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We've heard it more than a few times before: you have to go to China to know the real China. Accurate information is hard to come by since so much is suppressed or not readily available. China's hybrid rice miracle, for instance, looks a lot different from the perspective of the average Chinese farm than what you read in the People's Daily. We found this out during a recent trip to Yunnan and Sichuan provinces. If you're a scientist like the hybrid rice godfather Yuan Longping, who has a great personal stake in it, you won't admit it. Not especially if the Chinese government keeps pouring money into its development. Not when other Asian governments like Vietnam and Philippines are still convinced that growing hybrid rice is key to meeting food security. So it remains a dark secret, not to be uttered in polite company. Even IRRI – the once-leading proponent of developing hybrid rice for the tropics –appears to be silently downgrading its support. In its 2007-2015 Strategic Plan “Bringing Hope, Improving Lives” hybrid rice is hardly mentioned. Maybe IRRI's dropped its work on rice hybrids in favour of genetically engineered ones?

China certainly plays a different game. Where hybrid rice has the potential to take root (in the case of Africa and East Timor) or already enjoys government endorsement (like the Philippines and Vietnam) – it wastes no time cutting deals left and right, getting billions of dollars of investments ready, expanding the range of hybrid crops (especially ethanol sources) and capturing the market with Ninja-like precision. So far, most governments are happy to comply.

For instance, on January 15, 2007, the Philippines government signed over 1 million hectares of the country's agricultural lands to a Chinese corporation for a project that involves hybrid rice. Yes, 1 million hectares! The company will use these lands to grow maize, rice and sorghum hybrids for production of ethanol that will be exported to China. We wonder why no one's giving any fuss, much less local resistance, to such a ludicrous prospect? To start with, its a great irony that the Philippines' government can suddenly offer such a huge tract of the country's scarce agricultural lands to its energy hungry neighbour, when it's been so bad at redistributing lands to its own farmers under the 16 year-old Comprehensive Agrarian Reform Program. For a detailed look at how miserably this program has failed Filipino peasants see this 2004 report from Bulatlat. The biofuel project also makes a joke of the government's supposed commitment to self-sufficiency in staple cereal production—one of the things that hybrid rice was supposed to bring to the country. Last we checked, rice imports are expected to hit 1.73 million metric tonnes in 2007, up from a high of 1.65 million MT in 2006.

Let's put this biofuel project into perspective. Food grains are currently produced on 4.01 million hectares in the Philippines. So the project is talking about 25% of the overall food grains production (essentially rice and maize). In the media, the proponents have been careful to only mention idle lands, but, if the one million hectares figure is to be believed, then this will have to come almost entirely from diverting or converting existing production, since there's only a total of 1.2 million of acres of land classified as alienable and disposable spread out across the country that are not already in agricultural use. Unless of course the government's plan is to piggy back it with the country's agrarian reform program, a highly complex program full of loopholes that look more designed to circumvent rather than implement.

Under the program, lands are redistributed to farmers under the proviso that they will make it productive within a span of five years. Failure to do so reverts the land ownership to the State, or the former owner 'salvages' the situation by buying back the land. Even before their lands get redistributed, landlords normally coerce their tenants into all sorts of farming arrangement giving the landlord leeway to convert the use of land (e.g. industrial use) and therefore exempt it from the agrarian reform program. This explains why 800,000 hectares of agricultural lands were converted to other uses in the first 16 years of the agrarian reform program. It's highly likely then that the lands for the Chinese biofuel projects are going to be secured through this same loophole, creating a terrific opportunity for rich landlords to keep their haciendas while robbing the Filipino peasants of their long-awaited access to land

This project is going to have an enormous impact on local food markets as well, creating even greater dependence on imports of staple crops. China's not prepared to let this happen on its own territory. Indeed, the whole reason for China's bullish foreign investment in biofuel production is that it doesn't want to jeopardise its internal food supplies. "We have a principle with biofuel: it should neither impact the people's grain consumption, nor should it compete with grain crops for cultivated land," said Yang Jian, director of the development planning department under the Agriculture Ministry.

