Tuesday, May 9, 2017

Foreign Aid Boosts Rice Seed Exports

China's new "Aid + Market" initiative blurs the lines between foreign aid and commerce by using technical assistance projects as a platform to export hybrid rice seed.

The program was announced in conjunction with a 500-billion yuan (?!) agreement signed last month between Longping High Tech Agriculture Co. and the Sanya Municipal research institute to set up a foreign market research and development center in Hainan Province. Longping is a seed company formed by two Hunan Province rice research institutes in 1999. It is named after its figurehead, Yuan Longping, known as "father of China's hybrid rice." The company has carried out Chinese rice demonstration projects in Southeast Asia, South Asia, and Africa for many years.

According to 21st Century Business Herald, the new strategy is part of the One Belt One Road initiative which aims to build new trade routes from western China to Europe through Central and South Asia. Many of the Belt-Road countries grow rice, and Chinese companies like Longping High Tech plan to set up demonstration farms and agricultural parks to disseminate their rice varieties and provide training. Chinese foreign aid projects are implemented by companies like Longping High Tech.

Longping High Tech's foreign aid will serve the public interest by disseminating high-yielding hybrid rice while also creating market opportunities. A spokesman for the company said technical training has already helped many Southeast Asian countries become self sufficient in food. Longping brand rice seed has become popular in some countries. The company says it has trade relations with 40 countries and exported 4100 metric tons of rice seed during 2015.

According to a company official, working in Belt-Road countries is challenging due to poor irrigation, weak infrastructure, lack of inputs, lagging breeding technology, lack of extension and few agricultural technicians. China's seeds are approved only for planting in designated regions, may not be suitable for conditions in other countries, and some nations strictly limit import of rice seeds.

In 2015, Longping set up an international company to research localization of seed, processing and sales. The company already has R&D centers and breeding stations in Pakistan, Philippines, India, Bangladesh, East Timor, Indonesia, Liberia, Angola, Nigeria, and Ethiopia. The company has 19 varieties of rice approved or registered for use in Pakistan, Philippines and other countries.

CITIC Group, China's state-owned finance corporation, became Longping High-Tech's largest shareholder in 2016, giving the company financial resources for aggressive international expansion.

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