Russia Setting Out It's Grains Stall

Russia is proposing hosting a world grains summit in St Petersburg at the beginning of June 2009, a Kremlin official said on Friday.

The summit would focus on the problems facing consumers and producers of grains and food products, the source said, without giving further details.

Russian President Dmitry Medvedev pledged to take a leading role in tackling a looming global food shortage during a meeting in July between the leaders of the Group of Eight countries in Japan.

He said then that G8 leaders had backed a Russian initiative to convene a meeting of agricultural ministers, followed by a grains summit. Russia, the world's fifth-largest grain grower and exporter last year, expects to harvest its best crop in 15 years in 2008.

Russia clearly see some big bucks to be made out of agriculture. Only 13 percent of Russian land is used for agriculture, compared with a world average of 38 percent. The average wheat yield in Russia is less than half that in the EU. Although this years grain crop is the largest for 15 years, the country has yet to surpass Soviet-era production levels on a sustained basis.

According to United Nations' forecasts, global food consumption was expected to rise by 50 percent by 2030 and double by 2050, Russia is looking to account for a significant part of this increase.

Record prices for crops such as wheat and maize earlier this year sparked a surge of investment interest for farmland in Russia and other countries of the former Soviet Union, which have massive untapped potential.