Venture Capital Rushes to Go in for Agriculture under the Promotion of Policies


Global financial crisis made Venture Capital encounter an unprecedented winter season, but it cannot kill its nature as a capital hunter. As Chinese government increased its support to agriculture, VC found the opportunities and upsurged a wave of agricultural investment.

Agricultural Investment Chances Emerge

"Central First Document" published on February 1st attracted people’s attention to agricultural issues, which have been six successive years since 2004 and attracted the longest attention of top deciders.

In the document, Chinese government raised to increase direct subsidies to peasants on the basis of last year, enhance subsidy standards covering paddy, wheat, corn and cotton, and enlarge the subsidy scopes of oilseed rape and soybeans.

To prevent ineffective implementation, the document has stipulated the actual means, proposed financial policies of governing cities and counties by provinces, covered food, oil, cotton and pork production into rural reform and reduced intermediate links in cities. In addition, perfecting the market of transfer the right of rural land contracting was first proposed.

Guoyuan Securities and Sealand Securities published research reports respectively that it will have more chances in agriculture with the strengthening of policies of supporting agriculture and benefiting farmers. Guosen Securities forecasted that parties should pay more financial and political support to fulfill the requirements of the document and a series of policies centered on “stabilizing food production, increasing revenue, intensifying infrastructure and weighing human’s living standards” would be issued in 2009.

 “To develop modern agriculture, fasten structure adjustment and escalate industrial structure will be the key contents of China’s agriculture construction in a quite long period. For those local VC familiar with Chinese culture and those foreign VC with rich experience, it’s the right time to invest,” ZeroIPOGroup thought.

VC Floods into Tianyuan

As the policies were published, VC institutions began to step forward in agricultural fields and lots of capitals flooded into Tianyuan during recession.

When the institutions began to invest in these sectors, Jiuding Capital has invested 30 million yuan in Qingdao Sanchuan, 70 million yuan in Jiangsu Huifeng and 80 million yuan in Guangxi Tianyuan, totaling 200 million yuan.

A few days ago, dozens of renowned VC institutions attended an agricultural forum held in Beijing, showing more enthusiasm than agriculture enterprises. “The increasing support of Chinese government against agriculture will make public and private resources fully use and strong industrial acceleration be caused,” said Zhongyi ZHAO.

A report of ZeroIPOGroup showed that Chinese agriculture has not only drawn the curtains of industrial update and integration, but also brought many investment chances under the pressure of international competition. At present, agriculture requires considerable funds, but the traditional agricultural loading mode and governmental subsidies cannot meet the requirements.

Hence, the governments strengthen the support and subsidies to agriculture, and encourage rural primary institutions, township enterprises and peasants to raise funds themselves. It has been stipulated in Catalog of Industries for Foreign Investment to guide foreign capitals to modern agriculture, etc. One of the main tasks of utilizing foreign capitals during the Eleventh Five-Year Plan is to encourage foreign businessmen to develop china’s modern agriculture.