Río Negro, Argentina: Saiz signed with China to provide food for 20 years

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Río Negro's Governor, Miguel Saiz

La Nación | 25 October 2010 | Español [roughly translated by GRAIN]

Viedma. - The [Argentine] province of Río Negro will ensure the provision of food to China for 20 years. That much was agreed between the Governor of Rio Negro, Miguel Saiz, and one of the largest food companies of this giant nation of 1.3 billion people, the state-owned Beida Yuang, during Saiz's recent trip to China. The agreement consists of Río Negro renting land from farmers in the state, where Beida Yuang will set up the irrigiation systems to permit the production of soybeans, wheat and oilseed rape, among other crops. Right now, these are arid lands where just a few cows graze, according to Saiz.

In a first experimental stage, which will commence immediately, Beida Yuang (Beidahuang) will invest US$20 million to irrigate and cultivate 3,000 hectares of rented fields. But the project foresees a total investment of US$1.45 billion over 20 years involving 320,000 hectares.

What Beida Yuang seeks is to secure a food supply for 20 years, for [the benefit of] a country where only 10% of the land is productive and where each year millions of people leave the countryside for the city or move out of poverty to join the middle class.

The deal with Río Negro guarantees a long-term supply of commodities at the same price registered at the Chicago Board of Trade. The Chinese firm does not seek to buy on the cheap but to see purchase orders complied with, something that it always complains about when it has to negotiate with the planting groups in Argentina, said Saiz, who spoke to La Nación before addressing a business summit in Chengdu about the importance of Chinese investment in the MCC mine in Sierra Grande.

Controversies have recently broken out in various Latin American countries over the purchase of farmland by foreigners seeking to assure their own food supply. China is not the only country concerned with this issue. Delegations from Saudi Arabia and Qatar have recently visited Argentina with the intention of acquiring farmlands. And the European Union is interested in a free trade agreement with Mercosur because, despite its protectionist farm policies, it recognises that it cannot guarantee the food security of its citizens on its own.
Original source: La Nación
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