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China Agricultural Opportunities. Shandong Province As The Place To Be.

By Dan Harris and Steve Dickinson

I knew it. I knew China's new land reform laws making leasing of farmland easier and potentially more profitable would lead to opportunities relating to agriculture. But it took David Wolf over at the always interesting (you HAVE to check out the string of comments on this post!!!??!) Silicon Hutong and his post, "Why Land Reform is a Tech Opportunity," to explain exactly what those opportunities will be. Wolf sees land reform as opening things up for agricultural technology in China, particularly in the following areas:

* Drip irrigation: China's shortage of fresh water is already bad, and it is going to get worse. Chinese farms will only be sustainable if they use exactly as much water (and fertilizer, and nutrients) as they need, and no more. Drip irrigation is the best, most practical solution today. As aeroponic techniques develop beyond space travel and dorm-room cultivation of cannabis sattiva, they may eventually supplement drip irrigation, but likely only for specialized applications. * Greenhouses and Nurseries: beyond the vagaries of pests and weather, the challenges of China's environment is likely to drive the production of cash crops - not just flowers - into greenhouses. We see a lot of this around major cities and in centers like Kunming, but expect this to expand. This involves more than just covered farmlands: it also means temperature monitors and controls, irrigation systems, air-quality management systems, and harvesting. * mAgriculture: few Chinese farmers can afford laptops, but many more can afford mobile phones to monitor their crops, the weather, and market prices, as well as to take orders, capture opportunities to sell at higher prices, and make payments on supplies and micro-loans. Farmers will need inexpensive yet rugged and waterproof handsets with large buttons, long battery life, and possibly even solar charging capability. They will also need easy-to-use service bundles to include information access and mobile banking. * Training: there is just no way to get millions of farmers into schools. Raising skill levels in new crops, new tools, and agricultural economics is going to involve a combination of traditional low-tech methods and some experimental efforts in using remote training via satellite TV and possibly the Internet. * Finance: once you have the land, you need the cash to develop it and to finance your first crop. Traditional methods of agricultural banking in China, including banks and farm co-operatives, won't be enough. Micro-finance, in all of its forms, can be most economically administered using technology. That doesn't mean a computer on every farm, but it does mean loan officers in rural areas equipped with at least hand-helds to help manage payments and collections.

In addition to technological changes to farming, I also see farming bringing change to China. I predict China's most fertile regions, like Shandong Province, are the most likely to benefit both from land reform and new farming technologies. Shandong is already a very wealthy province (in the most recent PRC statistics, it is listed as the number two province in Gross Domestic Product and number one in fixed investments) and I see its wealth only increasing over the next ten years. If I had to pick one China province to outperform, it would be Shandong.

Full post as published by China Law Blog on November 25, 2008 (boomark / email).