Business Daily (Nairobi)
Dominique Patton
4 May 2008
China should set up farms abroad to produce extra food for its huge population, said agricultural officials recently.
Their backing for overseas agribusiness ventures may give further momentum to the wave of Chinese farmers already moving to Africa to boost their incomes.
Liu Jianjun, chairman of the China-Africa Baoding Business Council, an organisation that sets up negotiations with African governments for Chinese investments, told Business Daily recently that he would like to set up a farm in Kenya to grow wheat, corn and pineapples.
"Lots of land in Kenya is not farmed and yet it still receives food aid from the UN. At the same time, China faces a shortage of farmland." China, with its population of 1.3 billion, or 22 per cent of the world's people, only has an estimated seven per cent of the globe's arable land and about eight per cent of its water resources.
While yields of staple crops like rice have significantly improved in recent years, a fast-changing economy is putting great pressure on the country's precious land resources. Rising wealth is pushing up demand for meat, requiring higher grain output to feed livestock. Yet expanding urban areas are encroaching on valuable farmland.
Chinese businesses that venture abroad to explore agricultural resources will relieve some of the domestic shortages, said agriculture ministry officials, cited by the Beijing Morning Post. Chinese investment in overseas farms is not new. As early as 2006, a Chinese agribusiness the Suntime Group, invested in a rice growing venture in Cuba. It has significantly increased yields through new seeds and technology.
But surging food price inflation in recent months and global concerns about grain shortages has forced the issue of China's agricultural output up government priorities. Inflation in the first quarter hit a near 12-year high of 8 per cent.
Suntime, which also has a farming business in Mexico, is now looking at former Soviet Union countries for further expansion. Speaking at a recent conference on overseas investment, Xie Guoli, a trade promotion official from China's Ministry of Agriculture, said related government departments are making policies to encourage Chinese companies to invest in agricultural sectors outside China.
This could lead to more Chinese farms starting up in Africa too. China already has agricultural investments in numerous countries on the continent, including neighbouring Uganda. Many Chinese see Africa as a place of abundant land where modern farm technology is lacking.
Establishing farms on the continent allows them to benefit from a technological advantage as well as transferring new techniques to the local population.
Some Chinese experts point out that relying on foreign farms is not the best way for the country to solve its food supply problems. Boosting domestic farmers' incomes would help stimulate output at home.
Yet others say Chinese farmers are up against too many barriers. "China has a shortage of water, poor soil, small farms and really heavy pest pressure. It's not an easy place to grow things," says John Chapple, a former Chinese farm manager.
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