GALKINSKOYE, Sverdlovsk region — The village of Galkinskoye is no different from any of the other towns and villages around the Urals city of Yekaterinburg, with its old wooden houses, rickety fences and decaying former farm buildings. However, in 2008, Vasily Melnichenko came up with the idea to transform it into an exemplary state farm.
«Melnichenko? Vasily Sanich? Yes, everybody here knows who he is. There’s his shack,» said a grumpy old man, waving his hand in the direction of a large white building.
The building is the Village Center for Community Initiatives, and doubles as Melnichenko’s office in Galkinskoye.
The center is located in a former school, but the half-wooden, half-stone structure seems more like a hut. On the entrance table are neatly stacked magazines — issues of Kommersant Vlast, Ogonyok and Expert from between 2008 and 2011.
Previously, the building housed a human rights center. After Cossacks, without encountering any resistance from the local authorities, burned down Melnichenko’s thriving Dawn farm, the businessman decided to open a help center for rural entrepreneurs.
Over the course of several years, the center has seen visits from a U.S. consul, the mayor of Liverpool, England, and human rights activists Lyudmila Alexeyeva and Lev Ponomaryov. One of the rooms houses the editorial staff of the newspaper Territory of the People’s Power, which Melnichenko publishes. On the table is a pile of newspapers, on the wall — a photo of murdered journalist Anna Politkovskaya.
Opposite the center is the village administration and the Pochta Rossii building, with its bright CyberPost sign. Next door is a crumbling brick church, which has not functioned since 1938.
«Who would restore the church, and for whom?» Melnichenko said dismissively. «True believers are not those who attend church on a Sunday and then sin the rest of the week. Now there aren’t any, and the church only needs them for their money.»
The value of rabbit skins
Since Melnichenko became the head of the Galkinskoye agricultural production cooperative, the initiative center has housed the local business center, but also a workshop for processing rabbit skins. The rabbit farm is now Melnichenko’s main enterprise and brings in some income.
The farm is located only a couple of kilometers from the village center, and we are accompanied on our return journey by Melnichenko’s assistant, Mikhail. He comes from the nearest town, Kamyshlov, and has already known Melnichenko for 20 years. In the car he listens to musician Vasya Oblomov, quotes Nietzsche and discusses religion.
When asked how he found himself in Galkinskoye, Mikhail replied that he had realized it was «time to change something.» He dabbled in business, but things went badly. In order to repay his creditors and settle his workers’ salaries, he had to pawn his personal property.
«This car is the last thing left,» he said.
On the farm, Melnichenko has more than a thousand rabbits, from which fur coats and rugs are sewn in the village and the meat sold to the Ural Grill. This roadside village cafe, which was also built by Melnichenko, surpasses not only local establishments, but also many in the Moscow region, with the quality and variety of its food. The prices are low even by local standards — a formidable portion of roast rabbit, for example, costs just 60 rubles ($2).
Next to the cafe, there is a small hotel that has mainly become a stop for truckers. It has not yet recouped the 4 million rubles ($129,000) invested in its construction, but the cafe is always full of customers.
Taking the blame
In addition to its post office and village administration, Galkinskoye also has a school, a kindergarten, a health clinic, three stores and a cultural center. Out of the village’s population of approximately 800, the farm employs around 100 people.
Although Melnichenko is an entrepreneur and has no formal relationship with the local administration, some local residents are still convinced he is the head of the village. He is known here as «the chairman» and is criticized for all the things that the actual head of the village does.
«We voted for Melnichenko with both hands, but just as there used to be work in the village, there is none [now],» said Alevtina, whose house is opposite the initiative center. Alevtina was born in Galkinskoye and used to work as a dairymaid until the dairy farm was closed. Now both she and her son work in the city.
It is a 15-minute bus ride from Galkinskoye to Kamyshlov, and the majority of the villagers, especially the young, find work there.
«If someone settles there, it’s regarded as lucky,» complained Oleg Kovalenko, an investor in one of Melnichenko’s projects. «Nothing here entices anyone.»
Salvation in silica
The Moscow-based project management company Roel decided to invest in the construction of a diatomite silica processing plant, which will produce heat-insulating materials for use in construction.
According to Melnichenko, no one produces them in Russia. The only manufacturers and material suppliers are Americans, but the factory that he intends to build will drive down the market prices.
The building permit has already been granted, and all that remains is to decide on a suitable location. Now Melnichenko dedicates most of his time to the factory, and has even had to open an office in Moscow. The development promises to be profitable, but the issue of how to find workers remains, as locals are reluctant to agree to take on such work.
«Recently we reached an agreement with someone who then just disappeared for three days,» Kovalenko sighed. «What is the point in investing money in this kind of employee?»
