. Last Updated: 07/27/2016

British Scheme Makes Farmers Out of Miners

For MTThe British DFID has earmarked ?75,000 ($105,000) for micro-credit loans to help unemployed miners start small-scale farms.
Unemployed miners in the Donbass region have swapped pickaxes for plows this summer as part of a British-organized scheme to retrain them as farmers.

Organizers say some 400 miners, a small percentage of those made jobless by the collapse of the regional coal industry over the last decade, will learn agricultural skills, create new businesses and ease the rising social tensions in the hardest-hit areas.

The ?500,000 ($725,870) scheme is financed by the British Department for International Development and is taking place in four pilot settlements in the Belaya Kalitva district near Rostov-on-Don in southern Russia.

Coal Country

The Donbass coal fields straddle the Russian-Ukrainian border and were once of immense economic and strategic importance.

The area was bitterly fought over during the Civil War following the Revolution of 1917.

The mines later fed the enormous energy demands of the great Stalinist industrialization programs that sought to modernize the mainly peasant economy in a single generation.

Following the collapse of state support for industry in the early 1990s, however, the Russian coal industry has struggled to compete on the free market, facing stiff competition abroad and falling prices and falling demand for coal at home.

Many mines have been forced to shut down, while others have slashed workers in a bid to save money.

As plants close, the unemployed have struggled to find new work and cope with the dramatic transformation in their lives.

When the Mines Close

The Belaya Kalitva district is a typical example. Coal mining has been the bedrock of the local economy for as long as anyone here can remember. Yet five out of six of the mines have shut down since 1995. The last is expected to close in 2003.

"It used to be a profession passed from father to son, and it was an honor to be a miner," said Nikolai Antoshin, deputy head of the Belaya Kalitva district administration. "The miners were left totally unprepared by the collapse of the industry."

Although official district unemployment rates are just 1.5 percent this year, concealed unemployment in the mining settlements runs at between 60 percent and 65 percent, according to administration officials.

Today, 70 percent of those made redundant in the sector have still not found permanent employment. Some have become embittered and blame the government for failing to protect the industry.

"The levels of crime, alcohol abuse and drug abuse are all quite high in the mining settlements now," Antoshin said.

Other miners have been forced to leave their families and the region to work as construction laborers in towns as far apart as Sochi, Novorossiisk and Yakutia, where they can earn between 3,000 rubles to 6,000 rubles ($103 to $206) per month.

For those who have stayed, jobs are few and far between and just getting by is difficult.

The monthly unemployment benefit for miners was just 550 rubles last year.

Many now simply work their own private lots of land on a subsistence basis.

Pickax to Plow

Organizers said they are confident that the miners in the program will successfully manage the change of career and become competent farmers.

The project will tap into the existing agricultural knowledge of a community already used to cultivating its own food and keeping livestock in order to make ends meet.

"We are not helicoptering in new ideas and simply starting farming here from scratch," said David Burton, project manger and deputy head of the Moscow office of Adas International, the company contracted to manage the program.

"Agriculture is not completely new to them," confirmed Yelena Glebovskaya, the Adas project coordinator. "This is a rural area and most of them are used to keeping private plots where they would typically grow potatoes and vegetables and keep a couple of cows."

Training courses started in the middle of August.

Business and agricultural consultants have been working with miners since June to provide the first steps of advice to the would-be farmers.

DFID has earmarked ?75,000 ($105,000) for micro-credit loans to help the farmers get their businesses off the ground and purchase basic materials such as chemicals, fertilizers, seeds and breeding livestock.

The local administration signed an agreement in August to match the funding pound for pound.

The project's credit committee is due to issue the first loans in September on the basis of "good commercial practice" and sound business plans. These will be created with the support of professional advice from lawyers and business advisers, according to Burton.

Micro-credit money that is repaid will then be recycled and used once again to help others establish new businesses.

"These are not subsidies," he stressed. "There is a history in agricultural Russia of borrowing money and not paying it back and it eventually being written off by the state. We want to get over that and encourage people to borrow responsibly."

The administration is also to offer the miners land at commercial but favorable rental terms.

Precise legal mechanisms must still be developed to allocate plots, although Burton said the typical farm would be about 100 hectares in size and may be developed by just one family or on a collective basis between a number of miners.

The training program is open to any unemployed miner from the pilot settlements with no restriction on age.

Although Adas International is the agency responsible for supervising the project, implementation is the responsibility of two organizations in the region, the YugAgroFund and the Russian British Consulting Center.

There is a sister project in Ukraine's Donetsk region, also being run with DFID funds but implemented by a different company.

Overall, these two projects fall within a wider group of DFID-funded projects underway in Russia, Georgia and Ukraine known collectively as the Sustainable Rural Livelihood Program.

A First Step

Burton admits that the program's immediate impact on the region will be limited.

"In terms of how many people this project will directly help, it will not be that many and the cost per person is actually quite a lot," he said.

"But what is important is that we are developing models which we hope will be replicated by other administrations at a much, much lower cost in the future."

Organizers expect that the majority of the 400 trainees will eventually establish small but profitable businesses.

A ready local market already exists for the producers to fill. At present, the region cannot grow enough to feed itself and has to import fresh goods from elsewhere.

At the end of this project, the continued participation of Adas would be limited to promoting the projects across Russia through information campaigns, literature and project training.

The Belaya Kalitva administration has initiated successful credit programs and career courses before, but funds are scarce.

In 1998, for example, just 765 people were retrained, less than 10 percent of the those made redundant from the mines that year.

"This project is really necessary for the region," Antoshin said. "It is not the best time for the coal industry in Russia, and we expect the project to reduce the social tensions, create jobs and increase the income of the miners."