider, Director of FAO's Investment Centre, said in a UN press release.

Earlier this year FAO and the European Bank of Reconstruction and Development (EBRD) stated that as much as 32.1 million acres of unused farmland lay idle in Eastern Europe and the Commonwealth of Independent States (CIS) – 12 of the 15 former Soviet republics.

According to FAO figures, wheat production in the European CIS countries is set to rise to more than 73 million metric tons in 2008 – up 13 percent from last year.

"In March we discussed opportunities for enhancing agricultural output, and we can see from these figures that benefits are already materializing that could make a real difference on world markets," Riemenschneider said in the press release.

"Both countries have significant exportable cereal surpluses, but more long-term investment is needed to ensure that this supply response is sustainable," he said.