Development as a Trojan Horse?

The Political Ecology of

Chinese Large-Scale Agriculture Investments in Uganda

Josh Maiyo

Abstract: Chinese engagement with Africa in the agriculture sector has received significant
attention as African countries seek investments to spur agriculture-led growth. Sino-African
agriculture engagement is often analysed through a homogenising narrative of the advance of
agrarian capitalism with Chinese characteristics, while little attention is given to the role of
African agency in structuring these processes and determining their outcomes. This paper
examines how key actors among the Ugandan elites deploy their agency in shaping relations
with Chinese counterparts, structuring the processes of Chinese large-scale commercial
agriculture investments, and managing contestations with local land dwellers. Based on an
empirical case study of the Chinese owned Hanhe farm in central Uganda among others, the
paper analyses the political dimensions and socio-ecological consequences of Chinese land-
based investments in order to highlight the intricately differentiated nature of local agency in
shaping and responding to competing interests and divergent distribution of the benefits of
developmental investment.

Keywords: China-Uganda, foreign land deals, Hanhe farm Uganda, agrarian change

Josh Maiyo is a PhD fellow at the department of social and cultural anthropology, Vrije
Universiteit Amsterdam. His PhD research entailed two years of ethnographic research of
foreign large-scale land deals, agricultural modernization and rural change in Central Uganda
funded by the Dutch Scientific Council (NWO-WOTRO). He is also a research fellow at the
China-Africa Research Initiative of the Johns Hopkins University School of Advanced
International Studies (SAIS-CARI) where he conducts research on political economy of
Chinese engagement in East Africa.
Introduction

Chinese engagement in Ugandas agriculture sector has a long history dating back to the 1970s
when the Peoples Republic of China supported the construction of rice irrigation schemes in
the east of the country (Kannyo, 2014). As in many parts of Africa, initial ideological reasons
underlying Chinas agricultural support in Africa to safeguard strategic diplomatic interests,
have in recent years transformed to encompass South-South development cooperation as well
as the advancement of commercial interests (Brautigam and Xiaoyang, 2009; Buckley, 2013).
Similarly, Chinese state sponsored agriculture projects in Uganda have become more
diversified, ranging from bilateral agro-technology transfer, trilateral South-South food
security programmes, and human resource development training for Ugandan agriculture staff
in China (Hon et al., 2010).

The complexity and diversity of contemporary Chinese agriculture engagement in

Africa increasingly feature a combination of public-private commercial initiatives in which the
role of private Chinese companies is on the forefront (Qi et al., 2015; Scoones et al., 2016).
Research into these emerging structures tend to focus on the motivations for Chinese outward
engagement, driven by shifts in internal agrarian reforms and changing demographics. It is
argued that such drivers include demands for food security in China and the search for new
farmland for rural Chinese farmers displaced by rapid urbanisation (Brautigam and Xiaoyang,
2009; Lulu, 2014). Others emphasize the role of Chinese state capitalism in pushing out
Chinese private enterprises to invest abroad, supported by a commensurate financial and
diplomatic infrastructure (Gu et al., 2016). These drivers are however external to processes
unfolding in individual African countries and may not explain the ways in which Chinese
private enterprises acquire land in Africa, the nature of their commercial operations, strategies
for market access, and overall performance on the continent. This paper seeks to contribute to
filling this gap by centring African agency in the analysis of local access strategies, identifying
land-use change and operational dynamics, and assessing socio-ecological effects of Chinese
enterprises, using the case study of a private Chinese farm in Uganda.

Contextualising China-Uganda Economic Relations

Local Perceptions Towards Chinese in Uganda

The recent appearance of Chinese farmers in the African countryside has raised fears about
foreign takeover of African farmland, amidst concerns over dispossession of local land
dwellers and new forms of colonialism (Hairong and Sautman, 2010a; Aliyu, 2012). Although
subsequent research has attempted to dispel initial fears of massive Chinese land grabs in
Africa (Brutigam and Zhang, 2013; Hofman and Ho, 2012), the entry of Chinese private
investments in Ugandas agriculture occurs within the context of a persistent perception that
the rate of foreign commercial acquisitions of arable land in developing countries is on the rise
(Cotula et al., 2009; Daniel and Mittal, 2009). Concerns over collusion with local elites, the
loss of local land access and resource control, as well as associated environmental effects of
Chinese land acquisitions remain unresolved (Peh and Eyal, 2010; Mol, 2011; Gordon, 2012).

In order to understand local responses to Chinese commercial interests in Ugandas

farmland, it is important to situate the discourse on a wider context of local perceptions about
China and Chinese citizens among the Ugandan population. In 2012, Ugandan traders held
violent demonstrations opposing the entry of Chinese small-scale in the retail market in the
capital Kampala (Businge, 2012). The Ugandan government quickly responded by introducing
stringent regulations raising the amount of capital outlay for Chinese to obtain investment
permits and limiting Chinese merchants to wholesale enterprises only. In the same year, a
detailed study among 500 Ugandan youths in Kampala showed that, although a significant
majority had a favourable view of China-Uganda trade relations, many of them perceived
China as following the traditional path of imperialism (Shen and Taylor, 2012). Prevalent
perceptions in other parts of the continent about Chinese engagement in Africa as an aggressive
and exploitative resource plunder was found to be entrenched among certain sections of
Ugandans as well (Alden and Alves, 2009; Aliyu, 2012; Brautigam, 2012).

