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Financing agriculture: Chinese fund buys farmland in France

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The acquisition by a Chinese company of 1,700 hectares of farmland in the Indre region, in the heart of the French cereal basin, is causing concern among Berry farmers and the authorities responsible for rural development.
 
A Chinese management fund based in Hong Kong has bought three cereal farms in the past year, representing 1,700 hectares in the department, the president of the FDSEA of Indre, Hervé Coupeau, told AFP Wednesday, confirming an information revealed by the Journal de l'environnement.
They go to the operator who is on the verge of bankruptcy and ask him how much debt he has. Then they ask for the farm to be converted into a Société agricole (SA) and buy back 98% of the shares.« he says.
 
The purpose of this enterprise today" is to acquire land for development and not to lease them out," Emmanuel Hyest, president of the National Federation of Safer (Societies for Land Development and Rural Settlement), an organization attached to the Ministry of Agriculture, told AFP.
 
According to Le Figaro, the Chinese Fund, called Hongyang, specializes in equipment for service stations according to its website. 
For Emmanuel Hyest, it is the sign of a "financialization of agriculture", with a fund that invests where it thinks it's going to be most profitable...« a " new and important phenomenon "in France, but which is the subject of" major world maneuvers« s, particularly in Africa and Southeast Asia.
 
These acquisitions have several drawbacks from the perspective of the profession.
On the one hand, the company paid per hectare, estimated at 4,000 euros in the department, " much more expensive than the market price« which implies a " genuine risk of destabilisation« This is double the real value," explains the president of the FNSafer, who refers to a doubling of the real value.
On the other hand, it allows them to pass under the radar of the FNSafer as the latter is notified of all agricultural land that is for sale so that it can exercise its right of pre-emption if necessary when the project requires it, but only when it is held directly.

A loophole

However, a loophole was discovered three or four years ago: it makes it possible to sell part of the shares held in a farming company that includes land. « We are notified, but we can only intervene if 100% of the shares are sold.« Mr. Hyest explains.
 
Neither the Commission des structures nor Safer has the legal means to ensure that the acquisition project meets public policy objectives.« The FNSafer, in a press release, expressed its concern.
This is not the first time this martingale has been used, " but this is the first time that foreign actors, in this case Chinese, are using it and on a very large surface."
 
The objective pursued by this group is "at the antipodes" of the mode of agriculture promoted by France, according to the FNSafer. « No installation is planned, but simply the installation of employees; no involvement on the territories is possible on this scale, no short circuit is envisaged since the production is intended for export.« adds the FNSafer.
 
After the farmers left, it was employees who settled on this land to grow cereals, and if the first harvest was sold to the cooperative, "... the first crop was sold to the cooperative. as soon as they have enough volume, they'll be able to get to the port on their own... "sell the grain for export," says Coupeau of the FDSEA.
 
The Chinese company is now "in talks to acquire a fourth operation," he adds.
 

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