Agriculture Investments - China Investing in South American Agriculture

The Chinese state intends to allocate extra than $15 billion to domestic farmland investments in an attempt to positive up the world's biggest population's food security, according to the Ministry of Land and Resources (MOLAR).

The aim of such a big scale agricultural investment is to improve technologies, infrastructure and yield potential for over 4 million hectares of farmland, and almost 700,000 additional hectares in main grain generating regions inside the country.

If prosperous, this investment in the country's agricultural production will lead to an boost of around ten 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.

Following 3 years of negotiations, the state-owned farmland investment and development business, which is China's leading grain producer, is planting out soybeans and other crops in the Patagonian province, paying highly 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 which includes 15 billion kgs of cereals. The business has stated that this volume could feed 75 million consumers per annum.

The Argentina agricultural investment project, based on over 300,000 hectares of farmland, will introduce advanced irrigation, energy generation facilities and infrastructure investments in ports.

Wang Wei, assistant general manager of Beidahuang Group, stated that though Argentina has ample land of remarkable good quality and a great climate for agricultural production, the present level of technology employed is lacking and therefore investment in agricultural technology and infrastructure adds a big quantity of worth, top to massive increases in productivity.

This synergy of technical expertise and capital from China, and land resources from Argentina is successfully 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 delivers 234,500 hectares of farmland at a quite low rent, almost absolutely free in truth. Argentina has also contributed a further three,000 hectares of high yielding farmland as a gesture of goodwill.

The project is heralded as the main agriculture investment produced by a Chinese business into Argentina's agricultural production sector, and is most likely to be the 1st of a number of as the world's greatest 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 additional agricultural investment in Argentina by a Chinese enterprise is the latest 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.