Update (9:21 a.m. ET): Ukraines KSG Agro released a statement today, Sept.

24, denying reports that it had reached an agreement to sell 3 million hectares to a Chinese firm. Hong Kongs South China Morning Post had reported a deal between KSG Agro and Chinas Xinjiang Production and Construction Corps, (XPCC) in which China would be able to farm the area for up to 50 years. The paper cited a statement from XPCC as the source of its report. Quartz and other media also reported on the story. + In its statement, the Warsaw-listed agricultural firm said that it is only working with its Chinese partners on a project to install drip-irrigation systems over an area of 3,000 hectares in Ukraine next year. KSG Agro does not intend or have any right to sell land to foreigners, including the Chinese, the statement posted on their website said. Chinas XPCC could not be immediately reached fo r comment. + Original (September 23): China has inked a deal to farm three million hectares (paywall), or about 11, 583 square miles of Ukrainian land over the span of half a centurywhich means the eastern European country will give up about 5% of its total land, or 9% of its arable farmland to feed Chinas burgeoning population. + Under the deal between Chinas Xinjiang Production and Construction Corps, or XPCC, and KSG Agro, an Ukrainian agricultural company, crops and pigs raised in the eastern region of Dnipropetrovsk will be sold at preferential rates to two Chinese state-owned grain firms. The project will launch with 100,000 hectares and eventually expand to three million. Heres some context on what that looks like: 1

The deal comes after Ukraine lifted a law barring foreigners from buying Ukrainian land last year. As part of the deal, Chinas Export-Import bank has given Ukraine a $3 billion loan for agricultural development. In exchange for its produce, Ukraine will receive seeds, equipment, a fertilizer plant (Ukraine imports about $1 billion worth of fertilizer every year), and a plant to produce a crop protection agent. XPCC also says it will help build a highway in Ukraines Autonomous Republic of Crimea as well as bridge across the Strait of Kerch, a transport and industrial center for the country. 1 Critics say the move exemplifies a slew of global land deals that smack of colonialism and resource extraction by richer countries in poorer ones. Today, such deals are increasingly motivated by

governments seeking food security for their citizens, rather than profit-mongering by private companies. Saudi Arabia, South Korea, the United Arab Emirates, Britain, the US and other countries have been buying up foreign farmland, especially after the global food price spike of 2007 to 2008 that spurred global riots. According to a report last year by the nonprofit Grain, the main target of these purchases has been Africa but also Eastern Europe, Latin America and Asia. Between 0.7% and 1.75% of the worlds farmland is being transferred from locals to foreign investors, another study in January found. +

Given its dwindling available farmland and expanding population, China has been among the most aggressive. The country eats about one-fifth of the worlds food supplies, but is home to just 9% of the worlds farmland, thanks to rapid industrialization and urbanization of the formerly agrarian nation. Its deal with Ukraine is its biggest farmland investment yet. Since 2007, China has bought farmland (pdf) in South America, Southeast Asia and Africa. + Some analysts fear the Ukraine-China pair up paves the way for an eventual Chinese takeover of all of Ukraines farmable land. Similar fears about local food security led the government of the Philippines to block a China investment deal; Mozambique has resisted the arrival of Chinese farmers who would have displaced locals. + Others argue the project gives Ukraine the opportunity to boost food exports. Since the breakup of the Soviet Union, the country has been slow to fully privatize and develop its agricultural industry.
Ukraine became independent again when the Soviet Union dissolved in 1991. This dissolution started a period of transition to amarket economy, in which Ukraine suffered an eight-year recession.[13] Since then, however, the economy has experienced a high increase in GDP growth. Ukraine was caught up in the worldwide economic crisis in 2008 and the economy plunged. GDP fell 20% from spring 2008 to spring 2009, then leveled off as analysts compared the magnitude of the downturn to the worst years of economic depression during the early 1990s. Throughout its history, Ukraine has been one of the powerhouses of world agriculture due to its fertile conditions. The country, as of 2011, was the world's third-largest grain exporter and is one of ten most attractive agricultural land acquisition regions.

China's official Xinjiang Production and Construction Corps has signed an agreement with Ukrainian agricultural firm KSG Agro, which would see Ukraine provide 100,000 hectares to China. That would eventually rise to 3 million hectares, the South China Morning Post said. Chinese experts have said China must expand its overseas farming to ensure sufficient food supplies because of its limited land and low productivity. China accounts for a fifth of the global population but only nine percent of its land. Demand for food is rising as incomes rise. The 50-year plan was mainly aimed at growing crops and raising pigs, the Hong Kong newspaper said, citing a statement from the Xinjiang Production and Construction Corps (XPCC). In 2009, China had a total of just over 2 million hectares of farming land abroad, the newspaper said, quoting an agriculture expert. A spokesman at the government-linked XPCC said he was not aware of the statement and did not immediately respond to a request from Reuters for confirmation of the report. China's overseas expansion in agriculture has raised some concern. In June, Australian politicians called for greater scrutiny over farm purchases by foreign buyers. Chinese investors bought up Australia's biggest cotton farm in 2012. China, which has aims to be 95 percent self-sufficient in food, also suffers from fears over food safety after a series of scandals ranging from melaminetainted milk to toxic heavy metals in rice and vegetables.