Agriculture / Animal Feeding / Asia / Brazil / China / Latin America / Trade / USA

China’s insatiable appetite for Brazil’s soybeans is making the latter country rich–and nervous

Plantando no Paraná

Planting soy in the state of Paraná, Brazil (photograph via Flickr by Dami Izolan).

Daniel Kfouri reports in the New York Times that Brazil’s ‘$7 billion agreement signed last month—to produce six million tons of soybeans a year—is one of several struck in recent weeks as China hurries to shore up its food security and offset its growing reliance on crops from the United States by pursuing vast tracts of Latin America’s agricultural heartland.

‘Even as Brazil, Argentina and other nations move to impose limits on farmland purchases by foreigners, the Chinese are seeking to more directly control production themselves, taking their nation’s fervor for agricultural self-sufficiency overseas. . . .

‘While many welcome the investments, the aggressive push comes as Brazilian officials have begun questioning the “strategic partnership” with China encouraged by former President Luiz Inácio Lula da Silva. The Chinese have become so important to Brazil’s economy that it cannot do without them—and that is precisely what is making Brazil increasingly uneasy. . . .

‘China’s moves to buy land have made officials nervous. Last August, Luís Inácio Adams, Brazil’s attorney general, reinterpreted a 1971 law, making it significantly harder for foreigners to buy land in Brazil. Argentina’s president, Cristina Fernández de Kirchner, followed suit last month, sending a law to Congress limiting the size and concentration of rural land foreigners could own.

‘A World Bank study last year said that volatile food prices had brought a “rising tide” of large-scale farmland purchases in developing nations, and that China was among a small group of countries making most of the purchases. . . .

‘[A]s more of its people eat meat, China is expected to increase its soybean imports, mostly for animal feed, by more than 50 percent by 2020, according to the United States Department of Agriculture. Last month, Chongqing Grains signed a $2.5 billion agreement to produce soybeans in the Brazilian state of Bahia. Last October, a Chinese group agreed to develop about 500,000 acres of farmland in Río Negro Province in Argentina.

‘In both cases, Chinese officials proposed buying large tracts of land before local officials steered them toward production agreements. . . .

‘In Goiás State, nearly 70 percent of the soy grown went to the Chinese last year, and the Chinese are seeking to use about 20 million acres of pastureland that has not been cultivated for decades. . . .

‘Farmers here say they share Chinese officials’ goal of breaking the stranglehold of international trading companies like Cargill and Archer Daniels Midland. . . .’

Read the whole article at the New York Times: China’s interest in farmland makes Brazil uneasy, 26 May 2011.

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