Being a Farmer in Zambia#
#Omnivore
This article is from the WeChat public account: Economic Observer (ID: eeo-com-cn), Author: Liu Xu, Cover image from: Economic Observer (provided by the interviewee)
This article introduces the experience and success stories of Chinese farmer Zhao Yunlong investing in agriculture in Zambia.
• 💼 Zhao Yunlong decided to invest in Zambian agriculture because the political situation in Zambia is relatively stable, there is ample foreign exchange, and the climate and land conditions are suitable for agricultural cultivation.
• 🌾 The return on investment for farming in Zambia is higher than in China, with lower land and labor costs resulting in returns exceeding 100%.
• 🌍 Zhao Yunlong hopes to help more Chinese entrepreneurs integrate into the local agricultural sector in Africa and contribute to local development.
On September 1, 2019, Zhao Yunlong and his team arrived at Kenneth Kaunda International Airport—located in Zambia's capital, Lusaka, with the new terminal built by a Chinese company. When Zhao Yunlong arrived, there were few travelers, and the number of planes at the airport could be counted on one hand. A tractor slowly passed by on the road outside, and across the street stood two billboards: one for the Bank of China; the other for Pepsi, with the English text: Welcome to Zambia.
Zhao Yunlong was part of a delegation from Hebei, China, composed of various businessmen: those in textiles, education, and beef jerky sales, all looking to find new business opportunities. Zhao Yunlong's focus was on agriculture.
Having worked in agriculture for many years, Zhao Yunlong managed about 200,000 acres of land in Xinjiang, but frequent changes in local land leasing policies and approaching yield ceilings prompted him to explore opportunities abroad. During a 15-day investigation, he observed that Zambia's political situation is relatively stable, there is ample foreign exchange that can be exchanged relatively freely, and more importantly, the climate and land conditions here are very suitable for agricultural cultivation: the average temperature is high, crops can be grown three times a year, and 57% of the land is suitable for farming, with land rental prices below 1 RMB per acre, far lower than in China—where rental prices in some regions reach 700 to 1000 RMB per acre.
Zhao Yunlong and his partners decided to invest in Zambian agriculture. He named the nearly 20,000 acres of wasteland project, surrounded by Zambia's "Mother River," the "Zambia Ten Thousand Acres Land Development Project." Tractors from Shandong, China, took two months to cross the ocean and arrived at this land located between the equator and the Tropic of Capricorn, to cultivate thousands of acres of farmland.
The technicians are Zhao Yunlong's old subordinates, spending half of each year stationed in Zambia to solve technical problems, earning an annual salary of 300,000 RMB; while the management staff are mostly local students who studied in China, fluent in Chinese, English, and local languages, managing thousands of local workers.
The "meticulous farming" ingrained in East Asian agricultural genes for thousands of years does not apply here; rather than meticulous farming, it is better to clear and cultivate land, as labor costs are low and large-scale mechanization is not necessary. After two years of planting, Zhao Yunlong calculated that even using relatively traditional farming methods, the return on investment per acre exceeds 30% compared to China.
Zhao Yunlong has decided to focus on Zambia. He hopes to give advice to the Chinese businessmen who are continuously coming to this land seeking opportunities: while reaping rewards from this land, they should also think about what they can leave behind for this land still troubled by poverty.
- Going to Africa to Farm
Before coming to Zambia, Zhao Yunlong had previously invested in Ethiopia. In May 2017, invited by a friend who had been engaged in industrial production in the area for many years, Zhao Yunlong traveled to Ethiopia for an investigation. After the investigation, he believed that the local land prices, resources, and climate were suitable for agriculture, so he contracted a small piece of land. However, soon after, the situation in Ethiopia became turbulent, forcing Zhao Yunlong to withdraw from the African market.
In 2018, while attending an investment promotion meeting for African countries as a guest in Shijiazhuang, Hebei, Zhao Yunlong met Jiang Xuejun, then Director of Asia-Pacific Affairs at the United Nations International Trade Centre. After learning about the various problems Zhao Yunlong encountered while investing in Ethiopia, Jiang Xuejun suggested he consider Zambia.
In 2019, Zhao Yunlong arrived in Zambia, beginning a 15-day investigation.