The Scale of Chinese Engagement in Ugandan Agriculture

Despite the negative perceptions, initial studies mapping contemporary Chinese investment in
Uganda indicated that the interest of Chinese companies in Ugandas agriculture in relation to
other sectors was comparatively low (Obwona et al., 2007). Using data from the Uganda
Investment Authority (UIA), the study tracked the quantity of registered Chinese companies
by sector between 1991 and 2007. Results showed that Chinese investments in agriculture
ranked fourth after manufacturing, construction and trade; but in terms of overall percentage
of FDI in Uganda it came a distant sixth when energy and mining were included (Obwona et
al., 2007). More recent research on Chinese private and state-owned companies in Ugandas
capital Kampala, showed that while investments in oil and gas, manufacturing, infrastructure,
telecommunications and trade were on the rise, the percentage of investment in agriculture
appeared to be negligible (Warmerdam and van Dijk, 2013a). However, a different survey by
the federation of Uganda employers and Makerere University Business School (MUBS) carried
out in Kampala and three other major towns, showed that over 98.7 per cent of Chinese
enterprises were privately owned and 1.3 percent were state owned, with those engaged in
agriculture steadily rising to about five per cent of the total (Namatovu, 2011).
The variations in the results of the three studies are occasioned by the use of different
methodologies and reliance on different statistical sources, all of which were not conclusive.
The first study was based on data from the UIA, the second drew on information obtained from
the Chinese commercial counsellors office in Kampala, while the third combined data from
UIA and field surveys. That all three studies drew significantly on data about Chinese
companies in Kampala, is a major limitation since they did not cover the rural areas where
large-scale land investments are often located. The disparity of measurements in the studies
also show the difficulty of tracking Chinese investments in Africa due to lack of reliable and
up-to-date data which, as Freemantle and Stevens (2013) found, often leads to misreporting.
The challenge is more severe in research on transnational land deals as most tend to lack
transparency and are often shrouded in deliberate secrecy (Pearce, 2012; Edelman, 2013). For
instance, online databases run by non-governmental organisations, such as the Land Matrix
and GRAIN, that track the scale of foreign land acquisitions have been faulted for using out-
dated, conflicting and inaccurate figures (Oya, 2013; Cotula et al., 2014). In Uganda, fact-
finding field trips conducted at the beginning of this research in 2012 could not establish the
presence of several reported land deals such as a Chinese investment of 4,000 hectares and an
alleged Egyptian governments 800,000 hectares deal cited in the GRAIN dataset released in
February 2012 (GRAIN, 2012). Similarly, a preliminary survey of newspaper articles from
2008 to 2015 mentioning the presence of Chinese land acquisitions in Uganda, found reports
of more Chinese land investments across the country. An example that captured global
headlines, and still resonates many years later, was a reported joint venture between Chinese
and Ugandan investors to build a 10 hectare Free Trade Zone on the shores of Lake Victoria in
the southern district of Rakai (Bindhe, 2011; Sseppuya, 2014). That the failed Sseesamirembe
Lake Victoria FTZ deal is still being reported on by The Economist magazine as late as 2016
(Knowles, 2016), shows that the true scope and nature of Chinese large-scale land deals in
Uganda remains unclear.

Against this backdrop, this research sought to conduct a systematic study of the
dynamics of Chinese foreign land deals in Uganda by exploring the agency of local actors in
negotiating, shaping, and driving specific projects, using the Chinese owned Hanhe farm
Uganda as a case study. As Mohan and Lampert (2013) argue, most studies of Chinese
engagement with Africa tend to focus on China as the driving force, while African agency is
ignored or presented as being passive. This paper therefore analyses the contextually
determined processes underlying Chinese transnational land deals with specific attention to the
agency of the role local actors. It also explores the socio-ecological dynamics of land-use
change and practices of production to assesses the effects of such processes among affected
communities. The analysis draws on empirical data gathered through field research conducted
from 2012 to 2015 in Uganda.

Economic Diplomacy: The politics of Uganda-China Agrarian Engagement

The evolution of political ideologies and economic strategies of Chinese engagement with
Africa have in many ways been presented in a way that puts Chinese agency at the centre of
these changing relations (Jinyuan, 1984; Anshan, 2007; Taylor, 2009). Though largely
discredited, concerns about Chinas changing demographics and dwindling self-sufficiency in
food production have spurred popular perceptions about Chinese outsourcing its production,
hence precipitating a scramble for African farmland (Wang et al., 2008; Brutigam and Zhang,
2013; Brautigam, 2015). Over the last decade consensus seems to have consolidated around a
narrative that a combination of state capitalism and technological developmental outsourcing
is driving Chinas agrarian engagement with Africa (Alves, 2006; Buckley, 2013; Gu et al.,
2016). This argument proposes that Chinas agrarian modernisation offers lessons for Africas
own green revolution through the export of a new agrarian capitalism with Chinese
characteristics (Zhang and Donaldson, 2008; Zhang, Chen and Vitousek, 2013). At the centre
of Chinas renewed African engagement are two mutually reinforcing strategies: Chinas
going out policy of promoting overseas investment and the Chinese-sponsored Forum on
China Africa Cooperation (FOCAC), a diplomatic platform for deepening Chinese economic
diplomacy with Africa (Alden and Alves, 2009; Enuka, 2010; Hon et al., 2010).
The role of African agency at the political and diplomatic level in shaping the form and
outcome of these engagements is largely obscured in discourses of China-Africa relations,
though the gap is increasingly being acknowledged (Keet, 2010; Mohan and Lampert, 2013).
While efforts are now being made to redress this imbalance, the complexity of African state-
level engagement is acknowledged as problematizing a single narrative of African agency, just
as the dangers of a homogenising interpretation of Chinese agency has been pointed out (Dijk,
2009; Power, Mohan and Tan-Mullins, 2012). Emerging studies that seek to fill this gap
recognise and differentiate between structural analyses of rational states and the fuzzy world
of elite interests in structuring Africa-China engagement. In his analysis of bureaucratic agency
in Benin for instance, Soul-Kohndou dispels the notion that dependency on aid and foreign
investment necessarily limits [the states] capacity to bargain effectively and exert influence in
negotiations with China, as well as the assumption that African bureaucracies are ineffective
and passive in their relationship with China (Soul-Kohndou, 2016, p. 2). While analysing the
role of Angolas ruling elite and its dominant MPLA political party, Lucy Corking finds that
Far from being exploited, the Angolan government has effectively managed to harness its
relationship with China to bolster its position, both politically and economically (Corkin,
2016, pp. 12). The rest of this paper attempts to answer the challenge by Ugandan scholar
Edward Kannyo that an effective analysis of Africas engagement with China should be
approached from the inside out through empirical research that goes beyond its portrayal as
a passive subject of external political and economic forces (Kannyo, 2014).

