Russia is usually comprised of a number of farm lots and can be classified as state and municipal or private property. Acquisition of lots of agricultural land is effected through transactions with parties, who in accordance with current Russian legislation have the property right, including:

• agricultural land subject to state or municipal property rights
• agricultural land subject to ownership of legal entities and
• agricultural land subject to ownership, in group or individually, of natural persons.

With the reorganization of the Russian Kolkhozes, the former employees obtained a part of the agricultural land in common. The Russian legislation offers a number of alternative ways to perform transactions regarding acquisition of ownership rights to the plots mentioned. All of the stipulated ways of acquisition of ownership rights to agricultural lands are complicated as well as time-consuming and associated with certain risks.

Black Earth Farming’s land acquisition approach has mainly been directed towards acquisition of agricultural land owned by a group of natural persons. The rationale behind using this approach is that acquisition of agricultural land owned by states bodies, local authorities or legal entities require substantial financial expenditures, administrative limitations from state authorities, and/or the areas of available land are limited. Much of the land that BEF gains control over has been laying fallow for many years, which the Company has brought back into production. As of 31 December 2010 Black Earth Farming controlled about 328,000 hectares of land, of which 250,000 hectares are in full ownership.