Global Tide of Recreation: The World's Overseas Crazy "Enclosure"

Global Tide of Recreation: The World's Overseas Crazy "Enclosure"
february 20, 2014 Source: Financial Times
guide: After another intraday high for basic commodities such as wheat, a sigh from a young Chicago trader leaked the sky: "Basic commodities are now at their peak, but this won't last forever."
why? It's better to buy food than land. Capital is moving into the upper reaches of the underlying commodity-farmland. The Italian journalist StefanoLiberti revealed in the book "LandGrabbing" ("Land Grabbing") that the trends of various countries in the agricultural field are brewing a new round of global land grabbing wars after the colonial era.
 
Like the cannons of the colonial era, capital is equally powerful: in Ethiopia's Great Rift Valley, Africa's most avant-garde industrial farms have taken shape; Latin America, Argentina, Paraguay, etc., the capital monopoly of the "United Republic of Soybeans" roared everywhere; Ukraine, this already formed European "granary", still has 40% of potential farmland, luring capital to become farmers.
This is the overseas land. The resurgence of land enthusiasm, according to Sean Donnan, world trade editor of the Financial Times, is due to "after the food price crisis of 2007-2008, capital spied both the vulnerability of food security and the opportunity of basic commodities, so governments and enterprises bought agricultural land in large quantities around the world."
"Mastering land means mastering resources and prices, and then mastering the right to speak." Cui Xinsheng, chief researcher of CCVI China Value Index, said in an interview with a reporter from the International Finance News. But the complexity of the problem is that, in terms of China's national conditions, in the new round of global agricultural land layout, will China provide capital or land?
Who is in the field
the traditional countries of the field are generally resource-poor countries, such as Japan, or the traditional capital exporting countries, such as the United States. After 2008, some new countries began to participate in this game, such as the Middle East countries, India
where are the fields? Ma Wenfeng, an agricultural analyst at Oriental Iger, told the International Finance News that in recent years, countries and regions such as Africa, South America, Eastern Europe, Canada and Russia are gradually becoming coveted by global capital predators and resource-poor countries.
China's neighbor Japan is the "originator" of overseas farms ". Data show that as early as 1899, a company officially funded by Japan sent farm workers to Peru, which was the beginning of Japan's organized "enclosure" overseas in Latin America.
In April 2009, the Japanese government took the lead in holding an overseas agricultural investment promotion conference, and subsequently promulgated the "Guidelines for Promoting Overseas Agricultural Investment to Ensure Food Security", encouraging Japanese companies to increase overseas agricultural investment, and investment covers production, acquisition, and circulation., Export and other fields. For example, at the end of 2009, Japan's Mitsui Company purchased 100000 hectares of farmland in Brazil to grow soybeans. "The area of arable land involved in this agreement alone is equivalent to 2% of the arable farmland in Japan".
"In recent years, Japanese companies have rented and purchased a large amount of farmland in Brazil, Africa, and Central Asia to grow organic crops. Japan now has three times more overseas farmland than domestic farmland (public data is 12 million hectares)." According to a report published by the NGO GRAIN.
In addition to Japan, another "originator" of the world's overseas farms is the United States. At the beginning of the last century, the United States consciously grew agricultural products in its overseas colonies (8.38,0.00,0.00 percent). By the end of the last century, the United States, which had already mastered the global voice, began to invest in overseas agriculture on a large scale. Under the background of promoting bioenergy (such as ethanol fuel), it bought or rented large areas of farmland to grow corn in Brazil, Mexico and other countries.
For the U. S., the latest news from Ukraine. The British "Financial Times" stated on January 13 that Cargill, a US-based agricultural trading giant, has invested US $0.2 billion in Ukraine's largest agricultural comprehensive holding company Ukr-LandFarming.
Ukraine is the largest country in Europe outside Russia. Nearly 70% of the country's land area is arable land. Nearly one-third of the world's black soil belt (most suitable for food cultivation) is in Ukraine. Although Ukraine does not completely allow the sale of land, one of the data that foreign agricultural giants are most concerned about is that up to now, 40% of Ukraine's agricultural potential has not been tapped.
"This company is very accurate. Although it is a business, the potential resources behind it cannot be ignored." For Cargill's investment, analysts believe.