Tracing Ugandas agency in Sino-Ugandan agriculture cooperation

Ugandas relationship with China in the field of agricultural cooperation dates back to the
immediate post-independence era when then President Milton Obote adopted a policy of
African socialism and in 1965 became one of the first African leaders to visit Maos China.
China immediately reciprocated with the provision of grants and credits culminating with the
Chinese construction of two rice irrigation schemes in Eastern Uganda in 1973 and 1987
(Kannyo, 2014). Both projects, involving more than 300 Chinese technicians, entailed the
rehabilitation or complete construction of dams, irrigation canals, development of new rice
varieties, and training of Ugandan farmers. The contours of an aid architecture of technical
training and technology transfer began to take shape with Kibimba scheme being designed as
a technology development centre, while Doho became the centre for seed multiplication and
farmer training (Bayite-Kasule, 2011). These projects were to set the pattern for contemporary
Chinese agricultural technology cooperation with Uganda that include an aquaculture
technology demonstration centre, a tripartite south-south food security programme with the
FAO involving the deployment of Chinese agriculture technicians to Uganda, and training
programmes for Ugandan staff in China.
As in other parts of Africa, the architecture of Chinas agriculture engagement with
Uganda is seen as following a new pattern of Chinese state capitalism of intimate state
business relations characterised by technology-driven modernisation incorporating both state-
owned enterprises and Chinese private firms (Gu et al., 2016; Xu et al., 2016). Ugandas
engagement on the other hand builds on its own economic liberalisation policy and agrarian
modernisation programme anchored in a national development plan that promotes stronger
commercial investment in agriculture to boost productivity and incomes (GoU, 2010, 2011).
As China intensifies its economic diplomacy with Africa, Uganda is positioning itself as a key
strategic partner for the latters going out policy. In the initial stages, bilateral delegations
created a network of state and private sector elites whose mutual interests in agriculture
investments converged to facilitate the formulation of several ventures. Of the nine key areas
of China-Africa agricultural engagement proposed in the 2003 Addis Ababa FOCAC
ministerial conference, Uganda subsequently identified dairy development, fisheries, and fruit
processing as their areas of emphasis. By 2009, specific public and private projects had been
initiated including the establishment of the Kajjansi aquaculture demonstration centre, the
China-FAO special programme on food security, collaborative research in hybrid millet
production, as well as private investments in fruit processing, and supply of agricultural
machinery (GoU, 2009).

