Economy

Baguettes In Beijing? Chinese Investors Eating Up French Farm Land

A Chinese company recently bought nearly 1,000 hectares of French farmland. Pourquoi? 'To put French cereals on Chinese tables,' its owner says.

Coveted fields in Chevagnes, France
Edouard de Mareschal

CHEVAGNES — Since November, 900 hectares (2,224 acres) of land in the central French region of Allier have been acquired by a foreign power. The conquest was carried out without weapons or violence, but in the secrecy of various meetings of Chinese boards of directors at French notary offices.

Why did they do it? What are their plans for the land? To these questions, Mayor Daniel Marchand of Thiel-sur-Acolin — one of the municipalities where the now Chinese-owned estates are located — is waiting for answers. "I can't tell you anything purely and simply because I haven't been told anything at all," he says. "We would have liked to have met the owners, or at least their representatives. For a mayor, knowing what's going on in your municipality is the least you can do."

The new owner is a subsidiary of a Chinese company, Reward Group International. This consortium, whose sprawling activities range from real estate to the production of household cleaning products and food processing, has a very clear goal as far as France is concerned: "To put French cereals on Chinese tables."

Its director, Keqin Hu, boasts that he now owns eight large farms in France. To meet the growing demands of the Chinese middle class, he wants to open a chain of high-end bakeries, all the while controlling the entire industrial process, from harvesting French wheat to opening bread and pastry stalls in China. In his acquisitions, Keqin Hu voices a national imperative: "To develop industry in service of the homeland."

There's more to the acquisition than just short-term industrial and commercial concerns — it's also a strategic investment. "It's a simple equation: China has 20% of the world's population and less than 10% of arable land to feed it," says Christophe Dequidt, co-author of a book entitled Tour du monde des moissons (harvests around the world), which explores the agricultural systems of 15 countries, including China.

"They simply have to look abroad," he adds. "And the French agricultural model is highly valued for its efficiency and know-how."

A huge amount of available capital.

The acquisition of French land can also be a purely financial move, as agricultural engineer Marie-Hélène Schwoob explains. "In a country like China, where growth is written with double-digits, there is a huge amount of capital available," she explains. "Investors, therefore, may be tempted to shelter their assets in bricks and mortar or in land. Not to mention that it also offers opportunities for tax optimization."

The Reward Group International purchase has created quite a buzz in the French media. But the Chinese are by no means the only ones investing in French land. The French do it too, of course, as do Germans, Belgians, Dutch and others. Over the past decade, 20% of France's agricultural land has been taken over by foreign companies, and the trend is accelerating.

Prior to the deal he reached in Allier, Keqin Hu made a similar purchase in Indre, another part of central France. Between the end of 2014 and April 2016, his Hong Yang investment fund purchased several agricultural companies in Châtillon-sur-Loire, Vendœuvres or Clion, for a total area of 1,700 hectares (4,200 acres) of land. For these operations, he can always count on the help of Marc Fressange, a French businessman who founded a company that exports local French products to China.

Everything there still needed to be done.

In the Allier region, the Reward Group International purchase has faced local opposition, in part because of the amount of money involved: between 10 and 12 million euros, by some accounts. While some people say there are too many factors involved to properly assess the per-hectare price, others, like Jean-Paul Dufrègne, a local deputy with the Communist Party, say it was well above the going rate and thus distorts the market for everyone else. "The consequence is simple," he says. "It creates land pressure that makes the land inaccessible to young farmers."

Indeed, the financial operation didn't go unnoticed by local young farmers. Together with his business partner, Jean Taboulot runs a farm with 360 heads of Charolais cattle. But in his youth, Jean used to work for the farmer who sold his land to the Chinese. "I will never speak ill of this man," he says from the outset. "Mr. M. invested in the 1980s, at a time when we needed it. Everything there still needed to be done: drains, irrigation installations."

But, when the owner decided to sell his farm, Taboulot explains, it was impossible for any young farmer to compete. "It's unfortunate, but the banks are no longer doing their job," he says. "They invest crazy sums of money to display their logos on racing yachts, but there's no one left to help a young farmer get started."

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A tribute to the 30,000 Iranian political prisoners murdered in Iran in 1988

Anne-Sophie Goninet, Hannah Steinkopf-Frank and Bertrand Hauger

👋 Laba diena!*

Welcome to Wednesday, where Afghanistan's Taliban demand to speak at the United Nations, China takes a bold ecological stand and we find out why monkeys kept their tails and humans didn't. Business magazine America Economia also looks at how Latin American countries are looking to attract a new generation of freelancers known as "digital nomads" in the wake of the COVID-19 pandemic.

[*Lithuanian]

🌎  7 THINGS TO KNOW RIGHT NOW

• Taliban ask to speak at UN: With global leaders gathered in New York for the 76th meeting of the UN General Assembly, Afghanistan's new rulers say their country's previously accredited United Nations ambassador no longer represents the country, and have demanded a new Taliban envoy speak instead. Afghanistan is scheduled to give the final intervention next Monday to the General Assembly, and a UN committee must now rule who can speak.

