Exploring Agricultural Cross-Investment
The Paulson Institute formed the US-China Agricultural Investment Experts Group to explore opportunities and constraints in US-China agriculture-related cross-investment—from successes and failures to potential investment models. What do you see as the biggest investment opportunities and constraints in this area?
Pioneer Hi-Bred International Chair in Agribusiness, Professor of Economics, Iowa State University
China now imports the output of more than 70 million acres of soybeans, cotton, and coarse grains. It had already had an enormous influence on world commodity markets. Given the resource constraints in China and the rapid pace of economic growth, Chinese food imports will continue to grow at a very rapid rate.
Director, Agriculture and Food Sector, McLarty Associates
The U.S.-China relationship is a central part of the future global food and agricultural economy. While other suppliers such as Brazil, the former Soviet Union, and Sub-Saharan Africa are expected to continue increasing production, the United States will likely remain as one of the world’s most important agricultural exporters. On the demand side, China’s growing wealth and limited arable land and water resources have made it into the world’s biggest net food importer. This makes it vital for both countries to work together.
Seth W. Snyder
Section Leader, Argonne National Laboratory; President, Council for Chemical Research
I evaluate this question from the standpoint of advanced biofuels. Advanced biofuels are an emerging industry with strong growth opportunities in both the United States and China. The American advanced biofuels industry is more mature but, due to the growth in fuel usage, China is a larger market opportunity. At the current development stage, both countries will use regional biomass feedstocks to produce advanced biofuels to serve regional markets. Advanced biofuels offer an opportunity for collaboration in technology development and deployment. As we move down the experience curve, production economics will improve in both countries and financing will become more available.
Former President and CEO, U.S. Grains Council
Because of the rapidly emerging middle class, opportunities to increase agriculture and food production, processing, marketing, and distribution abound throughout East Asia, and particularly in China. And regardless of how you calculate this new demand, it is unusually large and unanticipated. Such new demand is sure to generate multiple investment opportunities in new food production and process systems. It is highly unlikely that China and other East Asian countries will simply replicate the development of the commodity-based agricultural and food model so successfully developed by the industrialized world, particularly the United States.