Elite agency in Ugandas engagement with China

Uganda has been actively courting Chinese private sector investment in agriculture and
winning significant commitments for both official government support and private investments
from their Chinese counterparts (New Vision, 2016a). Ugandas agriculture minister has been
quoted in the press openly inviting Chinese farmers to acquire abundant land to grow crops
for export (Nakaweesi, 2013). Increasingly, a steady flow of delegations of Chinese private
investors have sought out private investment partnerships including in agriculture (Bariyo,
2014b; New Vision, 2016b). A steady flow of Chinese enterprises in Uganda has further
cemented Chinas position as one of the most sought after sources of much needed FDI for
Ugandas agriculture sector propelled by a determined state-driven programme of large-scale
commercial agriculture reform (Coonan, 2008; Fan, 2011).
Other than frequently sending their own officers and politicians on frequent missions
to China, a key feature of Ugandas economic diplomacy is the deployment of high-level
political capital in attracting and hosting numerous Chinese public and private investment
delegations. Officials on both sides often cite Ugandas geostrategic location as a politically
stable gateway to a vast central Africa market for Chinese goods and industry (China Daily,
2012; New Vision, 2013). Additionally, the full weight of presidential authority is deployed,
as the Yoweri Museveni is often featured in the press hosting Chinese delegations and
personally commissioning public and private projects funded or constructed by the Chinese
(The Observer, 2014; New Vision, 2015). During such occasions, the president exhorts civil
servants to give priority and unfettered access to Chinese investors (New Vision, 2014).
Increasingly, Ugandan negotiating partners are becoming adept at pushing for trade
concessions, manpower development and promoting specific investment portfolios in areas of
critical national priority such as infrastructure, oil and gas, hydropower generation,
manufacturing and agriculture (Daily Monitor, 2014; Bloomberg, 2015). Some of the major
wins recorded in agriculture investment include an extension of the China-FAO south-south
cooperation in agriculture worth US$ 2 million for training and technical advice to Ugandan
small-scale farmers (FAO, 2015). In May 2016, the president and his deputy broke ground for
a 2,500-acre China-Uganda agricultural industrial park operated by Ke-Hong Group from
Chinas Sichuan province (Oluka, 2016). According Ugandas agriculture minister, the
US$220 million agri-business venture is expected to engage in production and processing of
rice, poultry, horticulture, and fish farming. Despite promises by local brokers, it remains
doubtful whether the venture will find the additional 15,000 acres it initially negotiated with
the government in 2014 as some local land dwellers have already complained of being
displaced by the land allocation to the Chinese (Bariyo, 2014a).
Another boost to the countrys potential to improve agriculture productivity came in
2013 with the granting of a major mining concession to Guangzhou based DongSong Energy
Group for the production of phosphate fertilizer (Reuters, 2014). Funding of up to US$240
million was secured from State-owned Industrial and Commercial Bank of China (ICBC) and
South Africas Standard Bank Group. Ugandas energy minister is reported as saying that the
venture was one of the largest privately funded mining-sector investments in the country that
would improve agriculture production and support infrastructure development through iron and
steel production, as well as creating jobs and boosting export earnings through processing of
primary commodities (Solomons, 2016). So successful is Ugandas economic courtship with
China that in the eyes of Ugandas prime minster, China has risen to become the countrys
single most important investor with an investment portfolio worth over US$ 600 million in
the last 20 years, creating more than 28,000 jobs (Ni, 2015).
Ugandas agrarian transformation programme is however not without challenges as it
entails the application of potentially disruptive market-oriented production systems designed
for transforming the subsistence farmer and transforming the agricultural sector in general
(GoU, 1999). The arising consolidation or transfer of large tracts of land to local commercial
or large-scale foreign investors such as the Chinese have the potential to disrupt diverse local
economies, partly oriented to self-reproduction and subsistence, into a monetized, market-
driven economy. Often, such transformations are likely to result in socially disruptive changes
to historically entrenched social practices and ways of life (Escobar, 2006). The transnational
nature of these processes and their effects at the national as well as a localised village level
implies that these agrarian reform programmes entail a variety of multi-layered transformative
changes involving local, national and global political and economic processes comprehensive
scrutiny (Schubert, 2005). One such interrelated impact is on land tenure and ownership
regimes. Uganda has historically had complex and problematic land tenure systems.
Recent research on land issues in Uganda consistently show that the rise in large-scale
land acquisitions in the context of poor land administration systems is exacerbating already
weak land rights (Rugadya, 2009; Mabikke, 2011). On the other hand, the success of
commercially oriented agrarian reform is dependent on the development of thriving land
markets that require extensive tenure reforms that are being pushed by both government and
international development partners such as the World Bank (Bank, 2008; Sebudde et al., 2015).
If not handled carefully, researchers warn that these measures could destabilise an already
fragile property rights regime, leading to increased land conflicts (Bahiigwa, Rigby and
Woodhouse, 2005). In the context of competing policy aspirations for agrarian reform and
economic growth, and demands for the protection of land rights for vulnerable groups, this
paper now makes a detailed exploration of the specific case study of Chinese owned Hanhe
farm, with a view to understanding in what ways these processes unfold and the resulting
effects in specific social contexts in Uganda.

Going out narratives: New frontiers for Chinese agriculture?

Hanhe farm is owned by Hanhe Uganda Limited, a local subsidiary of the Chinese firm Hanhe
International Company that is associated with Hebei province member of parliament, Qiu
Lijun. The farm covers an area of 400 acres (162 ha) and lies approximately 80 Kilometres
north of the capital Kampala. It is located in the rural and largely agrarian local government
district of Nakaseke in central Uganda. During an interview, the wife of the company owner
disclosed that other than seeking new and attractive business ventures, one of the motivating
factors for investing in agriculture was because Mr. Lijun already had experience in
agroforestry and comprehensive agriculture in China, but fierce competition from other
farmers involved in the same enterprises back home forced them to seek new opportunities
abroad. This seems to conform with prevailing narratives about drivers for Chinese enterprises
moving abroad include the transfer of domestic production capability on the back of intense
domestic competition (Gu, 2009).
According to Zhang and colleagues, these factors result from a rapid modernisation of
Chinese agriculture characterised by twin processes of vertical integration that brought
farmers into markets and modern technologies into farming through the creation of dragon
head agribusiness enterprises enjoying preferential state support (Zhang and Donaldson,
2008). On the other hand, as Brautigam and Zhang argue, agriculture became part and parcel
of the Chinese governments going global programme supported by the creation of supportive
financial instruments that were also available for overseas agriculture ventures (Brutigam and
Zhang, 2013). The success of this going strategy is however mixed. Drawing on empirical
research of Chinese agriculture enterprises in Mozambique and the Democratic republic of
Congo, Phillippe Asanzi (Asanzi, 2012) observes that the older and more established
agricultural corporations had a more difficult time establishing a presence in Africa, while
newly created state-owned enterprises (SOEs) and private family firms were more nimble and
able to successfully take root in the African countryside.
While many studies emphasise the push and pull factors behind Chinas going out
strategy, not much attention has been paid to scrutinising what transpires at the conjuncture of
encounters between China and Africa. In essence, what social and institutional mechanisms
characterise the entry process of Chinese enterprises and their access to the domestic land
markets in Africa? Is there a characteristic pattern for Chinese owned projects to gain entry
into the Ugandan market and does the process by which Hanhe Uganda acquired its farmland
follow such a pattern? This section explores these questions by situating the access strategies
of Hanhe farm in the broader dynamics of local agency in Uganda-China relations.
According his wife, the proprietor of Hanhe farm, Mr Qiu Lijun first visited Uganda in
2007 with an official Chinese delegation which introduced him to the country to explore
investment opportunities. It was not until two years later during a subsequent visit in 2009 that
he made the final decision to invest in the country motivated by suitable climatic conditions
and attractive terms offered by the Ugandan government including favourable political support
and reasonable land prices.