China's other neighbor, South Korea, is also eager to reclaim its land overseas. In mid-January 2008, South Korea's Daewoo Logistics Company announced that it would lease 1.3 million hectares of farmland to the African island nation of Madagascar for a 99-year lease to grow crops to supply domestic demand. It has been estimated that "this deal accounts for almost half of the land suitable for farming on the island."
after World War II, the Korean government has long been aware of the crisis of its food security situation. In the late 1970 s, in order to implement the policy of increasing rice production, the South Korean government purchased land in Argentina and opened the first overseas wasteland farming project in South Korea.
In early 2008, then South Korean President Lee Myung-bak issued a call to "establish overseas grain bases" and strive to increase the self-sufficiency rate of South Korea's grain production (including domestic production and overseas farming) to 50%. In January 2012, South Korea's Overseas Agricultural Development Cooperation Law officially came into effect. In the past, investment targets limited to petroleum and other mineral resources were expanded to foreign agricultural resources such as rice, soybeans, corn, and animal husbandry, which provided for the development of foreign agricultural projects. Legal protection.
India's movements are equally noteworthy. In May 2011, when reporters from the International Finance News communicated with local media in India, their views were almost the same. While protecting domestic iron ore and other resources, they hoped that India could actively "go out" and expand its resources. The territory includes overseas rare earths, agriculture and other resources, "because India itself has to meet the needs of more than one billion people in all aspects".
In fact, one public information is that in 2008, 15 Indian companies, led by the National Trading Corporation of India, began negotiations on renting farmland in Paraguay, Uruguay, and Brazil. At the same time, Indian companies have also purchased cash crop estates in Myanmar, Indonesia and other countries. To this end, the Indian government once wanted to change the law, and the Reserve Bank of India also considered relaxing lending restrictions on these overseas farm enterprises.
In addition to China's many neighboring countries and the United States, in recent years, the trend of Middle Eastern countries is also worthy of attention. For example, Saudi Arabia has long said it intends to set up a large overseas agricultural investment company to ensure the country's food supply.
Countries such as Bahrain, Kuwait, Qatar, Oman, Jordan and the United Arab Emirates, which have been heavily dependent on food imports in the past, learned from the food crisis from 2007 to 2008 and formed the Gulf States Cooperation Council to work together to find opportunities for farming overseas. It is said that their "target" countries are Laos, Indonesia, the Philippines, Vietnam, Cambodia, Pakistan, Thailand, Myanmar and other Southeast Asian countries, as well as Ukraine, Kazakhstan, Georgia, Russia and Turkey in Central Asia and Europe have reached or are negotiating land lease and land purchase agreements.
Tuntian = Weapons?
In addition to the national policy, the more dynamic investors from some financial giants. The fundamental reason for this investment flow is that food itself is a very mature financial product. The purpose of capital is to make a profit, but the more dangerous purpose of controlling food is to use food as a bargaining chip and thus control everything.
It is worth noting that in the tide of overseas reclamation, there are two points that have attracted the attention of the industry. First, it is not just physical companies and countries that are operating overseas, but financial firms and commodity trading giants are also acquiring farmland. In 2008, US financial giant Morgan Stanley bought 40000 hectares of farmland in Ukraine, British investment company Landkom also bought 100000 hectares of farmland in Ukraine, and two Swiss investment companies, Black Soil Reclamation Company and Alpaco Agricultural Company, also bought 331000 hectares and 128000 hectares of farmland in Russia in 2008.
Today, when food prices are becoming more and more "financialized", the land purchase behavior of financial enterprises has to be observed. In the global food crisis from 2007 to 2008, financial companies moved around the market and raised prices, which caused many food-deficit countries a headache. William Endor, an American scholar in Germany, introduced in his 2008 book Food Crisis that since the outbreak of the food crisis in the early 1970 s, as world food stocks reached an all-time low, Wall Street investment banks, hedge funds and other financial institutions speculated wildly, resulting in more than double the international prices of wheat, rice, corn and other basic food crops.
