Big Chinese soy project in Brazil: so far, just an empty field
No signs identify a barren field in northeastern Brazil that was meant to be the center of one of China's most ambitious agricultural forays into South America.
In 2011, Chongqing Grain Group Corp announced plans to build a soy crushing plant, railways and a giant inland storage and transportation hub to export goods back to China. The total price tag: $2 billion.
Yet today, the company has only managed to bulldoze a 100-hectare area on which the crushing plant might one day stand. Even that project is on hold, though, and shrubs are starting to grow back on the cleared terrain.
The stalled plans are an example of the difficulties facing once-promising Chinese investments here. Brazil's notorious bureaucracy, its slowing economy and a deep-seated mistrust of China's hunger for land and commodities all appear to explain why the field is still empty.
A Reuters investigation last year found that after a rush of investment announcements in recent years, as many as two-thirds of Chinese projects in Brazil face lengthy delays or never get off the ground.
The government of Bahia state says the Chongqing Group's plans are still moving forward - slowly.
"It's just in bureaucratic processes," said Josalto Alves, spokesman for Bahia's agriculture department. He said the plant needed approval from a municipal government as well as environmental licenses.
It's unclear whether Chongqing has abandoned the other elements of the project. Representatives for the company in China and at its subsidiary in Bahia, called Universo Verde, declined repeated requests for comment.
Alves said the company is still evaluating infrastructure projects, although other local officials told Reuters that Brazilian companies are likely to build a railway and transportation hub.
Margaret Myers, program director for China and Latin America at the Inter-American Dialogue, a Washington-based think tank, suspects the delays are about more than red tape.
Chongqing Grain Group originally planned to not only build the plant, but also acquire large expanses of surrounding farmland, according to Brazilian media reports.
At the time, Brazilian legislators expressed worries that China was interested in securing as many natural resources as it could, with little benefit to Brazil, one of the few countries in the world with new land available for agriculture.
Myers said the Chongqing project was widely perceived as a "land grab."
As negotiations for its terms were underway in 2010, the Brazilian government tightened restrictions on foreign land ownership - a move that officials privately said was mostly aimed at China.
- What to do now in regards to the 2014 Farm Bill
- Mistakes that hurt a farm's credit
- Mycogen Seeds introduces four new sunflower hybrids for 2015
- China cuts cotton import quotas to boost demand for its own fiber
- Hog futures the exception to bearish ag market rule Monday AM
- Gangster herbicide program update
- U.S. GMO labeling foes triple spending in first half of this year
- Activists fighting Golden Rice even more in 2014
- Source shows half of GMO research is independent
- East-West Seed signs marketing collaboration with Monsanto
- White House issues veto threat on bill to block WOTUS rule
- USDA releases 2012 cash rents data report