When he saw Uganda for the first time, he felt heart love and passion here; he felt the climate
was very good for agriculture farming. Even the country is beautiful and the people are
friendly. We did practical research; saw many pieces of land in Uganda so we could find a
good one for our agriculture farming. [March 23, 2014]
It is not clear whether Hebei Hanhe Investment Company, the Chinese registered holding
company for the local subsidiary Hanhe Uganda Company is one of the larger dragonheads
that could benefit from state support in china. Information available on the Hebei province
chapter of the China Chamber of International Commerce states that the company has access
to its own funds with which it invests in its sole enterprises in Uganda (Hebei, 2014). While
the Chamber of commerce website mentions a figure of 15 million RMB (about US$1.5
million), conflicting reports indicate that its enterprise in Uganda was supported by the China
Africa Development Fund through the China Development Bank (Fan, 2011). A local council
politician who helped facilitate Hanhes entry into the community mentioned during an
interview in 2012 that representatives from China Development Bank had been in Uganda to
inspect the project and had agreed to approved its funding.
They were here, they have inspected Nakaseke farm and it was approved. So one of the
reasons they are coming next week is to see exactly whats already happening on the
farm in Nakaseke. They have already sent officials. I dont know at the moment but I
think its a tentative figure of about 17 million USD. 1

It is however likely that the funding may not eventually have been approved since the
proprietor, who at the time was said to be a member of parliament for Hebei province, was
later reported in the media as saying that he had invested up to US$ 2 Million of his own funds
in the farm in the last five years (Mugalu, 2014). During a subsequent interview, his wife
who was managing the farm also maintained that they had financed the farm entirely from their
own private funds. She reiterated that they were facing severe financial constraints and had
difficulties raising more funds despite numerous attempts. This case sheds light on a popular
assumption that most, of not all, Chinese private enterprises operating in Africa benefit from
state support. In fact, research among Chinese companies in Kampala established that only
8per cent of private enterprises received any kind of state support (Warmerdam and van Dijk,
2013b). Similar findings among Chinese commercial farms in Zambia showed mixed patterns,
with the majority of small-scale farmers reporting that they invested their own funds or a pooled
funds with a few other investors (Hairong and Sautman, 2010b).

1
2012-10-03-interview with Henry Lubega, then self-styled spokesman and co-director Hanhe Uganda
Local encounters: displacement and conflict over access

African agency in its engagement with China is perhaps more pronounced in the process of
land acquisitions for Chinese agriculture in Uganda. An interview with two brokers revealed
that it was almost impossible for a foreigner to acquire land in Uganda without the facilitation
of local intermediaries. One such broker, who profiled himself as a spokesperson and a local
shareholder in the Hanhe Uganda company, claimed to have brought the Chinese to Uganda
and facilitated their access to powerful political elites who paved the way for Hanhes
acquisition of the farm in Nakaseke district.

I am the one who brought the company from China and the other investors. I came
to know about them through their commercial attach. He is the one who gave me
their contacts. The other shareholderthe main guy, is Qiu Lijun. The other
workers dont have shares, they work here on contract and then they leave. We are
only two shareholders 2.

It may well be that in order to gain access to the local market, Chinese investors incorporated
local companies in Uganda with their local fixers being allocated nominal and non-executive
shareholding positions. There is also a pattern emerging that successful Chinese enterprises,
especially those that require land, need the political patronage of the highest office in the land:
the presidency. During an interview conducted at her residence in Kampala, the wife of Mr
Lijun showed me a photograph, prominently displayed on the wall in the visitors lobby, of her
husband meeting with the president at state house in Entebbe in 2011. The stamp of presidential
approval was further expressed when president Museveni visited their farm in Nakaseke to
officially launch the project (Nabakooza, 2014). Similarly, at the ground-breaking ceremony
for the launch of the Sichuan based Ke-Hong Group agro-industrial park in neighbouring
Luweero district, the president, vice president and minister for agriculture among other senior
government officials were in attendance (Oluka, 2016). Interestingly the Ke-Hong Group was
facilitated in its land acquisition by a private brokerage outfit, the China-Africa Friendship
Association-Uganda (CAFAU), whose patron happens to be the vice president. These cases
highlight the intricate web that fudges boundaries between private brokers and state elites and
their mutually reinforcing agency in facilitating Chinese land acquisitions in Uganda.

2
Interview with Mr. Lubega Oct 10, 2012.
 The apparent confluence of elite interests in promoting Chinese agro-investments in
Uganda belies the existence of raptures between different social categories in Uganda. At the
beginning of this paper we presented survey results showing negative perceptions about
Chinese resource extraction in Africa. These sentiments seem to be reinforced when frictions
occur amidst local level experiences of Chinese land acquisitions. Newspaper reports of the
launch of the Ke-Hong Group investment also cite complaints by local land dwellers
questioning the give-away of such large tracts of land to foreigners. While elites champion the
developmental effects of foreign investment and industrial processing, the same article records
concerns raised by local land dwellers about the risks of outcompeting local producers and loss
of access.
Researchers have acknowledged the potential negative effects of Chinese land-based
investments on local land rights, though in the same breath, they have also largely dismissed
them as mythical due to the limited scale of Chinese land investments in Africa (Brautigam
and Ekman, 2012). It is therefore important to scrutinise individual cases to determine whether
indeed these fears are founded and to provide empirical evidence upon which to build a better
understanding of the effects of the expansion of Chinese capital in the African countryside.
Interviews with local residents in the village around Hanhe farm revealed that the land that was
allocated to the Chinese was categorised as public land and had been allocated to Ugandan
WWII veterans and their descendants in the 1980s. Each family was allocated 30 acres of land
and were issued with letters of allotment showing proof of occupancy 3. However, the land was
subsequently leased to a local private investor who then sub-leased it to the Chinese for a 30-
year period. In the process, the original land dwellers claim that they were insufficiently
compensated and accuse the local investor of speculating on the land only to hand it over to
the Chinese at an exorbitant rate. Research findings from analysis of personal documents and
interviews established that vulnerable individuals such as women were adversely affected due
to the pervasive gender imbalance in land registration and ownership in Uganda. One woman
recounted how she was rendered landless after her husband took part of the payment and left.