Standing on land less than an hour's drive from Zambia's capital, Lusaka, Zhao Yunlong looked at the wasteland covered with wild grass, with sparse trees whose trunks generally measured 10 to 20 centimeters in diameter, adorned with lush green or red leaves.
Local people regularly use fire to clear these plants, leaving a layer of ash on the ground. After sampling and testing, Zhao Yunlong found that the ashes contained nitrogen and potassium, and the soil, covered layer upon layer with plant ash, became incredibly fertile, requiring no additional fertilization for years.
Zambia's land area is approximately 4.5 times that of China's Henan Province, with 57% of the land suitable for agricultural cultivation. The average temperature here hovers around 20 degrees Celsius, with an annual average rainfall of 1270 millimeters, allowing for up to three crop cycles per year.
Local groundwater resources are not scarce, with most wells built with aid from other countries, and water can be accessed at a depth of just 5 meters. For 1000 acres of farmland, drilling wells to a depth of 30 to 50 meters is sufficient. Zhao Yunlong recorded in his social media: "The water table in the fields is not deep, and local people can easily fetch water."
Local wells, image source: provided by the interviewee
Overall, this is land suitable for cultivation.
Zambia has abundant labor, ample foreign exchange reserves, and a stable political and social environment—having learned from the lessons of investing in Ethiopia, Zhao Yunlong views a stable political and social environment as the primary condition for overseas investment.
According to the Ministry of Commerce's 2022 guidelines for foreign investment cooperation, Zambia's political situation has been stable for a long time, ranking 4th in Africa in the 2022 Global Peace Index. Zhao Yunlong said: "During the pandemic, many regions in Africa saw people lose jobs and income, leading to some social instability, but Zambia held elections during the pandemic, and life there remained stable as usual."
Zambia is the world's second-largest copper producer. After conducting research, Zhao Yunlong discovered that local people also have a certain level of purchasing power, with no foreign exchange controls in place, allowing currency to be freely exchanged for US dollars. With a large number of Chinese enterprises present, local people also recognize the Chinese yuan. Zhao Yunlong said: "If you need to exchange money, you don't even have to go to the bank; you can just find any supermarket."
Zambian authorities are also very supportive of foreign capital investing in agriculture, listing agriculture as one of the six priority development areas and offering preferential policies in terms of taxation and other aspects.
After the investigation, in November 2019, Zhao Yunlong and his partners invested 8.4 million USD to establish a company named Aipnong in the area.
Corn seedlings, image source: provided by the interviewee
- The Era of Land Development
Acquiring land is the first step for agricultural entrepreneurs venturing abroad, and it is often the most difficult step. In 2017, when Zhao Yunlong invested in Ethiopia, he encountered the situation where the land he purchased was resold to others.
A report from the Institute of West Asian and African Studies at the Chinese Academy of Social Sciences indicates that Zambia has two basic forms of land ownership: leasehold land ownership and traditional land ownership. Approximately 94% of Zambia's land is under traditional land ownership, meaning it is governed by tribal chiefs.
Zhao Yunlong explained that typically, a lessee would find a chief through an intermediary, negotiate rent and area, and then take the chief's permission to apply to the land bureau. The government would send staff to supervise the land measurement, fully record the coordinates of the leased land, and upon confirmation, issue a land certificate. The lessee would then transfer the land to the company's name.
Many intermediaries claim to have channels to help expedite the land certificate process but require an upfront payment of 10,000 or 20,000 RMB for "facilitation," and later will repeatedly ask for funds under the same pretext. Some intermediaries engage in multiple transactions for the same piece of land, causing buyers to compete against each other.
Zhao Yunlong mentioned that there was a manager sent to Zambia who, seeing the local market potential, raised over 20 million RMB to invest in agriculture, but due to unfamiliarity with the procedures, lost everything during the land leasing process.
Zhao Yunlong was fortunate to take over a ready-made 20,000 acres of land from a friend, avoiding the complex procedures. This land is located in a northern province of Zambia near the Zambezi River, consisting of 17 plots, with a lease term of 99 years, and the documentation recording the coordinates is 20 centimeters thick.
The average cost of this land is less than 1 RMB per acre per year, but it is almost wasteland, so Zhao Yunlong needs to start from scratch to cultivate and build.