Secondly, in overseas operations, China has become a coveted object. In May 2011, Japan's Asahi Beer Co., Ltd., Sumitomo Chemical Co., Ltd., and Itochu Commercial Co., Ltd. jointly funded the establishment of three Fortune 500 companies. "5 years ago (2006) in Laiyang City, Shandong Province, it signed a contract involving Thousands of acres of arable land lease'foreign contract' directly entered China's agricultural production link, breaking the previous program of foreign investment in Chinese agriculture focused on processing and sales, from" seller "to" farmer '."
if soybeans are also counted as food products, then some overseas agricultural giants have long been deployed in areas rich in black soil resources such as Heilongjiang in China, and have the right to speak upstream.
In Ma Wenfeng's view, the purpose of the tide of overseas farming in various countries may not be generalized, nor can it all be characterized by conspiracy theory. For example, some countries are indeed to ensure their own food security and ensure their own domestic food supply; some countries may be to use the cheap labor of the local country to reduce costs; and some may have certain political purposes, in order to win over The political and economic relationship of the local country, etc.
"Business is always business. But what cannot be ignored is that the underlying national interest thinking behind some deals has to be learned." Ma Wenfeng think.
"because, in reality, mastering the global voice of agricultural land and other resources has a subtle impact on the food security of emerging market countries, including China, directly or indirectly." According to Ma Wenfeng, for example, the voice of agricultural giants has been demonstrated. "In recent years, as long as there is a gap in wheat and corn in the Chinese market, and then they have to import these grains from overseas, some overseas agricultural giants will increase prices and earn Large profits, at the same time, Chinese state-owned import enterprises have to pay more funds. In fact, this is not a good phenomenon for China, which has a 1.4 billion population and a growing potential demand for food".
As a matter of fact, the resources such as grain and other resources that countries hold overseas are not used for food unilaterally. "Whoever controls the food controls all the people; whoever controls the oil controls all the countries; whoever controls the currency controls the whole world." Former US Secretary of State Kissinger's famous saying put food in the first place.
Endor also cited in his book "Food Crisis" that U.S. food aid once served as a more powerful political weapon than oil trade: in 1949, when the People's Republic of China was established, the United States and other Western allies immediately imposed a comprehensive blockade and commodity embargo on China, including food, which lasted until the early 1970 s. From 1965 to 1967, US President Johnson adopted a policy of restricting food exports to India, eventually forced India to change its foreign policy of opposing the US invasion of Vietnam.
China Action
is China a capitalist or a land provider? In China, there are both situations. But there is no doubt that the temptation to farm is growing. Fundamentally, it is still 1.8 billion mu of arable land, 1.4 billion population, China's ability to feed itself is close to the limit. China's actions in Ukraine, or see this urgency.
Cui Xinsheng believes that in the field of food security, China should also have its own "going out" thinking. "from a strategic point of view, China may not need to open up fields on a large scale, but it cannot but have its own ability to distribute resources to ensure China's food security".
"In addition, from the perspective of China's own agricultural land resources, the small amount of farmland per capita has always guaranteed the food rations of 1.4 billion people in China. From an international perspective, it is not easy." Cui Xinsheng said.
The book "Food Security: Challenges and Responses of the Century" published in 2013 also stated that although China currently accounts for 6% of the world's water resources and 9% of arable land, it has basically solved the food ration problem that accounts for about one-fifth of the world's population. However, the pressure of population, resources and environment has been quite prominent. "In the future, agriculture and food production will be more and more restricted by resources and environment, we should learn from relevant international experience and take effective measures to strengthen the development, utilization and protection of natural resources, and promote the development of sustainable agriculture and food security".
The above factors seem to have become the direct cause of China's going out of the "field. In fact, Ma Wenfeng has long observed that in the past few years, China's overseas agricultural investment has covered Oceania, South America and other regions.
Japanese media have noticed that since the Australian Foreign Investment Review Board relaxed foreign investment restrictions on residential real estate at the end of 2008, real estate investment from overseas has increased significantly. Among them, China's investment in agricultural land in Australia once increased nine times, such as large livestock farms.
In South America, the state-owned Beidahuang (10.17,0.00,0.00 per cent) Group developed 234000 hectares of land in Argentina to grow soybeans and corn. Chongqing Grain Group, a local state-owned enterprise in Chongqing, spent US $0.375 billion to grow soybeans in Brazil and US $1.2 billion to grow soybeans, corn and cotton in an Argentine development base.