The doctor bought the land from the veterans including my husband who sold the
land without my knowledge. I dont know what transpired between them, but I
know some money changed hands. I think only 5 or 6 people out of about 17
shareholders were paid. I dont know how much money they were paid; I think it

3
Interview with female former allottee June 16, 2013
 was about 300,000 Uganda Shillings (appx USD 90) for 30 acres. We were forced
to take the money and leave, so my husband left and we have not seen him since. 4

It remains unclear how much money Hanhe Uganda company paid for the land lease. Attempts
to establish the figure from the UIA, the Nakaseke district land office, and the primary
leaseholder proved fruitless, all citing confidentiality. The wife of Mr Lijun could only confirm
that the Ugandan government gave them generous incentives; a point that was corroborated by
their local broker back in 2012 but did not specify what these incentives were. In an interview,
a local government councillor closely associated with Hanhe farm estimated that about 50
million Uganda Shillings (appx USD20,000) was paid; which amounts to about USD50 per
acre for 30 years. A narrative that the land was empty and unoccupied is used to justify the low
amounts paid for the lease. Interviews with local residents around Hanhe farm and former
occupants suggests that the land was too swampy for cultivation and was only used as a spare
resource for grazing in the dry season, hunting, collecting wood and thatch for roofing. The
land may have thus appeared underutilised and thus available for allocation to investors. On a
separate case involving allocation of land to the Ke-Hong Group, their local facilitator is
responded to local complaints by saying advancing a similar narrative that "much of the land
we have has been idle, now we have got people to make use of it and we are still complaining?"
(Oluka, 2016). This discourse follows a familiar pattern of legitimation for large-scale foreign
land giveaways based a rationality that defines acceptable land-use as one of intensive
commercial production without which land is framed as being empty and available regardless
of historically and locally constituted ideas and practices of appropriate land-use regimes
(Makki and Geisler, 2011; Franco, 2012).

Land-Use Change and Ecological Impacts

Commercial activities
Hanhe farm Uganda was thus conceptualised as a multi-purpose agro-industrial park that
according to the companys self-description on the Hebei chamber of commerce website,
would engage in crop production and animal husbandry. Specifically, this would entail growing
of vegetables, feed-crops, and rearing cattle, sheep and chicken as well as fish production. The
industrial park would process an assortment of plant and animal products and assemble
agricultural machinery. It would also engage in import and export trade between China and

4
Interview with Rose, a former resident and evictee
Uganda while sourcing global markets for cotton, coffee, leather, African handicrafts and
marine products. The company was certainly set up with ambitious goals, but in reality its
actual operations in the first five years did not live up to these dreams.
Firstly, the actual land-size leased by the company was only 400 acres, far less than the
20,000 acres cited in the company description on the Hebei chamber of commerce website.
Furthermore, field observations between September 2012 and August 2015 showed that less
than half of the 400 acres had been cleared, while the rest was taken over by dense bush and
wetland vegetation. Only 70 acres were under cultivation in 2012 and the acreage in productive
use had actually declined by April 2014 with about 5 acres devoted to a vegetable garden and
10 acres given to farm workers to cultivate their own maize crop. Other activities on the farm
include a small piggery of less than ten pigs, a chicken coup with indigenous African breeds,
and mushroom seed development. Most of the food is produced for on-farm consumption, but
some pork is supplied to Chinese restaurants and companies in Kampala. Initial plans for
expansion of commercial pork and chicken egg production were abandoned due to
uncertainties about market access. As of April 2014, mushroom production was the only
commercially viable business. A maize milling plant with a flour production capacity of 30
tonnes per day was installed in late 2012, but it had been standing idle for a whole year due to
insufficient electricity supply and a lack of reliable supply of raw materials (maize). Milling
operations started in December 2013, but the challenges remained causing the mill to be shut
down again in 2014. The foreman conceded that a supply of less than 30 hours of electricity
per week made their operations inefficient and too costly to make any profits.
After unsuccessful experimentation with a variety of crop and livestock production, the
farm decided in 2014 to concentrate on two commercial activities: expanding mushroom
production and switching to large-scale aquaculture. In February 2014, construction of the first
10 fishponds commenced and 20,000 fish fingerlings were introduced into the ponds in March.
When I returned to the farm a year later in August 2015 I observed that the ponds were poorly
maintained and all around, the edges which were not reinforced with concrete were crumbling.
A farm worker told me that production in the previous year had been much below expectations.
It appeared that the farms fortunes were dwindling for some times. Back in April 2014, Madam
Jessie, the farm manager, told me that the company had not turned a profit in the four years of
its operation, and the enterprise was running out of funds to invest in any new productive
ventures.
 Hanhes dire financial position seemed to reflect the mixed fortunes of other Chinese
farms in Africa, such as those in Ghana, Zimbabwe and Mozambique that were performing
poorly; in Zambia only about half were turning a profit (Hairong and Sautman, 2010b; Jixia,
Lerong and Tugendhat, 2015; Lixia et al., 2015). Following a stakeholders workshop that I
organised with other foreign large-scale commercial farmers in the district, Madam Jessie
admitted that a lack of cultural understanding of their local environment had hampered their
labour relations with local employees. In addition, poor knowledge of local market dynamics
and stiff competition from local producers had affected their success. These observations
reflect similar challenges faced by Chinese farms in other African countries such as high
production costs, lack of sufficient market information, fierce local competition, difficulties in
accessing alternative land for expansion (Asanzi, 2012; Chuanhong et al., 2015). Furthermore
general institutional and macro-economic weaknesses created an environment of overall low
rate of return in agricultural investments in Africa, and the poor performance of the sector
(Sun, 2011).