Tractors performing deep plowing operations, image source: provided by the interviewee
Three 2604 tractors were packed into containers, departing from Shandong, arriving at the port of Tanzania after a month of sea transport, and then taking another month of land transport to reach the development site—due to the lack of maintenance, the efficiency of the TAZARA Railway built with Chinese aid in the 1960s is low, so transportation from Tanzania to Zambia mainly relies on road transport.
Due to the large area of land, Zhao Yunlong chose to develop it in sections, dividing the nearly 20,000 acres into zones, using machinery to complete the cultivation of the first section before moving on to the second, thus saving a significant amount on machinery purchase costs.
After clearing the vegetation from the land, the tractors entered to further develop the land. The uncultivated land appeared bluish-gray, with the tractors equipped with plows leaving behind tracks and furrows.
- A Different Way of Farming
Zhao Yunlong's "initial setbacks."
At the beginning of 2020, just as Aipnong was established, the pandemic hit, causing numerous flights to be suspended, and personnel movement became difficult. It wasn't until December 2020 that someone arrived in Zambia to begin some preparatory work, and it wasn't until June 2022 that the company resumed operations.
After the pandemic, he observed some changes in the local area. On one hand, due to the large number of businesses shutting down during the pandemic, job opportunities decreased, and labor prices continued to drop; previously, labor compensation was about 50 USD per month, but after the pandemic, some laborers indicated they would work for as low as 10 USD, and some even offered to work for food only; on the other hand, many local farms ceased operations during the pandemic, raising concerns about food security, prompting the government to pay more attention to agricultural production.
Zhao Yunlong's farm requires 5,000 labor operations locally each year, providing numerous job opportunities. In processes like harvesting, Zhao Yunlong also prefers to use manual labor. "The quality of manual harvesting is also better," Zhao Yunlong said.
With wide land, suitable climate, and lower labor costs, farming in Zambia is a completely different approach compared to China.
When Zhao Yunlong was in China, he operated an agricultural company in Xinjiang: Xinjiang Dubang Biotechnology Co., Ltd. The company managed about 200,000 acres of land in Xinjiang, achieving automatic fertilization and irrigation, with harvesters equipped with GPS navigation. Once the route is set, a series of farming tasks can be completed automatically, requiring almost no human involvement.
Zhao Yunlong noted two significant characteristics of farming in China: one is mechanization replacing labor, and the other is meticulous farming, pursuing maximum yield per acre.
However, in Zambia, these two approaches are not entirely applicable; first, low-cost labor can replace mechanical farming; second, meticulous farming is far less cost-effective than clearing new land, as there are still large areas of wasteland awaiting development.
When Zhao Yunlong was in Xinjiang, he could achieve a corn yield of 1,500 kilograms per acre, but this typically required significant cost investment for land maintenance and detailed management. In Zambia, using the simplest methods, with three crop cycles a year, yields can reach 600 to 700 kilograms per acre. "Instead of spending time on meticulous farming, it's better to clear a few more acres of wasteland," Zhao Yunlong said.
Zhao Yunlong calculated that the return on investment for farming in Xinjiang is about 70%, but in Zambia, due to lower land and labor costs, the return on investment exceeds 100%.
Zambia has abundant ultraviolet light, and the temperature and humidity are suitable for storing corn, eliminating the need for drying. The local demand for food is high; for corn, it can be stored for up to two months before distribution to local food departments and mills, without requiring extensive storage facilities. Zhao Yunlong said: "If you don't pursue futures prices, food can be sold at any time."
Zambia is a country suitable for farming but still faces food shortages. However, due to a lack of machinery, tools, and technology, local agriculture is underdeveloped. According to Zhao Yunlong, many locals also rent out half of their land, using the rental income to purchase machinery to farm the other half.
Due to a lack of skilled technicians, Zhao Yunlong's farm needs to bring in technical personnel from China, including a technician responsible for machinery maintenance, a planting planner, and a specialist in pest and disease control. The three technicians are around 50 years old on average, having worked with Zhao Yunlong in agricultural production for many years, and they come to Zambia for about six months each year, earning an annual salary of 300,000 RMB.
Due to the large workforce, Zhao Yunlong chose to have locals manage locals. Most of the management team consists of Zambian students who studied in China, fluent in Chinese, English, and local languages. Zhao Yunlong offers them a salary of about 3,000 RMB per month, which is a good job in Zambia, where the average daily income is less than 30 RMB. Job opportunities are scarce locally, and many returnees struggle to find suitable employment.
