Private equity investment in agribusiness on the mainland may reach US$800 million this year, according to state-approved agriculture consultancy Beijing Orient Agribusiness Consultant (BOABC).
Huang Dejun, general manager of BOABC, has forecast robust growth in agribusiness in the next 10 to 15 years. In 2010, private equity investment in agribusiness reached US$500 million.
In addition, Hu expects US$3 billion in investments will come from within the agribusiness sector itself to integrate and expand their assets, as the sector is going through a structural change towards a modernised, upscale and corporate model.
'In the past two years, more capital has been invested in the primary production of agricultural products, like acquiring arable land, for instance,' Huang said. 'Before, investment used to focus on pre-production and post-production assets.'
Most capital investment is happening in the southern and eastern regions, Huang said, because of the presence of a larger pool of capital.
Du Zhixiong, vice-director of the Rural Development Institute of the Chinese Academy of Social Science, said the government generally encouraged the transfer and integration of arable land in order to increase the scale of production. But so far only local companies are allowed to be directly involved in land deals.
It will also keep an eye on investment activities in the lower stream of agriculture production, Du said, particularly food storage, processing and distribution, to prevent speculation.
