RSS   Newsletter   Contact   Advertise with us

China bought 5% of Ukraine

Staff writer ▼ | September 25, 2013
China has signed a deal to farm three million hectares of Ukrainian land over the span of 50 years, meaning China bought 5% of Ukraine will give up about 5% of its total land, or 9% of its arable farmland, to feed China's population.
Ukraine farm
Ukraine farmChina has signed a deal to farm three million hectares of Ukrainian land over the span of 50 years, meaning China bought 5% of Ukraine will give up about 5% of its total land, or 9% of its arable farmland, to feed China's population.


Under the deal between China's Xinjiang Production and Construction Corps (XPCC) and KSG Agro, an Ukrainian agricultural company, crops and pigs raised in the eastern region of Dnipropetrovsk will be sold at preferential rates to two Chinese state-owned grain firms. The project will launch with 100,000 hectares and eventually expand to three million.

The deal comes after Ukraine lifted a law barring foreigners from buying Ukrainian land last year. As part of the deal, China's Export-Import bank has given Ukraine a $3 billion loan for agricultural development.

In exchange for its produce, Ukraine will receive seeds, equipment, a fertilizer plant (Ukraine imports about $1 billion worth of fertilizer every year), and a plant to produce a crop protection agent. XPCC also says it will help build a highway in Ukraine's Autonomous Republic of Crimea as well as bridge across the Strait of Kerch, a transport and industrial center for the country.

Saudi Arabia, South Korea, the United Arab Emirates, Britain, the US and other countries have been buying up foreign farmland, especially after the global food price spike of 2007 to 2008 that spurred global riots.

According to a report last year by the nonprofit Grain, the main target of these purchases has been Africa but also Eastern Europe, Latin America and Asia. Between 0.7% and 1.75% of the world's farmland is being transferred from locals to foreign investors, another study in January found.

China has been among the most aggressive countries, and with a reason: It eats about one-fifth of the world's food supplies, but is home to just 9% of the world's farmland, thanks to rapid industrialization and urbanization of the formerly agrarian nation. Its deal with Ukraine is its biggest farmland investment yet. Since 2007, China has bought farmland in South America, Southeast Asia and Africa.


 

MORE INSIDE POST