Currently, Zhao Yunlong is also sponsoring two Zambian students studying in Changsha, hoping to train them as part of the company's management team.
- Agriculture Going Abroad
Zhao Yunlong has shifted the focus of his career to Zambia. In his vision, this ten-thousand-acre farmland project will eventually evolve into a large farm that includes livestock farming, agricultural product processing, organic farms, and fertilizer factories.
He stated that, on one hand, domestic operations have become relatively mature, and on the other hand, land leasing policies in some regions of China change every year; previously, leases were for five years, but now they have become annual leases, with rental prices continuously rising to 700 to 1000 RMB per acre, leading to a bottleneck in development.
He observed that many companies that were not originally in agriculture are also venturing into agriculture abroad, including construction companies, chemical companies, and even some technology companies are laying out agricultural plans overseas. A friend of his recently contracted over 90,000 acres of land in Kazakhstan.
He believes that Chinese enterprises have significant advantages in Africa. Due to long-term aid from China, locals are generally friendly towards Chinese companies. "In countries like Madagascar, Mozambique, and Kenya, locals will come over to chat, regardless of whether they know you, and they are very warm." Zhao Yunlong has seen the presence of Chinese companies in some large infrastructure projects. "The 'big brothers' from China also help handle many matters," Zhao Yunlong said.
His ten-thousand-acre land project has received considerable assistance from many Chinese entrepreneurs venturing abroad. Now, he also plans to provide such assistance to other Chinese entrepreneurs. "I am particularly willing to help agricultural enterprises come to Africa. If they have any questions, I am very willing to offer some free assistance, hoping everyone can do better and better," Zhao Yunlong told reporters.
Zhao Yunlong has shared an idea with many people: he believes that official institutions or large state-owned enterprises could take the lead in contracting land locally and then attract domestic companies to invest in agriculture through bidding, which could help companies overcome the most challenging land acquisition hurdles and select a more efficient group of enterprises.
For Chinese businessmen, Africa remains a place of both wealth and risk.
In his years in Africa, Zhao Yunlong has witnessed numerous corruption cases. His driver and housekeeper, a local couple, once planned to steal 10,000 RMB from him. After reporting to the police, the officers told Zhao Yunlong that paying 5,000 RMB could lead to "severe punishment" for them, but Zhao Yunlong quickly waved his hand, saying it was unnecessary.
Zhao Yunlong has also encountered many dramatic wealth stories, such as a Chinese person who was deceived by relatives into coming to Africa for renovation work, only to have their funds taken away, leaving them no choice but to open a small restaurant. Since there are plenty of lobsters and tilapia in the local rivers, he specialized in selling lobsters to Chinese customers, with daily sales exceeding 30,000 RMB during peak tourist seasons.
However, Zhao Yunlong believes that more important than seeking wealth is how Chinese enterprises can integrate locally and contribute to local development.
"You must let them know that we are only temporarily here, and the value we create is ultimately to benefit the locals." He recounted a story where a business associate mentioned in a meeting with the local agricultural department, "I bought your land for 99 years." The local agricultural department immediately corrected him, "Our land belongs to the state, not for sale; you are only leasing it for investment purposes, please be mindful of your wording." Zhao Yunlong said: "Indeed, you may lease it for 99 years, but it is still their land."
At the beginning of 2020, Zhao Yunlong donated 25,000 masks to the local community. After learning about this, Jiang Xuejun, then Director of Asia-Pacific Affairs at the United Nations International Trade Centre, sent him a written thank-you note.
The local working habit is to work for one or two weeks and then quit, waiting until the money runs out before starting again, so most companies pay weekly. Additionally, there is a large floating population. To address this, Zhao Yunlong built dormitories and a cafeteria on the farm and collaborated with the local Confucius Institute to establish a primary school, hoping these facilities would allow locals to work long-term on a single farm.
"They have taken root here, have work to do, and land to cultivate. In the end, I will also tell them that after they have farmed for many years, I will give the land to them for free," Zhao Yunlong said.
Living area established for employees by the company, image source: provided by the interviewee
This article is from the WeChat public account: Economic Observer (ID: eeo-com-cn), Author: Liu Xu