China's newfound craving for biofuels is not pie-in-the-sky stuff. These are big projects, with big impacts. The China National Offshore Oil Co signed a $5.5 billion investment agreement with Indonesia involving the conversion of 1 million hectares (there's that magic number again) on the islands of Kalimantan and Papua to oil palm, sugarcane and cassava crops for biofuel production. The Philippines deal involves a $3.83 billion investment by China's Fuhua Group, a Guangdon-based corporation that owns the world’s second largest corn processing facility.

Those dollar figures may be highly exaggerated. In the case of the Fuhua deal with the Philippines, it covers a period of 25 years, under which Fuhua has proposed, under a build-operate-transfer-scheme, to construct a "corn processing industrial garden", (involving a feed mill, brewery, and "crispy food factory"), an "animal product processing garden" and slaughtering plant, and even a "biological medicine producing garden". There doesn't appear to be anything in the MOU signed with the Philippines government that holds Fuhua to investing this $3.83 billion. On the Philippine side of the deal, however, the complete 1 million hectare land conversion is set to take place within three years.

The deal with Fuhua is part of a larger package of 19 agribusiness agreements singed by China and the Philippines during the ASEAN Summit, said to be worth US$4.9 billion and to cover 1.2 million hectares of land. All-in-all, five agreements for ethanol projects were signed. Three of them involve Nanning Yongkai Industry Group of China's Guangxi Zhuang Autonomous Region, including a joint venture with One Cagayan Resource Development Center Inc to produce 150,000 liters of ethanol per day from an initial 40,000 hectares of cassava and sugar cane crops.

There was also a memorandum of agreement (MOA) signed between the China National Constructional and Agricultural Machinery Import and Export Corp. (CAMCE) and Palawan Bio-Energy Development Corp.for a similar bioethanol plant capable of producing at least 150,000 liters a day and another MOA with the Beidahuang Group, the largest agricultural investor in China, for contract growing arrangements for some 200, 000 hectares of rice and corn and an estimated 40,000 hectares for cassava and sorghum to serve "a modern agricultural facility and bio-ethanol plant ' that the Chinese company plans to build in the North Luzon Agribusiness Quadrangle (NLAQ).

The Agriculture Secretary of the Philippines, Arthur Yap, who is also the official "development champion" of the NLAQ, said another $ 120 million agreement with Beidahung would soon be signed covering the development of all-weather greenhouses in the NLAQ for the production and export of cut flowers and off-season vegetables and fruits to Japan, Hong Kong and Taiwan.

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Details of the Fuhua biofuels project:

-The main players are the China Development Bank, the Fuhua Group of China, Sterling Paper (a Filipino company that owns the seed company SL Agritech Corp), and the Philippines Department of Agriculture.
-Fuhua and Sterling Paper have set up a corporation to manage the project, called the Philippine Fuhua Sterling Agricultural Corp (PFSAC).
-There are also important local government partners, such as Camarines Sur Governor Luis Raymund F. Villafuerte, Isabela Governor Grace Padaca, and Nueva Ecija Governor Tomas N. Joson III, who have already visited Fuhua in China and made land available to the company and Sterling for hybrid corn and rice seed development and multiplication
-The project will utilise Chinese hybrid corn, sorghum and rice, sold by SL Agritech.
-The Fuhua Group of China and SL Agritech Corp already initiated construction of a technology demonstration and industrial processing facility in June 2005 and a similar facility in June 2006 at the Sterling Technopark in Silang, Cavite. “This will be the first of 500 technology and demonstration processing sites that Fuhua Group of China and SL Agritech will put up in the Philippines over the next five years,” said Henry Lim Bon Liong, President of Sterling and SL Agritech Corp.

Hybrid rice and China's expanding empire (Part 1)