From Soybeans to Moringa? Shifting Trends in Latin America’s Agricultural Cooperation with China by Adriana Erthal Abdenur

从黄豆到辣木: 拉丁美洲与中国的农业关系转变
CORN June 2015 Edition.

Xi Jinping at the China-CELAC Forum. Image from Reuters.

Xi Jinping at the China-CELAC Forum. Image from Reuters.

While discussion of China’s international development cooperation in agriculture has focused heavily on Chinese initiatives in Africa, its relevance in Latin America and the Caribbean (LAC) has been intensifying over the past few years. In 2015, when Chinese Premier Li Keqiang made a nine-day visit to the region (stopping in Brazil, Colombia, Peru, and Chile), agriculture was among the sectors mentioned as targets for major new investments by Chinese firms. Li’s announcements hint at a new drive on the part of Chinese stakeholders to expand their role in LAC agriculture. How then does LAC fit into China’s food security strategy?

A cross-regional perspective helps to begin answering this question. In contrast to its role in Africa, in LAC Chinese cooperation in agriculture has three key characteristics.

First, China’s role in LAC agriculture is more recent, with the region having entered China’s food security strategy in earnest only over the past half decade, with bilateral agricultural trade between China and LAC states in the midst of a considerable boom. Since the turn of the millennium, these exchanges have surged from a somewhat modest USD $2 billion in 2000 to USD $26.2 billion in 2012. This growth hints at the zeal of Chinese investors to expand their role in LAC agriculture, especially given certain comparative advantages; for instance, Africa’s overall grain yield has been declining, whereas LAC’s has been expanding.

Second, Chinese agricultural cooperation in LAC is still less diversified than its initiatives in Africa. Trade focuses heavily on imports of soy and other grains, and to a lesser extent, beef. Even in its agricultural technical cooperation with LAC countries, China has relied on a narrower range of mechanisms than in Africa. For instance, whereas China has implemented agricultural research and demonstration centres in nearly thirty African countries, it is only now starting to open up such hubs in LAC.

Third, in LAC, China has been less focused on direct land acquisition than in Africa, where China continues to work to secure long-term leases of agricultural land. The comparatively limited scope of “land-grabbing” by Chinese actors in LAC is partly a result of relatively robust restrictions enacted by key LAC partners on direct land acquisition by foreign stakeholders (restrictions that, in turn, reflect a degree of popular discontent with the prospect of broad ownership/leasing of land by Chinese stakeholders). Both Brazil and Argentina, for example, have passed laws with this intention; although these are general laws aimed at foreign actors, their timing suggests they were enacted primarily in response to attempts by Chinese stakeholders to secure land within those countries).

Instead, Chinese investments have turned towards improvements in production and boosting infrastructure for the storage and transportation of LAC agricultural exports destined to Chinese ports. This roundabout strategy has also muted the negative reactions to China’s investments in the region, although responses have not been uniformly positive: in addition to legal restrictions imposed by some LAC governments, organized civil society entities from the region have evoked the concept of “food sovereignty” in contesting the Food and Agriculture Organization (FAO)’s recent diagnosis that land-grabbing by external actors in LAC has been rather limited in scope.

Recent announcements by both Latin American and Chinese stakeholders suggest that this cooperation scenario is likely to change in the coming decade, with intensification and diversification of LAC-China agricultural cooperation opening up new opportunities—and posing novel challenges.

Despite the geographic distances separating LAC from China, the region boasts abundant natural resources and an overall robust agricultural production—LAC accounts for 11% of the world’s food production, and projections about its future role in global trade have been generally favorable. This capacity—both current and potential—has granted LAC increasing importance within the Chinese government’s evolving food security strategy. China’s strategy seeks not only to supplement China’s limited production capacity relative to its population and shifting consumption patterns, but also to help guarantee stable food and feed supplies that would prevent major disruptions and potential political upheavals to the Communist Party regime. Because LAC produces far more food than it consumes, it has become a major exporter of agricultural commodities, including those—such as soy and beef—that rank high on China’s list of vital imports.

Although LAC agriculture is highly heterogeneous, with a broad variety of stakeholders involved in agricultural subsystems that range from traditional peasant cultivation to market-based, export-oriented monoculture, its current and potential production has caught the attention of Chinese actors (both state and non-state actors). Investments so far have been dominated by medium and small companies, but the Chinese government has actively worked to open up new opportunities, signing cooperation agreements and MoUs with the region’s agricultural powerhouses as well as with smaller producers, and making available credit lines to encourage large-scale investments throughout LAC.

The most ambitious projects focus on boosting infrastructure that can facilitate not only trade in agricultural products, but also minerals like iron ore and copper. The announced projects tend to be bilateral, but they also include an announcement that China may help bring to fruition the Transcontinental Railway, a megaproject aiming to link ports in the South Atlantic and the Pacific. Viability studies are underway, but the sheer scale of the project—not only in terms of the distances covered, but also the difficult terrain along the probable trajectory linking Brazil and Peru, which ranges from dense Amazon rainforest as well as the high altitudes of the Andes—has generated some doubt about the ability to implement the initiative. After all, some Chinese announcements of major projects in the past have remained on paper only.

Recent agreements are noteworthy not only due to their clear intention to intensify agricultural cooperation, but also to diversify initiatives, especially towards niche areas of production that are of special interest to decision-makers in both China and LAC. The Argentine government has recently announced deals to diversify its exports to China so as to include pork, alfalfa, and sorghum, among other products. In another example, among a variety of new initiatives with Cuba, China has backed research into the cultivation of moringa, a highly nutritional plant that ranks among the most common plant species in Cuba. The bilateral cooperation initiative includes the creation of two specialized research institutes, one in Yunnan Province and the other in the Cuban capital of Havana, to collaborate on more efficient moringa production, particularly for use in animal feed.

While others have noted that China’s agricultural cooperation with LAC does not differ in radical ways from the role played in the region by other stakeholders, including corporations based in the advanced economies and other “rising powers,” China’s often effective articulation of state- and non-state actors as well as its deep pockets give its plans for LAC agriculture a viability that is perhaps unmatched by other current investors in the region. The speed of implementation—for those large-scale projects that do come into fruition—will no doubt create new opportunities for a region whose economic growth has been fuelled in great part by Chinese demand for its products. However, this same speed and scale may exacerbate longstanding trends in the region, especially social and environmental impacts associated with export-oriented monoculture.

While Chinese agricultural cooperation in LAC may not quite be the juggernaut that its fiercest critics have portrayed, its shifting role is bound to provoke further changes in the region. Diversification aimed at mitigating negative impacts should be a key component of LAC’s negotiation strategy with Chinese government and private sector actors alike. Along with soybeans, let there be moringa.


adriana-erthal-abdenurAdriana Erthal Abdenur (Ph.D. Princeton, BA Harvard) is professor of International Relations at PUC-Rio and a senior researcher at the BRICS Policy Center, also in Rio de Janeiro. Her research line on South-South development cooperation includes a comparative project on Chinese and Brazilian agricultural cooperation in the developing world. Contact email: abdenur [at] post.harvard.edu

 


 

 

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