China's red tape trips up farm firms bringing crops home

Chinese companies farming abroad are having trouble selling the food they produce back home because of a web of domestic rules, a report has revealed.

China is buying more farms overseas to cope with its growing food insecurity but tight import quotas, strict animal and plant quarantine rules and heavy taxes have made it difficult for the produce to be sold back to China, according to the report produced by two Ministry of Agriculture researchers and published in Issues in Agricultural Economy.

Quarantine authorities allowed imports of rice from Thailand, Vietnam, Cambodia, Uruguay, and Pakistan, but not Russia and other regions, where many Chinese companies were planting the crop, the report said.

The researchers collected data from 36 firms with offshore agricultural projects last year and found that many would have to buy import quotas from other companies to ship the crops they grew overseas back to China.

"Most of the businesses involved in growing crops are having difficulty getting import quotas, while some companies that have already been given the quotas have yet to start their overseas projects," the report said.

In one case, Heilongjiang-based flour maker Beidahuang Fengyuan bought a farm to grow wheat in Australia in 2011. The company had the capacity to process more than 400,000 tonnes of flour a year but it was only allowed to import 3,000 tonnes of wheat into China in 2012 - not nearly enough given that 100 tonnes of wheat can yield up to 90 tonnes of flour.

Another Heilongjiang company growing soybeans in Russia said logistics costs and taxes wiped out any profit from shipping the crop back to China.