On the recent situation, the market was once a lot of people before the signal of excitement. At least in the resource-rich Ukrainian market, China is not "doing nothing". When Ukrainian President Yanukovych visited China in December 2013, the two countries decided to give priority to and strengthen cooperation in a series of areas, including agriculture. Prior to this, there was also cooperation at the official level-on May 25, 2012, during the second meeting of the Agricultural Cooperation Sub-Committee of the China-Ukraine Cooperation Committee, the Export-Import Bank of China, China Complete Engineering Co., Ltd., the Ministry of Finance of Ukraine, and the State Food of Ukraine The Grain Group jointly signed the "China-Ukraine Agricultural Cooperation Framework Agreement" with an agreement amount of 3 billion US dollars.
"Ukraine has resources and China has technology and capital. In terms of agricultural cooperation, China should not give up this European'granary '." Cui Xinsheng said.
More than that, Ukraine's unian news agency announced in late September last year that China's Xinjiang production and Construction Corps signed a 50-year agreement with Ukrainian agricultural company KSGAgro. The country's Kiev Post also revealed that the investment was "more than US $2.6 billion" and was an "unprecedented foreign investment" in Ukraine's agricultural sector ".
The South China Morning Post also revealed that Ukraine will initially provide China with more than 100000 hectares of high-quality farmland in the eastern region of Dnipropetrovsk-an area equivalent to Hong Kong, mainly for planting crops and raising pigs. The project will be extended to 3 million hectares of land. "If this investment is ultimately successful, Ukraine will become China's largest agricultural center overseas."
in the end, the above news has not been officially confirmed. According to media reports, the Xinjiang Production and Construction Corps initially negotiated 3000 hectares, and later the negotiation was expanded to 20000 hectares. The form of cooperation between the two parties was "mainly in the field of financing and irrigation systems" and "only in the demonstration stage".
After the above-mentioned news of the Xinjiang Production and Construction Corps's purchase of land in Ukraine, there were voices of jealousy from other countries. The Times of India commented, "This is called planning for the future. China is acquiring natural resources everywhere, including oil and gas fields, coal fields, and now farmland, not only to meet current fuel and food needs, but also to prepare for future needs." Another Indian netizen questioned: "Is this a novel way for the Chinese to seize the territory of other countries?"
"Jealousy is just a small thing. But when Chinese companies go out to buy, they do encounter criticism from other countries." Lin Boqiang, director of the China Energy Economic Research Center of Xiamen University [Weibo], previously told a reporter from the International Finance News that on the one hand, everyone will pay attention to the status of the acquirer's state-owned enterprise and think it is a "national action"; on the other hand, cultural differences are different., It will also make all parties show inadaptability.
China's overseas land purchases have previously been wary of other countries. In November 2011, despite the early preparations and the approval of some government officials, Iceland finally rejected the land purchase request of Huang Nubo, chairman of Zhongkun. "This is actually a reference to the fact that political obstruction will be the biggest obstacle to China's large-scale overseas purchase of farmland." Cui Xinsheng also said.
Some analysts believe that in order to support the "going global" of agriculture, the government should establish agricultural cooperation relations with investment target countries and sign investment agreements. The public sector and industry associations should cooperate with enterprises to provide guarantees for agricultural enterprises to "go global". Possibly provide political protection and avoid political and social risks. In addition, in view of the large amount of investment, long cycle and high risk in agricultural "going out", the government should also provide credit, tax and insurance support for agricultural enterprises to "go out.
Japan's experience is also worth learning from. "Through appropriate system design, Japan has realized a diversified agricultural'going out' model, from trade cooperation to production investment, from the acquisition of land to self-management to order production, from the establishment of subsidiaries to joint ventures with local enterprises. The political, social and agricultural industry conditions of different countries and regions have effectively avoided political and investment risks in accordance with local conditions."
defend food
"China has no plans for overseas farming." This is the bottom line that China's official position has always adhered. The sensitivity of overseas land is that there seems to be a suspicion of plunder. In China, the clearest attitude towards this policy is that China cannot rely on "overseas farming" to ensure food security, but it can be used as a path that can be explored.
