China and Mozambique invest in the Zambezi Valley to make Chinese “grain store”, says researcher

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Beijing, China, 21 July 2008 – Chinese and Mozambican governments want to make the Zambezi Valley region of Mozambique a centre for rice production for the Chinese market, which is faced with increased consumption and less and less arable land, says researcher Loro Horta, a specialist in relations between China and Portuguese-speaking African countries.

Noting that China’s interest in the region dates from 2006, Horta goes on to highlight the recent signs of political relations between Beijing and Maputo as a sign of Chinese interest in long term agricultural activity in Mozambique, a plan which Horta says is mutually beneficial, as long as it is well-planned and executed.

“If carried out with sensitivity, China’s agricultural plans could bring tremendous benefits for both sides,” says Horta, an East Timorese researcher based at Nanyang University in Singapore.

In an article published mid-July, Horta said that Chinese interest began at the start of the second quarter of 2006, when China, through the state-owned Exim Bank, granted Mozambique a loan of US$2 billion to build the Mpanda Nkua dam on the Zambezi, downstream from the Cahora Bassa dam.

Since then, according to Horta, “China has been requesting large land leases to establish Chinese-run mega-farms and cattle ranches.”

As well as Mpanda Nkua, the researcher also recalls that China has offered to finance three other dams on the Zambezi and another two on the river Limpopo, at the same time as building new roads and modernizing the Guelimane and Nacala harbour infrastructures in Zambezia and Nampula provinces respectively-

“This investment in infrastructure is clearly designed to maximize production and facilitate the rapid export of foodstuffs to China while at the same time giving lucrative contracts to Chinese companies,” says Horta.

“China has put significant resources into improving agricultural production, with rice as the main priority. In early 2008, the Chinese government pledged to invest US$800 million in modernizing Mozambican agriculture, with the goal of boosting rice production from 100,000 tons to 500,000 tons a year over the next five years,” he added.

According to official Chinese figures, consumption of rice in China has doubled between 1985 and the present, to 50 kilos per person, a consequence of the country’s growing economy.

While the amount of arable land is decreasing in China due to the increase in the size of cities and residential areas and to environmental degradation, land is increasingly sought after to ensure the production of other crops such as soy beans, sugar and cereals, consumption of which has risen by over 30 percent in the last decade.

“The growing demand for food and the rapid shrinking of available arable land (...) have made finding new agricultural lands a priority for the Chinese government,” said Horta, adding that “China is committed to transforming Mozambique into one of its main food suppliers, particularly for rice, the basic element of the Chinese diet.”

Horta predicts that Chinese expansion in rice in Mozambique will start with the emigration of around one thousand Chinese to the Zambezi Valley in a trend to be seen over the coming years. Chinese manpower, he said, would operate the advanced agricultural equipment and manage the large farms and the irrigation infrastructures, while the Mozambican workers will carry out the heavier manual work.

As for control of the land – that is state-owned and therefore cannot be sold or rented out – the researcher predicts the creation of partnerships with Mozambican entities that will be “sleeping partners” with Chinese associate to ensure the management of the business.

“Mozambique’s increased rice production is clearly destined for export to the Chinese market, since rice accounts for just a tiny fraction of the Mozambican diet and is primarily consumed in the big cities by the wealthy. Over 90 percent of the country’s population relies on manioc (cassava) and shima (cassava flower), maize, and peanuts," he said.
Horta also says that “Mozambique expects to receive hard currency from rice exports that will allow it in turn to buy Chinese made goods and other commodities in the world market.”

It was also with this objective that Maputo and Beijing agreed to create an advanced agricultural research institute in Mozambique - with Chinese funds – as well as other agricultural schools throughout the country, he said.

Other projects financed by China include irrigation channel networks, as well as the arrival in Mozambique of over 100 Chinese experts including a team from the Hunan Hybrid Rice Institute, one of the best research institutes in the field within China.

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