Guest post: An Agricultural Going-Out? The Case of Russia’s Far East

This is a guest post by Jiayi Zhou (Institute of Social Studies, The Hague), who has done research on Chinese in the Republic of Georgia and is preparing to write a PhD dissertation on Chinese “land grabs” in the Russian Far East. Her literature survey has come up with some fascinating information on this little-known subject.

Agriculture, though one of the target sectors of China’s Going-Out policy, remains a very small portion of Chinese OFDI (0.82% in 2010) and lacks any macro-level strategy. Amidst concerns over the world-wide “land grabbing”, China’s NDRC has tried to make clear that overseas agricultural projects and land acquisitions are not a part of its national food security strategy. But though China does remain largely food self-sufficient, it has become increasingly dependent on imports of soybean and livestock feed, and still faces pressing challenges of limited water resources, environmental degradation, and urbanization. But currently, according to Remin University’s Zhu Xinkai, agricultural investment abroad reflects more the “individual behavior of enterprises.” Now whether or not they have strong state backing, the presence of Chinese agribusinesses in Africa, Southeast Asia, and Latin America has been keenly noted by western media. Very little attention however has been paid to Russia, a fascinating case which might add much to analysis of the actors, motivations, and character of China’s so-called ‘Agricultural Going-Out’:

Russia borders China’s northeast, has vast amounts arable land lying idle, and is suffering from demographic decline and labor shortages – particularly in Siberia and the Far East. In recent years, Russia has been eager to stimulate foreign investment and agricultural production there, evident at the 2012 APEC summit, which was hosted in Vladivostok, and whose theme Russia chose to be global food security. Russia’s land-demography dilemma is the exact opposite of China’s, where in at least in one small village named Sunrise (太阳升村)in Heilongjiang province, peasants are grumbling about the ‘人多地少 ’  [too many people, not enough land] issue (see full story; Sunrise Village, in Dongning county, has only 1000 mu (67 hectares) of land for over 400 people. According to the source, as of 2011 it had some 50-60 villagers operating farms in Russia and even more going abroad as hired help). Chinese agribusinesses also have similar complaints, constrained as they are by village ownership rights – the Household Responsibility System – from easily acquiring large and contiguous plots of farmland (see Zhang and Donaldson 2010). Such factors can at least partly explain the phenomenon of Chinese agribusinesses, entrepreneurs, and peasants crossing the border into Russia to farm – where land is not only abundant, but also cheap.

Some of the larger-scale Chinese agricultural investment projects in Russia include that of Dongning Huaxin Group, with 40,000 hectares (ha) in Primorsky Krai; branches of the Heilongjiang Land Reclamation Bureau, which had some 80,000 ha in Russia’s Far East at the end of 2011; Baoquanling Far East Group, with over 6000 ha; among others (source).  Dongning Huaxin Group and Beidahuang Group have also collaborated to set up a ‘Friendship Farm’ which hopes to reach 200,000 ha by 2016. Larger businesses usually lease large plots of land (for up to 49-years), often in joint-ventures with Russians, and grow mainly soybean and grains, with some livestock projects as well. Export back to China seems to be the goal, but many of the afore-cited sources mention that due to shipping costs, tariffs, and a general lack of policy support from China, much of the production is still sold on the Russian market (source, source).

Nested within large-scale land deals are also small- and medium-sized enterprises, so-called ‘family farms’ [家庭农场], and individuals who cultivate through sub-leases and contracts. Wutong River Farm, for instance, which had “surplus labor, idle machinery, advanced planting technology – but no more available land on which to plant” signed an land concession agreement with Dongning Huaxin Group in 2010, for 3,000 ha of land near the city of Ussuriysk. There are also even smaller-scale Chinese ‘family farms’ which dot the landscape of Russia’s countryside, many of which operate independently and grow greenhouse vegetables for the local markets. One source even reported that Chinese farmers provide some three-fourths of the local vegetables in Russia’s Amur region.

When and how precisely this “farm panning” [种地捞金] rush began is unclear. One official suggests somewhere around the year 2000 (the first intrepid few from Sunrise Village to go farm in Russia left in 1998). According to the Heilongjiang Academy of Social Sciences, the farming boom in Russia is strongly correlated with the rise in the two countries’ cross-border trade (source). No credible statistics about Chinese agricultural activities abroad are collected at the national level, but some local governments have been keeping track: according to what is hopefully a reliable news report published in 2011, Dongning county’s official data showed that locals and locally-based businesses had concessions amounting to over 200,000 ha of land in Russia, with some 160,000 ha actually in development. For some perspective, Dongning county’s own arable land amounts only to some 50,000 ha. The city of Heihe’s data showed that as of 2011, Heihe businesses and persons had contracted some 60,000 ha of Russian land, with 40,000 ha in development.

Situating Chinese agricultural activity in Russia within broader discourses about China’s Going-Out and foreign economic activities, as well as global ‘land-grabbing’, will of course require deeper and more conceptual analysis – but it’s clear that the case of Russia’s Far East has much to add to the debate. Certainly, this is not the caricaturized case of a ‘weak’ state subjugated by a rapacious economically dominant one (a rather unhelpful framework; see Danielle Tan 2012). And it also does not seem that Chinese agricultural investments negatively contribute to local Russian food security or siphon off jobs – in fact, the opposite may be the case (see Anatolii M. Shkurkin 2002). Layered upon this are also Russia’s domestic politics and geopolitical considerations, which have resulted in policies towards Chinese investment and migration that are ’tangled and fickle’ to say the least.  In September 2012, the Minister of Development of Russian Far East Viktor Ishayev outright stated that in the field of agriculture, Russia prefers cooperation with Japan and South Korea to working with China. In 2013, Chinese agricultural workers have also been effectively banned from working in certain areas (the Amur and Krasnoyarsk regions, among others) for use of harmful chemical additives.