When the Chinese came looking for more soybeans here last year, they inquired about buying land, lots of it.
Officials in this farming area would not sell the hundreds of thousands of acres needed. Undeterred, the Chinese pursued a different strategy: providing credit to farmers and potentially tripling the soybeans grown here to feed chickens and hogs back in China.
“They need the soy more than anyone,” said Edimilson Santana, a farmer in the small town of Urua?u. “This could be a new beginning for farmers here.”
The US$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 has become Brazil’s biggest trading partner, buying ever increasing volumes of soybeans and iron ore, while investing billions in Brazil’s energy sector. The demand has helped fuel an economic boom here that has lifted more than 20 million Brazilians from extreme poverty and brought economic stability to a country accustomed to periodic crises.
Yet some experts say the partnership has devolved into a classic neo-colonial relationship in which China has the upper hand. Nearly 84 percent of Brazil’s exports to China last year were raw materials, up from 68 percent in 2000. But about 98 percent of China’s exports to Brazil are manufactured products, including the latest, lowpriced cars for Brazil’s emerging middle class, that are beating down Brazil’s industrial sector.
While visiting China last month, Brazil’s new president, Dilma Rousseff, emphasized the need to sell higher-value products to China, and she has edged closer to the United States. “It is not by accident that there is a sort of effort to revalue the relationship with the United States,”said Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson International Center for Scholars. “China exposes Brazil’s vulnerabilities more than any other country in the world.”
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.
Foreigners own an estimated 11 percent of productive land in Argentina, according to the Argentine Agriculture Federation. In Brazil, one government study estimated that foreigners owned land equivalent to about 20 percent of S?o Paulo State.
International investors have criticized the restrictions. At least US$15 billion in farming and forestry projects in Brazil have been suspended since the government’s limits, according to Agroconsult, a Brazilian agricultural consultancy.
Responding to the criticism, Brazil’s agriculture minister said this month that Brazil might start leasing farmland to foreigners, given the barriers to ownership.
China itself does not allow private ownership of farmland, and it cautioned local governments against granting large-scale or long-term leases to companies in a 2001 directive. China also bans foreign companies from buying mines and oil fields.
But as 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 US$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.
Brian Willott, an American farmer who came to Brazil in 2003, said Chinese interest in buying farms had not abated. “Everywhere you go to look at a farm they say, ‘We are considering selling to the Chinese,’ ” he said.
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
But Tan Lin, a manager at the Chinese company involved in Goiás, said he doubted Chinese companies were ready to replace them. (New York Times)