Land-use change and ecological effects

Hanhe farm is located on a swamp along the Lugogo river that originates slightly north of
Kampala and flows northwards to feed the larger Kafi River which flows southwest, forming
the dense river system in central Uganda before flowing into Lake Albert, the source of the
Albert Nile. The river is of immense significance for a large ecosystem network that serves as
a source of domestic water, livestock rearing, fishing, and small-scale irrigation for
communities along four districts in the northern regions of central Uganda. Interviews with
former occupants, local residents and analysis of historical satellite photography indicate that
before Hanhe Uganda company acquired the land and began farm operations in 2010, most of
the area was covered by thick bush and swampy grasslands. According to farm workers, land-
use changes began with bush clearing using traditional slash and burn methods to prepare the
land for cultivation. Evidence of charred grass, burnt-out tree stumps and dried-up reeds were
visible on my first site visit in September 2012. According to the local district environment
officer, slash and burn is a common and inexpensive practice used by small-scale farmers
lacking capacity for expensive mechanised farming. He however faults the practice for causing
significant ecological damage and destroying soil nutrient content and precipitating erosion.

In order to drain the swamp, trenches were dug on several sections of the farm. Larger
and deeper drainage canals were dug all around the farm compound to protect houses and work
stations from severe flooding during the rainy season. Conditions of frequent flooding and
heavy waterlogged soils eventually led to the abandonment of commercial crop production on
the farm leading to the rapid growth of vegetation that threatened to overrun the previously
cleared but unused land. On a site visit in April 2014, I observed sections of yellowed and dried
up grass adjacent to lush green brush, a clear evidence of recent chemical spraying with
herbicides. Farm workers explained that they had applied Roundup, a common agricultural
herbicide that is known to cause up to 20per cent species reduction in aquatic ecosystems,
including severe effects on the Nile Tilapia, and even lethal impacts on some aquatic and
terrestrial species (Jiraungkoorskul et al., 2003; Relyea, 2005a, 2005b). To control mosquitos
from breeding in the canals stagnant water, they also applied Dichlorodiphenyltrichloroethane
(DDT), a highly residual insecticide that has been prohibited in Europe and the United States
because of its well-known long-term environmental persistence, serious toxicity to wildlife,
and negative effects on human health (Turusov, Rakitsky and Tomatis, 2002; Yez et al.,
2002; Beard and Collaboration, 2006).

Under the swampy conditions and perennial flooding at Hanhe farm, these toxic
chemicals would most likely seep into the ground, contaminate the wetland and eventually
flow into the adjacent river system. In addition, aquaculture production in fishponds that was
introduced on the farm in 2014 involved the direct application fish feed into the ponds which
would inevitably contaminate ground water, the swamp and eventually find its way further
downstream. It is not yet clear what ecological consequences aquaculture production might
have under these conditions, but proposed plans for massive expansion for industrial fish
farming would most likely increase the amounts of foreign matter introduced into the delicate
wetland ecosystem.

Environmental Governance

Chinese companies operating in Africa have often been criticised for their poor environmental
record. This is partly attributed to a tradition of lax environmental controls in China, despite
recent reform efforts, and the likely tendency to export these low standards in their foreign
operations (Gordon, 2012; Shinn, 2015). While recent efforts by the Chinese state and private
enterprises to improve environmental standards have been documented (Brautigam, 2009; Gu,
2009), critics argue that these domestic changes are precipitating pressures on Chinese
enterprises to export harmful practices in the process of outsourcing of Chinas dirty
industries such as manufacturing and agriculture (Peh and Eyal, 2010). This, it is argued is
made possible partly due to corresponding lack of adequate environmental laws, institutional
capacity, and enforcement regimes in many African countries (Gordon, 2012; Mohan and
Lampert, 2013; Shinn, 2015).

A survey of Chinese companies in Kampala indicated that up to 45per cent had

encountered environmental issues, with state-owned enterprises citing strict environmental
regulations as one of the challenges they faced in setting up businesses in Uganda (Warmerdam
and van Dijk, 2013b). The seriousness of the issue was clear when a Chinese owned tannery in
the eastern industrial town of Jinja was accused of major environmental violations with regard
to the treatment of industrial effluent that eventually led to its closure. In its defence, the
company cited confusion caused by overlapping institutional jurisdictions between various
Ugandan regulatory agencies (Brautigam, 2009). The land-use changes on Hanhe farm
therefore raise questions about its potentially harmful environmental practices and highlight
the tension between the companys own environmental ethics and the effectiveness of local
agencies in environmental management. It also points to larger issues regarding the governance
of foreign lad allocations and regulation of land-based investments in the interest of
safeguarding wider social and ecological interests.

At the commencement of Hanhe farms operations in 2011, complaints from some local
residents and a section of local government officials were reported in national media outlets.
The complainants cited concerns over potential environmental degradation arising from the
farms activities on the wetland such as excavation, digging of trenches and diversion of the
river (Luwaga, 2012). They feared that these activities would reduce the rivers water volume
and effect on the livelihoods of the immediate community and pastoralist communities further
downstream. They further questioned why and how the wetland, which was supposed to be a
protected resource, came to be allocated for private commercial use in the first place. They thus
petitioned the National Environment Management Authority (NEMA) to intervene and
regulate the farms operations.

