Friday, June 24, 2011

Chinese Government Claims It Isn't Speculating on African Farmland

Chinese investment in sub-Saharan Africa has been on a climb for the past few years. The lack of arable land in China is forcing the Chinese government to invest in alternate means of food security. Other investment locales include the Philippines, Cuba, and South America.

China Envoy: Govt Doesn't Advocate Companies Buying Africa Farmland
A top China envoy to Africa said the government doesn't advocate Chinese companies' acquisition of farmland in Africa and hasn't encouraged Chinese farmers to move to the continent.

While China has sought to strengthen ties with Africa in part to feed its need for resources, the comments by Liu Guijin, China's special envoy for African affairs, at a briefing to reporters on China-Africa relations, distance government policy from what the ambassador called a "sensitive" issue of an apparent rising presence of Chinese agricultural interests in developing foreign farmland for domestic food security purposes.

On whether Beijing was behind the migration of Chinese farmers from Hebei province to Africa, Liu acknowledged that some Chinese farmers had moved to some African nations in private capacity, but said the government wasn't helping them.

"The government knows that grabbing farmland is a very sensitive issue...and will not encourage it," he said.

Media reports have suggested that thousands of Hebei farmers have moved to more than a dozen African countries in recent years, setting up farming businesses in places such as Nigeria, Zambia, Sudan and Kenya.

Liu said some private Chinese companies may have their own projects in placing local personnel in Africa to develop agriculture, but Beijing's policy is aimed at sharing agricultural technology with Africa.

China is home to a fifth of the world's population but has only about 7% of global arable land, making food security a top government priority.

Chinese companies have made strides in similar ventures in Latin America and Southeast Asia.

Earlier this month, one of China's largest farming companies, Heilongjiang Beidahuang Nongken Group, signed a joint venture with Argentina's Cresud SA to buy land and farm soybeans.

Cresud is one of Argentina's top farming companies, controlling more than 1 million hectares of farmland.

Heilongjiang Beidahuang's chairman, Sui Fengfu, told Dow Jones Newswires in March that the company planned to buy 200,000 hectares of overseas farmland this year, and that Latin America was a key target.

The company is already farming 2 million hectares outside China.

Heilongjiang Beidahuang is also spending $1.5 billion to lease and develop farms on 300,000 hectares in Argentina's Rio Negro Province.

The company plans to grow wheat, corn, soybeans, fruits, vegetables and wine grapes for export to China over 5-10 years.

However, the Latin American deals are not land acquisition projects and appear to be crafted to avoid a backlash against foreign ownership of farmland in Argentina.

Argentina's President Cristina Fernandez has introduced legislation limiting land purchases by foreign individuals and companies to 1,000 hectares in rural areas.

Chinese companies are also playing an increasingly important role in developing farmland in the Philippines and Cuba, among other countries.

Source: CME News for Tomorrow

The Bottom Line: China's leaders are growing increasingly concerned about food security for its vast population. Foreign ventures in Africa, Latin America, and Southeast Asia have grown to the extent that they are provoking domestic backlash among native constituents.
blog comments powered by Disqus