Agriculture Investments - China Investing in South American Agriculture
The Chinese state intends to allocate more than $15 billion to domestic farmland investments in an attempt to sure up the world's largest population's food security, according to the Ministry of Land and Resources (MOLAR).
The aim of such a large scale agricultural investment is to improve technology, infrastructure and yield potential for over 4 million hectares of farmland, and almost 700,000 further hectares in major grain producing regions within the country.
If successful, this investment in the country's agricultural production will lead to an increase of around 10 million tonnes of grain in China's production capacity, according to MOLAR.
China is also making agriculture investments overseas, and Northeast China's Beidahuang Group, intends to invest in an agricultural joint venture with Argentina's Rio Negro Province.
After three years of negotiations, the state-owned farmland investment and development company, which is China's top grain producer, is planting out soybeans and other crops in the Patagonian province, paying very low rents in exchange for investment in the development of unused land, according to the Argentine government. In 2010, Beidahuang Group cultivated over 17.5 billion kgs of grains including 15 billion kgs of cereals. The company has stated that this volume could feed 75 million people per annum.
The Argentina agricultural investment project, based on over 300,000 hectares of farmland, will introduce advanced irrigation, power generation facilities and infrastructure investments in ports.
Wang Wei, assistant general manager of Beidahuang Group, stated that although Argentina has ample land of excellent quality and a great climate for agricultural production, the current level of technology employed is lacking and therefore investment in agricultural technology and infrastructure adds a huge amount of value, leading to large increases in productivity.
This synergy of technical expertise and agriculture investment capital from China, and land resources from Argentina is effectively a win-win for both sides. According to the agreement reached by the two sides, the Chinese Group provides irrigation and technical expertise, whilst the Argentinian government provides 234,500 hectares of farmland at a very low rent, almost free in fact. Argentina has also contributed a further 3,000 hectares of high yielding farmland as a gesture of goodwill.
The project is heralded as the primary agriculture investment made by a Chinese company into Argentina's agricultural production industry, and is likely to be the first of many as the world's biggest population seek the capacity to feed its 1.3 billion citizens.
Argentina's primary crop is Soy, and China imports the majority of Argentina's crop annually. A further agricultural investment in Argentina by a Chinese company is the recent announcement by Heilongjiang Beidahuang Group who have entered into a joint venture with Cresud SA to invest in farmland and cultivate soybeans. Cresud has over 1 million hectares of farmland, cultivating grains, livestock and milk.
Download the agriculture investment and forestry investment reports at: http://www.dgcassetmanagement.com
David Garner is Partner at boutique alternative investment boutique DGC Asset Management Limited
The aim of such a large scale agricultural investment is to improve technology, infrastructure and yield potential for over 4 million hectares of farmland, and almost 700,000 further hectares in major grain producing regions within the country.
If successful, this investment in the country's agricultural production will lead to an increase of around 10 million tonnes of grain in China's production capacity, according to MOLAR.
China is also making agriculture investments overseas, and Northeast China's Beidahuang Group, intends to invest in an agricultural joint venture with Argentina's Rio Negro Province.
After three years of negotiations, the state-owned farmland investment and development company, which is China's top grain producer, is planting out soybeans and other crops in the Patagonian province, paying very low rents in exchange for investment in the development of unused land, according to the Argentine government. In 2010, Beidahuang Group cultivated over 17.5 billion kgs of grains including 15 billion kgs of cereals. The company has stated that this volume could feed 75 million people per annum.
The Argentina agricultural investment project, based on over 300,000 hectares of farmland, will introduce advanced irrigation, power generation facilities and infrastructure investments in ports.
Wang Wei, assistant general manager of Beidahuang Group, stated that although Argentina has ample land of excellent quality and a great climate for agricultural production, the current level of technology employed is lacking and therefore investment in agricultural technology and infrastructure adds a huge amount of value, leading to large increases in productivity.
This synergy of technical expertise and agriculture investment capital from China, and land resources from Argentina is effectively a win-win for both sides. According to the agreement reached by the two sides, the Chinese Group provides irrigation and technical expertise, whilst the Argentinian government provides 234,500 hectares of farmland at a very low rent, almost free in fact. Argentina has also contributed a further 3,000 hectares of high yielding farmland as a gesture of goodwill.
The project is heralded as the primary agriculture investment made by a Chinese company into Argentina's agricultural production industry, and is likely to be the first of many as the world's biggest population seek the capacity to feed its 1.3 billion citizens.
Argentina's primary crop is Soy, and China imports the majority of Argentina's crop annually. A further agricultural investment in Argentina by a Chinese company is the recent announcement by Heilongjiang Beidahuang Group who have entered into a joint venture with Cresud SA to invest in farmland and cultivate soybeans. Cresud has over 1 million hectares of farmland, cultivating grains, livestock and milk.
Download the agriculture investment and forestry investment reports at: http://www.dgcassetmanagement.com
David Garner is Partner at boutique alternative investment boutique DGC Asset Management Limited
0 Response to "Agriculture Investments - China Investing in South American Agriculture"
Post a Comment