* * *
China is home to 22 percent of the world’s population, but
possesses around 7 percent of its arable land – 334.6 million hectares.
However, in recent years the county’s arable land has been shrinking as a
result of serious environmental damage such as soil erosion, deforestation and
pollution of rivers and lakes. In November Chinese officials reported that more
than 40 percent of China’s arable land is suffering from degradation.
The combination of rising food demand and reduced arable
land makes it difficult for China to feed itself in the not so distant future.
In the past decade China has experienced hikes in food prices and shortages of
certain products.
China has no choice but to turn to overseas farming. In 2013
China imported 4 percent of the world’s grain and this figure is likely to rise
in coming years.
Several Chinese government officials have also talked about
the overseas option as a complement to strengthening domestic production. In
2010, Chinese Minister for Agriculture Han Changfu said, “The time is ripe for
the country’s agricultural companies to embark on a go outward strategy.”
In recent years Chinese investment in overseas agriculture
and land leases has steadily increased. Chinese companies began investing in
neighboring Laos and Cambodia farmland in the early 2000s and slowly ventured
further afield. Chinese-owned or jointly owned farms are in several African
countries including Mozambique and Ethiopia.
In Mozambique, a Hubei-based company has invested $250
million in a rice farm in Gaza province. In November 2013 the country’s
state-owned newspaper Notícias cited Raimundo Matule, a director at the
ministry of agriculture, reporting that several Chinese conglomerates were
expected to invest up to $2.5 billion in the country’s agricultural sector. In
Angola Chinese state-owned giant CITIC pledged to invest $5 billion in
agriculture in addition to its current lease of 20,000 hectares of land in the
former Portuguese colony.
Mozambique and Angola in particular are large countries with
immense tracks of fertile land and a small population. Angola has a land area
of 1.24 million square kilometers and a population of 16 million.
China’s ongoing tensions with its Southeast Asian neighbors
make other parts of the world even more attractive, and Africa could emerge as
a major provider of agricultural products to China in coming years.
Chinese business interests have also leased tracts of land
in Brazil, Peru Argentina and Mexico. China is also reported to be acquiring
land in the sparsely populated Russian Far East just across the border from
heavily populated northern China. Chinese companies are reported to have leased
1 million hectares of land through Russia. China’s most ambitious investment in
the sector is a land lease deal with Ukraine for 3 million hectares to produce
grain and raise pigs. In 2010 Chinese companies were reported to have requested
the lease of 1 million hectares from the Kazak government to plant soybeans and
wheat. In 2010 China was believed to have leased or bought over 2 million
hectares of land abroad. In 2011 China’s largest agriculture group,
Heilongjiang Beidahuang Nongken, announced that it was investing $1.5 billion
to develop 300,000 hectares of land in Rio Negro province in Argentina .
However, the overseas option China is pursuing carries risks
as well as promises of reward. As shown by recent events in the Ukraine, once a
relatively stable part of the world, nothing is guaranteed. Land is a sensitive
issue that touches upon our most primordial fears. In Kazakhstan there is
widespread concern, sometimes bordering on paranoia, that China is grabbing the
country’s vast and sparsely populated land by bribing local officials. In
Brazil several officials including former Minister of Agriculture Delfin Netto
have accused China of carrying out a stealth land grab.
In Mozambique a Chinese land lease in the Limpopo valley is
reported to have displaced 80,000 people, while in Cameron tribal chiefs and
local NGOs have protested against land acquisitions by Chinese companies. In
Angola there have been allegations of physical assault against African farm
labors by their Chinese managers, while such incidents have been isolated
cases. Angola has bitter memories of Portugal’s brutal plantation system in
which the chicote, or whip, was widely used.
China is not alone in its interest for African farmland.
Brazil, Japan, South Korea and several Gulf States have leased large tracks of
land in Africa. Brazil seems to have been far more successful than China, at
least in Mozambique, having acquired 500,000 hectares of land in the country’s
north. Brazilian land deals have been far less controversial than Chinese ones
and elicited less suspicion. Brazilian companies are reported to be producing
soybeans in Mozambique, and for several years, Brazil has been main supplier of
this product to China. It seems that the Brazilians have stolen a march on the
Chinese.
Despite these risks Chinese investment in overseas
agriculture is likely to continue. China has little choice but to turn overseas
to sustain its growing food needs.
However, one must be cautious not to see Chinese
acquisitions of overseas farms as a mere land grab. The issue is far more
complex. China has invested hundreds of millions of dollars in agriculture
research centers throughout Africa that have greatly increase rice and other
crops production and alleviated food shortages. Hundreds of Chinese agriculture
scientists are working in Africa and elsewhere to improve efficiency. While
Africa and other parts of the world are supplying China with products such as
grain, soybeans and meat. China may also contribute to consolidating food
security in Africa and other regions with its investment and expertise. China’s
long-term strategy may be to boost Africa’s capability to produce agriculture
surplus, both addressing the continent’s chronic food shortages and China's
demand for imported food.
Chinese investment in overseas agriculture can bring
significant benefits provided such investments are done in an open and
transparent way and with respect for local communities. Indeed, certain
countries – particularly Angola and Zimbabwe, to mention a few – are keen on
such investments. China and the host countries for such investments can benefit
tremendously – if both sides have the imagination to build mutually beneficial
partnerships.
* * *
Lora Horta, Chinese
Agriculture Goes Global, Yale Global, December 16, 2014
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