Chinese State Farm Tiptoes into Brazil: What's Going On?

China's Hulunbuir State Farm Group signed an agricultural cooperation agreement with Brazil's National Agricultural Society in February 2025. What is this Chinese company with an unpronounceable name? We're likely to see more of these companies in the global agricultural space, so let's take a look at who they are.

"Hulunbuir" is a Mongolian name for the district of Inner Mongolia where one of hundreds of Soviet-style state farms were set up in the 1950s to consolidate communist party control over empty parts of the country. Hulunbuir is made up of grasslands that resemble the U.S. Great Plains or parts of Brazil's interior. In recent years these bureaucratic operations have been dressed up as companies with new names like Hulunbuir State Farm Group. Statistics indicate State Farms control 7.2 million hectares of cropland and produce 5-to-6 percent of China's grain output. 

One of Hulunbuir Group's farms. Source: Hulunbuir web site.

Brazilian news media have referred to Hulunbuir as a "giant," probably based on its claim to have nearly 1 million acres of cropland and an even larger area of grassland. The land is owned by the State, the farm reports to the agriculture ministry, and its farmers are employees. Unlike China's smallholder farms, State farms have access to bank loans and they are included in the government's budget. 

The Hulunbuir agreement appears to have been hastily put together as part of a diplomatic scramble to build goodwill in Latin America led by Inner Mongolia. 

Online Brazilian sources indicate a deputy leader from Hulunbuir arrived in Brazil in late January with several underlings to sign a vague agreement to cooperate with the Brazilian Agricultural Society. Two weeks later Inner Mongolia's communist party secretary arrived in Brazil with a big delegation to sign 17 agreements at an investment and trade meeting and other events with an agricultural focus. Inner Mongolia news media reported that the trip had been ordered by Xi Jinping and was framed in Xi's rhetoric about "building a shared future." The trip was so important that it was made during the Chinese New Year holiday. 

The Hulunbuir agreement with the Brazilian Agriculture Society is apparently not a priority in China. It was not mentioned in the Inner Mongolia account of the trip, although Hulunbuir's agreement with a Uruguayan company in the second leg of the trip did rate a brief mention. The trip was not apparently covered by any other Chinese media. Hulunbuir Group's web site says nothing about the Brazilian agreement. The site has not posted any news items since an announcement last December of a meeting to instruct people how they should think about religion.

 

A Brazilian source described the February signing of the Hulunbuir Group's cooperation agreement as a guiding instrument for long-term cooperation with no specifics. Seeds and animal breeding were identified as priorities by both the Inner Mongolia story and the Brazilian report.  

An article in Portuguese based on a March virtual meeting claimed that the Chinese company would begin looking for land to grow soybeans, corn and cotton in Brazil in order to expand its global operations. A June 4 article on a Brazilian site hyped the deal as "China Conquering Brazil" and reported that the Chinese group plans to bring "modern irrigation systems, soil management and seeds genetically adapted to extreme environments."

Hulunbuir Group's web site shows that the group is a sprawling web of a dozen companies engaged in crop and livestock farming, food processing and petroleum. Farming is done by hundreds of employees who have land assigned to them.

Farm equipment subsidies get a lot of attention. The site includes a list of more than 800 farms operated by employees and subsidiaries within the Hulunbuir Group that received a total of roughly $1.5 million in subsidies to buy tractors, harvesters, hay balers, planters, and guidance systems ("Bei Dou" China's version of GPS) last year.

Another article last week described John Deere's contribution to modernization of Hulunbuir Group over the last 40 years during a visit to Deere's factory in Tianjin China.  

Hulunbuir farms probably receive subsidies for planting crops. Inner Mongolia's government promises farms will receive subsidies for corn, soybeans, potatoes, a corn and soybean improvement project, and extra subsidies for farms that grow crops on a large scale. One farming company in the Hulunbuir Group mentions receiving a subsidy of about $300 per acre to grow wheat. Despite the massive landholdings, farm equipment, buildings and animal housing shown on the web site, the company's farms and employees receive payments for being located in a "poverty alleviation" area. 

A Chinese Ministry of Agriculture and Rural Affairs article reported in 2024 that 11 of China's state farm companies had 84 foreign cooperation projects in 34 countries. Their overseas holdings included about 384,800 acres of land including 127,200 acres that produced 914,000 metric tons of grain. These projects are meant to serve Chinese diplomatic objectives as well as produce food and other materials like rubber. 

While the numbers sound impressive, the article cited a number of problems. The authors observed that State Farms lack production and management capabilities needed to compete globally, don't enjoy the subsidies and financial support they receive in China when operating abroad, have heavy debt burdens, and lack personnel with international business experience. 

Fourteen years ago, a massive state farm group in Heilongjiang Province called Beidahuang ("Great Northern Wilderness") Group launched soybean ventures in Brazil and Argentina that flopped. Beidahuang is now involved in the expansion of the Santos Port in Brazil. Hulunbuir Group appears to lack international experience. I could not find any evidence of other Hulunbuir Group overseas projects besides the newly signed cooperation agreements. 

The Tianjin State Farm Group's experience in Bulgaria may help evaluate Hulunbuir's foray into Brazil. The Tianjin Group was selected to operate in Bulgaria about 12 years ago as a back door to the European Union that would ship corn back to China and offer technical assistance. In its first year, the Tianjin Group was apparently duped when it was leased worthless Bulgarian land and couldn't communicate with workers. It became engaged in wine and rose fragrance businesses. With a puzzling mix of commercial and technical assistance objectives and volatile corn market, shipments of corn to China have been inconsistent over the years. In 2024 imports from Bulgaria totaled 76,400 metric tons.

We will be seeing Hulunbuir Group and similar Chinese companies in the agricultural space and they should be taken seriously. But no one should expect them to be an unstoppable juggernaut just because they're huge and have pretty pictures, huge buildings and shiny equipment.