Drinking to excess is really the only kind of leisure activity in the village. During the 15 minutes that we spoke to a salesperson in the Galkinskoye general store, there were only two customers, both of whom had come to buy vodka, and one was only able to take a half-liter on credit.
«Melnichenko has been chairman for a number of years now, but there has been no improvement,» said an elderly woman near the store.
«Well, he didn’t build the pig farm here, which would have polluted the river and choked us all,» the salesperson replied. «So tell him thank you.»
«I’ve already grown accustomed to the fact that I must build roads and housing,» Melnichenko chuckled. «Recently they came to me and said, ‘Why are you not drawing our water for us?’ At least I’m not asked to replace the houses at night.»
Rising costs, delayed salaries
The main part of seasonal farm work is the sowing and harvesting of vegetables. On average last autumn, the Galkinskoye workers received 20,000 rubles after the harvest. Winter is a dead season in Galkinskoye, when there is only enough work on the farm for 20, at most. Full-year jobs are held only by the staff in the cafe and hotel, by several people on the rabbit farm and a furniture shop, and by mechanics who work on the tractors.
Melnichenko does not deny delays in salaries, which locals complain about: «Given the fact that we only grew the harvest in 2012, we cannot pay the salaries. Even I am not paid through production but by earning on the side.» He moonlights as a consultant, giving advice to officials on agricultural issues.
According to Melnichenko, the main reason for the salary crisis is the rising cost of fuel and electricity.
«Our current production levels do not cover our expenses, and I think we’ll be suffering for another year,» he said. «But when we no longer supply vegetables to the Federal Prison Service, we could face a real catastrophe.»
Vegetable production is the most important and most profitable part of the farm’s work. Previously, Melnichenko supplied potatoes, beets and carrots to the prison service, but the order was recently transferred to a supplier from Moscow. As a result, Melnichenko has had to lease part of the land to private owners who have promised to share part of the harvest with the farm.
In order for new jobs to emerge, the village needs money to build new farms and industrial enterprises. However, Melnichenko believes that the prospects of receiving this money in credit are slim.
«Judging by what is currently happening in the country, this will depend least of all on businessmen, residents and local authorities,» Melnichenko said.
Galkinskoye’s only hope for revival rests on the «New Village — New Civilization» project, which Melnichenko has been attempting to bring to fruition in the last six months.
The project has a business plan. New Village won a national competition for rural development projects back in 2008, and is now being handled by former Finance Minister Alexei Kudrin’s Committee of Civil Initiatives, but so far without any tangible results.
The end goal of New Village boils down to the notion of the state acting as a guarantor for loans received by farmers. According to Melnichenko, if the project is implemented, Galkinskoye’s population will grow to 6,000 people through attracting new residents and young families from other regions. The enterprise’s expected annual profit is up to 100 million rubles ($3.2 million).
The plans closest to completion are those to build a sheep farm and a fodder plant, all of which, according to Melnichenko, were scrapped under the farm’s previous management, «so that there was no trace of what had been sold and who had received the money.» A 13 million-ruble debt had been left by Melnichenko’s predecessors, and was only settled in January.
Now, as before, Melnichenko’s enterprise is indebted to the bank for 1 million rubles for the purchasing of equipment, and is in arrears of 600,000 rubles in workers’ salaries.
«If the project does not go ahead, there will be no other sources,» he said. «I can only make arrangements like a typical businessman. In the end, I have it written in a charter that my goal was to make a profit. However, for me this is the worst option.»
From the bottom up
According to Melnichenko, his ultimate aim is not simply profit but the creation of local self-government. Its creation is an indispensable condition for the success of New Village.
«Not one single store should ever be built without the consent and knowledge of the population,» he said. «People should build Russia from the bottom up, but instead we are all at the mercy of the federal government.»
Melnichenko has a solution for the creation of self-government nationwide, which he believes is simple — to hold a referendum, and if its results are not acknowledged, then to take to the streets.
«We are all patriots now. If you take to the streets with 10 million patriots, no one will refuse a referendum or local self-government,» he said. «But the calls of a farmer are not having an effect on the villagers. They have heard little about self-government, and they poorly understand what it is. All hope, as always, is in Moscow.»
«You went to interview Melnichenko? He’s a known crook,» one local resident said to us as we awaited our taxi back to Yekaterinburg. «He goes to Moscow, but to no effect.»
«And what effect should there be from Moscow?»
«I don’t know — work, a normal salary. But he’s making a fuss.»
«So, maybe, he’s making a fuss for a reason?»
«Maybe it’s not for nothing, or maybe he’ll be put in jail. It’s all the same — for us, nothing will change.»