In September 2022, a global agribusiness specializing in high-yield crop production and advanced agricultural technology approached us for legal assistance in acquiring farmland in China. The company aimed to establish a large-scale agricultural operation to supply China’s growing demand for sustainably produced crops. They also planned to introduce cutting-edge farming technology to increase efficiency and output, making the venture both a commercial and technological investment.

The client faced several challenges in acquiring land and navigating China’s agricultural regulations:

Land Acquisition Restrictions: Foreign companies are restricted from directly owning land in China, making it necessary to navigate the leasing system for agricultural land while ensuring compliance with local land use regulations.

Compliance with Agricultural Regulations: Understanding and complying with Chinese laws related to agricultural production, pesticide use, seed importation, and environmental protection.

Negotiating Land Use Rights: Negotiating favorable long-term land use agreements with local government authorities, including securing the right to develop the land for modern, high-yield farming.

Technology Transfer and Local Partnerships: Managing the transfer of agricultural technology while complying with Chinese regulations on technology importation and establishing partnerships with local cooperatives to integrate modern farming techniques.

Environmental and Labor Compliance: Ensuring compliance with China’s strict environmental regulations governing land use, water management, and pollution control, as well as adhering to labor laws for hiring local workers.

In October 2022, we worked with the client to develop a legal strategy for acquiring long-term lease rights for farmland. Given that foreign entities cannot directly own land in China, we structured the acquisition as a long-term lease agreement with local authorities under China’s Land Administration Law. We assisted the client in identifying prime agricultural land in a province known for high crop yields and favorable farming conditions. We conducted due diligence to ensure that the land was properly zoned for agricultural use and free from any legal encumbrances. By November 2022, we helped the client negotiate a 30-year lease agreement with local government authorities, securing favorable terms for rent, land development, and agricultural production.

We advised the client on compliance with Chinese laws related to the importation of seeds, pesticides, and fertilizers, ensuring that all imported agricultural inputs met local standards set by the Ministry of Agriculture and Rural Affairs (MARA). In November 2022, we helped the client navigate the Seed Law of China, ensuring that the seeds imported for production were properly registered and certified by Chinese authorities. This was particularly important as the client intended to introduce high-yield crop varieties not commonly grown in China. We also advised the client on the proper usage of pesticides and fertilizers in compliance with China’s Regulations on Pesticide Administration, ensuring that their farming practices met local environmental standards.

In December 2022, we facilitated negotiations with the local government for additional rights related to land development. This included securing permission to build modern irrigation systems, storage facilities, and greenhouses on the leased land. We ensured that the client’s investment was protected by drafting detailed lease agreements that outlined the rights and obligations of both the client and the local government. The lease included provisions for land development and agricultural infrastructure improvements, which were critical for the success of the client’s high-yield farming model. Additionally, we included clauses that allowed for lease extensions at the end of the initial term, ensuring long-term security for the client’s operations.

In December 2022, we assisted the client with the legal aspects of technology transfer, ensuring that the advanced agricultural machinery and techniques they planned to introduce were in compliance with China’s Technology Import and Export Regulations. We helped establish partnerships with local agricultural cooperatives and government-backed farming programs, integrating the client’s cutting-edge technology with local farming practices to maximize output and efficiency. By January 2023, the client had successfully deployed their technology, which included modern irrigation systems, automated planting equipment, and crop monitoring technology that allowed for precision agriculture.

Given the environmental sensitivity of large-scale farming, we worked closely with the client to ensure compliance with China’s Environmental Protection Law, particularly regarding water usage, waste management, and pollution control. In January 2023, we helped the client establish protocols for sustainable farming practices that aligned with Chinese regulations, including efficient water use and minimizing pesticide runoff. We also advised on labor regulations, ensuring that the client complied with China’s Labor Contract Law when hiring local workers. This included drafting employment contracts that adhered to local labor standards and ensuring that workers received fair wages and benefits.

Successful Land Lease Agreement: By November 2022, the client secured a 30-year lease on prime agricultural land, with favorable terms for rent and the right to develop modern agricultural infrastructure. The lease also included provisions for future extension, ensuring long-term operational security.

Full Regulatory Compliance: The client successfully complied with all relevant Chinese agricultural regulations, including import restrictions on seeds and pesticides, as well as environmental standards for sustainable farming.

Technology Deployment and Partnerships: By January 2023, the client had established partnerships with local farming cooperatives and introduced cutting-edge farming technology that increased crop yields and efficiency, positioning the company as a leader in modern agriculture in China.

Environmental and Labor Standards Met: The client’s operations fully adhered to China’s environmental protection and labor laws, ensuring smooth operations and positive relations with local authorities and communities.