VC and PE favor Chinese new agriculture

Hong Kong (CNS) -- In the context of governmental supports and technology innovation, China's new agriculture sector has become the new darling for venture capital (VC)and private equity (PE), according to a recent report released by Deloitte, an international audit and consulting firm.

The expert analysis says developing the new agriculture sector on the Chinese mainland will both ease ongoing inflation and enhance export competiveness.

In 2011, the central government invested over one trillion yuan in the farming sector, eight times that handed over in 2005. At present, the government regards science and technology as the backbone of an agricultural transformation that will trade its current labor-intensive mode for a scalable business model.

According to data from Zero2IPO, a leading integrated service provider in the VC and PE industry, a total of 180 investment cases were developed in China's agricultural sector between 2006 and 2011. For 2011 alone, 89 VC and PE cases begged for consideration, involving US$1.1 billion.

Long Yongxiong, an expert from Deloitte, said that China's new agriculture sector will move towards standardization and brand building, and at the same time, awareness of food safety will generate more business opportunities. He predicted that more capital will be put into factory farming, biological agriculture and organic fertilizers.