In Uganda, wetlands are recognised as fragile ecosystems and are thus protected against
allocation to private individuals and their use is regulated by law. The countrys environmental
regulations stipulate that all activities in wetlands that are likely to have an adverse impact
must be approved following a successful evaluation of their potential environmental impacts
(NEMA, 2000). Hanhe farm was thus required to undertake an environmental impact
assessment (EIA) and seek approval, before commencing any activities on the farm. Interviews
with the farm manager and local government officials as well as inquiries at NEMA revealed
that the farm had been operating for almost three years without a mandatory wetland user
permit as required by law (NEMA, 2000). It was not until February 2013 that Hanhe farm
obtained a wetland user permit. The Hanhe management on the other hand blamed bureaucratic
red-tape for the delays in obtaining the permit. However, a document search at the local
governments environment office showed that Hanhe farm submitted its EIA in August 2012,
more than two years after it started operations on the farm and perhaps prompted by protests
from local community members.

Even after the issuance of the user certificate, it appears that Hanhe farm did not comply
with conditions specifying the types of land-use authorised by NEMA. The certificate, a copy
of which I obtained, specified that the permit was only issued for crop growing activities, and
that the farm would have to carry out a separate EIA for other proposed activities on the farm
such as the maize mill and small scale factories. However, by the time the certificate was
issued, the unauthorised structures were already in place. The farm had also been instructed to
ensure minimum loss of indigenous tree cover and retain tree stumps and shrubs to preserve
the delicate soil structure. Furthermore, the permit stipulated that any use of fertilisers,
herbicides, and pesticides must be first be approved by NEMA. 5 Contrary to these provisions,
land-use changes observed on the farm indicated that almost all of the conditions stipulated in
the certificate of approval may have been violated. Interviews at NEMA offices in Kampala
and at the local government environment office in Nakaseke district showed that no inspections
and monitoring of the farms activities were carried out before and after the wetland user
certificate was approved as required by law.

The omissions and potential violations noted above raise critical questions about
procedural lapses and observance institutional responsibilities for environmental governance
across multiple levels in Uganda. The environment Act (Cap 153 section 107/7) apportions
overall responsibility for the governance of wetlands nationally to NEMA, while district and
local environmental committees are the implementing organs for the management and
conservation of wetlands at the local level. However, interviews with the local district
environment officer revealed that due to the limitations in financial and human resource
capacity, his office was unable to effectively discharge its mandate in monitoring and

5
The Certificate of Approval of Environmental Impact Assessment for Hanhe Uganda Farm Company
Ltd was issued by NEMA on 7th February 2013
supervision of wetlands throughout the district. He also cited interference from central
government and political elites, lack of support from NEMA and other relevant ministries in
enforcement of regulations, and in some cases intimidation and threats to his life. A senior
official at NEMA admitted that the Hanhe matter was not an isolated case, but symptomatic of
what was happening across the entire country. He however blamed such environmental
governance failures on institutional weaknesses at the local government level, thus absolving
NEMA of any culpability.

While various jurisdictional mandates for land and environmental governance fall
under multiple agencies such as the ministry of environment, local governments, and the
Uganda wildlife authority among others, sources indicate that NEMA has often come under
specific scrutiny for failure to effectively uphold environmental regulations in the protection
of wetlands. This is especially acute in the face of increased demands from private investors
backed by pressure from or complicity with political elites. An extensive investigation carried
out by the authoritative Ugandan weekly magazine, The Independent (March 2014), faulted
NEMA for rampant and unlawful approval of industrial developments on several wetlands in
Kampala. The paper quoted the NEMA executive director justifying this practice by arguing
thus: I strongly believe that development and conservation can still co-exist although someone
has to lose in the process (Musoke, 2014). This confirms prevalent perceptions that in the race
to attract foreign investments and spur industrial growth, a toxic cocktail of weak local
capacities, corruption, and elite profiteering, creates room for Chinese and indeed other foreign
and local firms to exploit African governments tendency to give less significance to
environmental protection (Peh and Eyal, 2010; Mohan and Lampert, 2013)

Conclusion

This paper set out to explore African agency in commercial agriculture engagement with China.
By situating the case study of Chinese owned Hanhe farm in local political, social and
ecological contexts in Uganda, we have attempted to demonstrate how robust but differentiated
this agency unfolds in different local contexts and across various social groups. While we
eschew a homogenising narrative of Chinese engagement in African agriculture, empirical
evidence of high-level elite engagement in Uganda reveals a pattern of political patronage that
remains persistent when compared to similar processes in other countries. The convergence of
elite and capital interests however begins to unravel as capital travels down to the countryside
where differentiated perceptions, and distribution of benefits becomes uneven.
 Consequently, a counter agency emerges that challenges the win-win narrative of
investment, development and mutual cooperation. Hitherto marginalised communities assert
their agency and in some cases, as exemplified by community protests against Hanhe farm, the
investors are forced, at least nominally, to seek compliance with the countrys environmental
governance laws by conducting an EIA and seeking official authorisation for land-use changes.
Still, significant gaps are revealed in terms of institutional capacity and political will to
minimise adverse effects of disruptions associated with significantly transformative social and
ecological changes associated with aspirations for developmental modernisation. These gaps
therefore create opportunities to expand the scope of the Sino-Africa win-win narrative to
encompass questions of mutual responsibility in safeguarding social and ecological rights.

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