Sunday 13 February 2011

Why China’s next generation could be fed by Africa

With farmland shrinking fast, the problem of how to feed 1.3 billion is becoming a major worry for Beijing

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Guanyu said...

Why China’s next generation could be fed by Africa

With farmland shrinking fast, the problem of how to feed 1.3 billion is becoming a major worry for Beijing

Michael Martin
10 February 2011

Tunisian olive oil, Ugandan coffee and sesame from Ethiopia - they are all available to mainland consumers as novelty items on e-commerce websites such as Alibaba.com, but have yet to hit the shelves at most Chinese supermarkets.

Still, analysts say African foodstuffs may represent an opportunity to alter the dynamics of Sino-African trade.

International consulting firm Beijing Axis reported that natural resources like minerals and fuels comprise more than 90 per cent of China’s imports from Africa.

The firm found that between 2006 and 2008, agricultural exports from the continent hovered around 3 per cent of total exports.

But with China’s farmland shrinking rapidly, affected by drought and rapid-fire economic growth and urbanisation, Africa could become a “food basket” for the country’s 1.3 billion consumers, according to Hong Kong-based Sino-African relations analyst Andrew Leung Kin-pong

“China has a lot of mouths to feed,” Leung said. “The nation is suffering from tremendous effects of industrialisation.

“Food prices are increasing drastically in China because of climate change, urbanisation and pollution.”

The National Bureau of Statistics says the mainland’s per capita arable land is only 32 per cent of the world average. It lost 8 million hectares of arable land between 1996 and 2009.

“There is a lot of room for China to engage Africa in food production,” Leung said.

A severe winter drought in the North China Plain is predicted to affect domestic agricultural production, and wheat yields and other major staples are a particular concern, according to a recent alert from the United Nations Food and Agriculture Organisation (FAO).

If drought persists and affects China’s own agricultural production, that might change the scale of the country’s demand for agricultural imports, said Zhang Zhongjun, media officer of the FAO’s Beijing bureau. However, he says it’s too soon to tell.

Africa has 733 million hectares of arable land, six times China’s amount, according to a 2009 report by the United Nations Economic Commission for Africa.

Dave Malcomson, of the South African embassy in Beijing, said: “If there is one area where Africa has an advantage, its agriculture.

“Agricultural industry could bring a lot of revenue, and the basic structure of most African economies is based on agriculture.”

South Africa is China’s second largest African trade partner, behind Angola.

At the other end of the scale, the impoverished central African country of Burundi exports nothing to the mainland, its embassy says, accounting for a substantial bilateral trade deficit.

Still, Burundi’s ambassador to Beijing, Pascal Gasunzu, is insistent that agricultural exports to China are essential to the nation’s return from a crippling insurgency that lasted from 1993 to 2003.

Guanyu said...

Burundi is reconstructing its economy by recovering the production of cotton tea and coffee, the main agricultural products exported before the country’s turmoil, Gasunzu said. Like Africans, many on the mainland are also expressing an interest in diversifying Sino-African trade in response to Western criticisms that Beijing is copying the Western powers that exploited the continent’s natural resources in the colonial and post-colonial eras.

“There is great potential for African agricultural products in China, for example coffee, tea, meat and flowers,” said Lin Yi, secretary general of the Chinese-African People’s Friendship Association.

“Considering the good environment in Africa, those products with good marketing strategies can enter into a market segment with customers who care more about green products.

“Another concern may be helping the poor in Africa. I believe there are many well-meaning Chinese who would like to pay more for products from Africa if they believe they are helping the poor African farmer.”

Natural resources like iron ore accounted for close to 80 per cent of South Africa’s exports to China in the first 10 months of last year.

Neren Rau, chief executive of the South African Chamber of Commerce & Industry, says of the remaining exports, agricultural goods, chemicals and wool, contributed 1 per cent or less of the total.

Malcomson said red tape, in the form of non-tariff restrictions, were a major barrier to the development of Africa’s agricultural export to China.

He said his country was working closely with the General Administration of Quality Supervision, Inspection and Quarantine but that negotiating apple and pear protocols could take four to five years.

Africa’s readiness to deliver is another major issue. “Concerning agricultural products, Lesotho is producing for [its own] consumption,” said Makhotsofalang Lekaota, from the landlocked southern African kingdom’s embassy in Beijing, also pointing to a “lack of resources such as training centres and machinery for grading the quality of products”.

Lesotho is one of many African nations not yet prepared for mass exports of agriculture.

“African agriculture has been underdeveloped for many years and in general needs investment and development assistance to become capable to tap into export markets,” said Matthew McDonald, research analyst at the Centre for Chinese Studies at Stellenbosch University in South Africa.

“Often, subsistence farming is the primary form of agricultural production, and thus not enough is produced for export.”

Malcomson and Leung say Beijing is setting up farmer education centres throughout the continent, with rice and other staples among the products African partners are being taught to produce.

Malcomson says closer inspection of trade data reveals a hidden promise of growth.

Although agriculture’s share of South Africa’s total exports to China remains tiny, the US$64.3 million in agricultural exports recorded in the first three quarters of last year was more than double the amount in the same period the previous year.

Rau agrees that, at least in the South African context, export trends look promising.

“The growth in wine exports has been consistent and substantial in recent years.

“It points to potential for processed agricultural produce,” he said. However, no one expects things to change overnight.

Lin, from the friendship association, recently attended a year-end gala put on by the China-Africa Economic and Technology Co-operation Committee, which offered boxes of luxury food staples to the many pan-African diplomats in attendance.

They were all grown and packaged in China.