Tag Archives: ukraine

Biofuels Producers Hunting Foreign Fields

With nearly 70% of global biofuels production centered on the United States’ corn and Brazil’s sugarcane harvests, concentrated commodity feedstocks have been the common denominator in biofuels industry growth over the past decade.  Advanced biofuels companies seeking to produce next-generation fuels derived from non-food feedstocks are attempting to replicate this model – without the associated social and environmental ramifications of using food-based crops.  Access to land for mass feedstock production is a difficult challenge for which many innovative strategies have been proposed. Companies like SG Biofuels , Ceres , and others are squarely focused on biotechnology innovation, involving complex biological modifications at the crop’s cellular and genetic level.  The central focus of these efforts is the optimization of dedicated energy crops for growth in a variety of locations where food crops are not currently grown, including poor soils and areas lacking irrigation.  Among these, jatropha, camelina, energy grasses like miscanthus, and dedicated trees like eucalyptus have received the most attention. But optimizing crop strains to thrive in a variety of climates and soils is only half the battle.  Recent experience has shown that the success of even miracle next-generation feedstocks like jatropha , which can produce oil-rich seeds in poor soils and without irrigation, is exaggerated.  As with food crops, bountiful energy crop harvests (i.e., lots of biomass material for biofuels production) require irrigation, nutrients – and plenty of land. Land Ho! Finding suitable tracts of land with nutrient-rich soil and irrigation for which a large quantity of crops can be grown – but without diverting land otherwise dedicated to food production (see The New York Times blog on food vs. fuel ) – remains an elusive goal.  Increasingly, governments and corporations are looking abroad. Since the food crisis of 2007-2008 , foreign direct investment into countries with undeveloped agricultural potential has accelerated.  According to data compiled by the Oakland Institute , an estimated 56 million hectares of land (nearly the size of France) has been acquired in the developing world by international governments and investors since 2008. Last month, China announced that it will invest billions of yuan into 3 million hectares (7.5 million acres) of farmland in Ukraine, its biggest overseas agricultural project.  This will more than double China’s current portfolio of 2 million hectares (5 million acres), mostly concentrated in Latin America and Southeast Asia. China is not alone in this quest.  According to a policy paper published by the Woodrow Wilson International Center, “One of the largest and most notorious deals is one that ultimately collapsed: an arrangement that would have given the South Korean firm Daewoo a 99-year lease to grow corn and other crops on 1.3 million hectares of farmland in Madagascar – half of that country’s total arable land.”  Government and institutional investors across other developed economies, including Japan, the United States, the European Union, and wealthy Gulf states, are all actively involved in this rush. Complicated by the checkered history of international land grabs, this trend is not without its critics. Balancing Objectives While intentions may be in the right place in most instances, the past has shown that the consolidation of cultivatable land for foreign or multinational interests can often lead to the displacement of local subsistence farmers, as well as other negative environmental impacts.  In recent years, governments have, at least publicly, imposed more restrictions on biofuels investments abroad to prevent a scramble toward destructive plantation-style feedstock cultivation. The EU’s Renewable Energy Directive (RED) mandates that member states derive 10% of energy consumption within the transportation sector from renewable sources by 2020.  Recently signed legislation caps the contribution of conventional food-based biofuels , calling for a rapid switch to advanced biofuels.  A slew of sustainability standards , meanwhile, aim to mitigate the negative impacts of large-scale dedicated energy crop production for advanced biofuels. In Navigant Research’s recently published report, Advanced Biofuels Country Rankings , issues such as available arable land and the potential for sustainable feedstock hubs figure heavily into assessments of the potential of individual countries to support advanced biofuels commercialization.  At one time regarded as an issue exclusively focused on conventional biofuels, access to land for advanced biofuels production is proving equally sensitive. Continue reading

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Hungry China Wants To ‘Borrow’ Land From ‘Bread Basket’ Ukraine For 50 Years

Chinese plans to lease 5 percent of Ukraine’s total land to grow crops may be nothing more than a pipe dream. Ukrainian officials say they know nothing of the deal, reported in a Chinese newspaper over the weekend. The South China Morning Post reported China’s Xinjiang Production and Construction Corps (XPCC) had a 50-year plan for crop and pig farming, spanning over 9 percent of Ukraine’s arable land. Sergey Kasyanov, Chairman of KSG agro, explained the misunderstanding. China’s reported ‘land grab’ would include eastern territories near the Dnieper river, Kherson, and Crimea, well-known for its coastal beaches. “I don’t have any information on the subject, unfortunately. I know that Chinese companies occasionally show interest,” Igor Livin, the Chairman of the Association of the Ukrainian-Chinese Cooperation told Vesti 24. On Monday, the Ukrainian Minister of Agriculture and Food said China and Ukraine will become strategic partners. A Chinese-Ukrainian cooperation could help Kiev increase its international trade, while Beijing could reach its goal of becoming 95 percent self-sufficient in food. Ukraine is home to 45 million people and boasts a gross domestic product of $176 billion. China’s population accounts for about a fifth of the global population, with at 1.4 billion people living in the country. It is also the world’s second largest economy, with over 8 trillion in GDP. Land Grab Worldwide 115 million acres are leased to foreign investors. These countries are seeking greener pastures to grow crops in Congo, Sudan, Indonesia, Tanzania, Mozambique, Ethiopia, and Australia, according to the report. Land has made a comeback – from cattle, private ski resorts, hunting and fishing clubs, to the Maine coastline – for American entrepreneurs who prefer to take a stake in natural real estate to diversify and hedge their assets against the risky gold, oil, and stock prices. Continue reading

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China Just Bought 5% Of Ukraine

By Lily Kuo @ lilkuo September 23, 2013 China likes the look of this red star. Reuters/Alessandro Bianchi China has inked a deal to farm three million hectares (paywall), or about 11, 583 square miles of Ukrainian land over the span of half a century—which means the eastern European country will give up about 5% of its total land, or 9% of its arable farmland to feed China’s burgeoning population. Under the deal between China’s Xinjiang Production and Construction Corps, or 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. Here’s some context on what that looks like: 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. Critics say the move exemplifies a slew of global land deals that smack of colonialism and resource extraction by richer countries in poorer ones. Today, such deals are increasingly motivated by governments seeking food security for their citizens, rather than profit-mongering by private companies. 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. Given its dwindling available farmland and expanding population, China has been among the most aggressive. The country 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 (pdf) in South America, Southeast Asia and Africa. Some analysts fear the Ukraine-China pair up paves the way for an eventual Chinese takeover of all of Ukraine’s farmable land. Similar fears about local food security led the government of the Philippines to block a China investment deal; Mozambique has resisted the arrival of Chinese farmers who would have displaced locals. Others argue the project gives Ukraine the opportunity to boost food exports. Since the breakup of the Soviet Union, the country has been slow to fully privatize and develop its agricultural industry. Continue reading

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