There has always been a voice of opposition to the initiative of "overseas farming" in various countries. The more common view is that "rich countries are plundering the resources of poor countries." At a G-8 summit of agriculture ministers, Goffen, vice-president of the International Federation of Agricultural Producers, criticized that the "overseas farming" of rich countries would evolve into a second generation of colonialism, that is, "plundering resources and making poor countries poorer". And the United Nations [microblogging] Agricultural Development Foundation President Navaz is tit-for-tat response: "The world urgently needs private capital to invest in agricultural development projects in poor countries. Otherwise, in 2050 when the world's population reaches 9 billion, the United Nations will be difficult to guarantee world food security."
li Guoxiang, a researcher at the Institute of Agricultural Development of the Chinese Academy of Social Sciences, said, "Theoretically, through international investment, it is conducive to combining land resources and advanced technology to transform resource advantages into economic advantages. But big capital may plunder resources and infringe on the interests of small producers. Therefore, big capital to enter agriculture, especially overseas capital into domestic agriculture, may bring real damage."
in fact, looking at the official statements on overseas land in recent years, they are mainly cautious. In 2009, Niu Dun, the vice minister of agriculture, said that the Chinese government tends to rely on its own land to ensure food self-sufficiency, which is different from countries such as Saudi Arabia and South Korea that invest in overseas farmland. "We cannot rely on investment in other countries to ensure our own food security, we have to rely on ourselves." Niu Dun said. According to Niu Dun's statement during the National Two Sessions in 2013, in addition to soybeans, "the self-sufficiency rate of China's staple food is now about 97%, and the national target is 95%".
As early as 2008, Zhang Xiaoqiang, deputy director of the National Development and Reform Commission, also said that China's agricultural "going out" is mainly as defined in the outline of the medium-and long-term Plan for National Food Security (2008-2020). Establish a stable and reliable guarantee system for imported grain sources in the process of international cooperation. "at present, we also know that China accounts for a large amount of soybean imports, more than double the domestic output, in this case, through international cooperation, there is a stable and reliable system in the procurement and logistics of international soybeans. It should be said that this is what we are currently concerned about".
"In some places where conditions permit, some oil crop cultivation, grain production, vegetable and fruit production are carried out in various ways and locally. It should be said that the national policy also supports qualified enterprises to carry out according to the conditions of different countries and regions. However, it is definitely not a large-scale Chinese farmer or enterprise that goes overseas to buy or rents land from other countries for a long time to grow grain in large quantities, correspondingly rely on it to ensure China's food security." Zhang Xiaoqiang said at the time.
It is worth noting that, according to official media reports, in November last year, Chinese President Xi Jinping said at a symposium at the Shandong Academy of Agricultural Sciences that ensuring food security is an eternal issue for China and cannot be relaxed at any time. "Historical experience tells us that once a great famine occurs, it is useless to have money". Xi Jinping also stressed that to solve the problem of 1.3 billion people eating, "we must adhere to the domestic".
The book "Food Security: Century Challenges and Responses" suggests that China's natural resource utilization and protection should pay attention to international experience in irrigation modernization, farmland protection and ecological compensation.
In this regard, Ma Wenfeng's suggestion is that overseas farming can be a "supplement", but relying solely on this strategy is not enough to make up for China's rising food gap. In the final analysis, "it is still necessary to rely on domestic resources and tap potential".
Ma Wenfeng suggested that supporting agricultural development requires an appropriate increase in the prices of agricultural products, but in the context of the current global economic integration, relying only on increasing the price level of domestic food year by year will be severely restricted. The key is to realize China's agricultural modernization, that is, to realize The scale, industrialization, mechanization, informatization and application of modern biotechnology in agriculture of China's agricultural production have continuously improved the global competitiveness of China's agriculture.
"At present, the per capita arable land area of China's agricultural labor force is small, which has become an important factor restricting the development of agricultural scale and industrialization." Ma Wenfeng believes that, therefore, in order to realize agricultural modernization, the most fundamental thing is to develop non-rural industries in rural areas, absorb surplus labor under modern agricultural conditions, and realize the scale and modernization of agricultural production. At the same time, it is necessary to reduce or exempt all taxes on small, medium and micro enterprises in rural areas, and technical and financial support should be given to projects that can indeed drive more employment in rural areas, and more resources to promote China's and even global economic development should be transferred to my country's rural areas., So as to realize the improvement of the overall strength and overall level of my country's economy, and realize the integration of urban and rural economies.