Agricultural contracts
Our aim is to create and maintain optimum conditions for cooperation with local agricultural producers by entering into contracts for the supply of future harvest with fixed volumes and the possibility of advance payment. This approach allows local producers to ensure a full workload during the season, guarantee product sales, and forecast revenues.
We cooperate with a variety of farms, with the smallest partner having 75 hectares of land and the largest one – 50,000 hectares. We combine the production and logistics capabilities of our partners, and they do not need to be able to produce everything – to enter into a contract with us, it is enough to be an expert in one area.
Benefits of agricultural contracts for local producers
- Guaranteed sales volumes at an agreed price
- Possibility of long-term planning
- Advance payments for future harvest
- Product acceptance at the supplier’s warehouse to avoid product returns
- Agricultural support from Magnit’s experts
- Self-pickup from supplier’s warehouse
Our agricultural support unit employs specialists with professional expertise and a wealth of experience that has built up over the years of work within the Magnit team. We have an extensive knowledge base, as we work with partners from different regions with different climatic conditions and soils. We carry out compulsory audits of local farmers: our experts constantly monitor how crops develop in the areas allocated for our agricultural contracts.
We will continue to enhance our cooperation with local agricultural producers in 2023. We plan to create an electronic platform to improve and simplify the supply process, organise centralised procurement of seeds, fertilisers, crop protection products and packaging, and invest in expanding farm production in the regions.
Success stories from our partners
Samara region
Tsirulev Farm
Since the beginning of its cooperation with Magnit under the agricultural contract, this farm has become one of the largest producers of vegetables in the Samara region and Middle Volga. In the 2010s, the farm had a focus on cereals, while vegetables were grown for its own needs, but today it supplies over 15 vegetable SKUs to the Group, including washed products.
Tyumen region
Druzhba Farm
Our partner in the Tyumen region has carried out a major renovation of its vegetable packing line, built a new potato washing facility with two lines, upgraded its storage facilities, purchased new vehicles for product transportation and a self-propelled potato harvester. Druzhba has an ambition to expand and is negotiating the purchase of another farm.
Rostov region
Doroshenko Farm
The farm is successful and procures new equipment: two onion packing lines were purchased and installed, new storage facilities were built with a total capacity of 13,000 tonnes, a modern preparation area was set up, and new agricultural machinery was procured. Over the years of our cooperation, the area planted with onions has doubled. The farm is now increasing its range of vegetables for delivery to the Magnit chain.
Moscow region
Bunyatino Farm
Bunyatino is the leading enterprise of Dmitrovskiye Ovoshchi Group and Magnit is the key buyer of its vegetables. The company has its own production and logistics system, operates more than 250 machines, and delivers 400 tonnes of products per day.
Belgorod region
Veydelevskoye LLC
Since the start of its cooperation with Magnit, the Belgorod agricultural company has upgraded its production facilities (sorting and packaging lines and refrigeration equipment). In February 2023, it launched a production facility for direct-pressed apple juice with a capacity of 500 litres per hour.