Political Risk Latin America Blog @PolRiskLatam

China’s Interest in Farmland Makes Brazil Uneasy

Posted in News and Articles, Political Risk by politicalrisklatam on May 27, 2011

by Alexei Barrionuevo for The New York Times, May 26th, 2011.

When the Chinese came looking for more soybeans here last year, they inquired about buying land — lots of it.

A new railroad line in Uruaçu, Brazil, will carry soybeans to a port for shipping to China. Brazil’s economic links with China have helped it prosper, but Brazil is selling mostly raw materials.

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 Uruaçu. “This could be a new beginning for farmers here.”

The $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 BrazilArgentina 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.

“They are moving in,” said Carlo Lovatelli, president of the Brazilian Association of Vegetable Oil Industries. “They are looking for land, looking for reliable partners. But what they would like to do is run the show alone.”

(continue reading… )

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