• Four corpses found on Belarus border with Poland: The discovery of bodies of four people on Belarus-Poland border who appear to have died from hypothermia are raising new accusations that Belarus is pushing migrants to the eastern border of the European Union, possibly in retaliation over Western sanctions following the contested reelection of the country's strongman Alexander Lukashenko. The discovery comes amid a surge of largely Afghani and Iraqi migrants attempting to enter Poland in recent weeks.

• China to stop building coal-burning power plants abroad: Under pressure to limit emissions to meet Paris climate agreement goals, China announces an end to funding future projects in Indonesia, Vietnam and other countries through its Belt and Road initiative.

• Turkey ratifies Paris climate agreement: Following a year of wildfires and flash floods, President Recep Tayyip Erdogan announced at the UN that Turkey will become the last G-20 country to ratify the emissions-limiting accords. Turkey already signed the agreement in 2016, but has yet to hold a vote in parliament.

• Mass evacuations following Canary Islands volcano: More than 6,000 people have fled the Spanish archipelago as heavy flows of lava have buried hundreds of homes. Four earthquakes have also hit the Canaries since the Sunday eruption, which could also cause other explosions and the release of toxic gas.

• Rare earthquake hits Melbourne: The 5.9 magnitude quake struck near Melbourne in southern Australia, with aftershocks going as far Adelaide, Canberra and Launceston. Videos shared on social media show at least one damaged building, with power lines disrupted in Australia's second largest city. No injuries have been reported.

• The evolutionary tale of tails: Charles Darwin first discovered that humans evolved to lose this biological trait. But only now are New York scientists showing that it was a single genetic tweak that could have caused this shift, while our monkey relatives kept their backside appendages.

🗞️  FRONT PAGE

"The roof of Barcelona" — El Periodico daily reports on the latest delay from what may be the longest-running construction project in the world. Work on the iconic Barcelona church La Sagrada Familia, which began all the way back in 1882 as the vision of master architect Antoni Gaudí, was slated to be completed in 2026. The Barcelona-based daily reports that a press conference Tuesday confirmed that the deadline won't be met, in part because of delays related to COVID-19. Officials also provided new details about the impending completion of the Mare de Déu tower (tower of the Virgin), the first tower of the temple to be completed in 44 years. Although it is currently the second tallest spire of the complex, it will become the highest point of the Sagrada Familia, reaching 172.5 meters thanks to an illuminated "great cross."

📰  STORY OF THE DAY

Latin America, the next mecca for digital nomads

Latin American countries want to cash in on the post-pandemic changes to the fundamental ways we work and live, in particular by capitalizing on a growing demand from the new wave of remote workers and "youngish" professional freelancers with money to spend, reports Natalia Vera Ramírez in business magazine America Economia.

💻🏖️ Niels Olson, Ecuador's tourism minister, is working hard to bring "digital nomads" to his country. He believes that attracting this new generation of freelancers who can work from anywhere for extended visits is a unique opportunity for all. Living in a town like Puerto López, he wrote on Twitter, the expat freelancer could "work by the sea, live with a mostly vaccinated population, in the same time zone, (enjoy) an excellent climate, and eat fresh seafood." For Ecuador, the new influx of visitors with money to spend would help boost the country's economy.

🧳 While online-based freelancers already hopped from country to country before COVID-19, the pandemic has boosted their current numbers to around 100 million worldwide. The Inter-American Development Bank estimates there could be a billion roaming, digital workers by 2050. Some European countries already issue visas for digital nomads. They include Germany, Portugal, Iceland, Croatia, Estonia and the Czech Republic, but in the Americas, only four countries make the list, namely Antigua and Barbuda, Barbados, Panama and Costa Rica.

💰 In August 2021, Costa Rica approved a law for remote workers and international service providers, intended to attract digital nomads and make its travel sector more competitive. The law provides legal guarantees and specific tax exemptions for remote workers choosing to make the country their place of work. It allows foreign nationals earning more than $3,000 a month to stay for up to a year in the country, with the ability to renew their visa for an additional year. If applicants are a family, the income requisite rises to $5,000.


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#️⃣  BY THE NUMBERS

$2.1 billion

Google announced yesterday it will spend $2.1 billion to buy a sprawling Manhattan office building, in one of the largest sales of a building in U.S. history. The tech giant plans on growing its New York workforce to more than 14,000 people.

📣 VERBATIM

It is sickening and shameful to see this kind of president give such a lie-filled speech on the international stage.

— Opposition Brazilian congresswoman Vivi Reis in response to President Jair Bolsonaro's inflammatory 12-minute speech at the UN General Assembly. The unvaccinated head of state touted untested COVID-19 cures, criticized public health measures and boasted that the South American country's environmental protections were the best in the world.

✍️ Newsletter by Anne-Sophie Goninet, Hannah Steinkopf-Frank & Bertrand Hauger

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