(LEAD) S. Korea to build farming infrastructure in Tanzania

(ATTN: UPDATES with more details throughout)
By Lee Joon-seung
SEOUL, Sept. 24 (Yonhap) -- South Korea is set to develop a wide swath of
farmland and build a food processing complex in Tanzania, a state-run corporation
said Thursday, a move that could help Korean companies make inroads into African
and European markets.

The project, which could begin next year, involves the development of 100,000
hectares of land in Pwani Province in the East African country, the Korea Rural
Community Corp. (KRC) said.
"Of the total, half will be developed and given to Tanzanian farmers, with the
rest provided to South Korean farming and food companies," said Han Sang-woo,
executive director of regional development at KRC.
"We have asked Dar es Salaam to give us operating rights to 50,000 hectares of
land in which South Korean businesses can raise grains and make processed foods
like cooking oil, wine and starch," Han said.
How the land will be transacted has not been officially determined.
Products made in Tanzania can be shipped free of duties to Europe because the
country has a free trade agreement with the European Union, Han added. Good
weather conditions and low production costs have transformed Africa into an
important supplier of food for many European countries.
Processed food made on the land can also be shipped to neighboring countries more
cheaply than those imported from Europe and Asia, potentially giving South Korean
companies a greater market share.
Han said US$50 million will be spent to develop the initial 10,000 hectares of
land from 2010-2015 with outside financing and overseas development funds being
sought for developing the remaining 90,000 hectares. About 500 million won
(US$418,000) will be spent in the near future to conduct feasibility studies.
To help fund development, KRC hopes to exploit Tanzanian deposits of iron ore,
gold and copper in other parts of the country.
"Details on future funding and development of land that is expected to cost up to
800 billion won will be drawn in the coming years in close cooperation with
Tanzanian officials," he said.
Besides farmland development, KRC said it plans to provide agriculture-related
technical knowhow and share expertise in irrigation as part of its broader
government effort to export farming techniques to developing economies.
The corporation said it is also holding talks to develop farmland in Laos,
Senegal, Mongolia, and export irrigation and dam-building technologies to
Indonesia and Myanmar.
South Korea hopes such efforts will improve its national image abroad -- and
allow the country to better cope with sudden fluctuation in international food
prices.
South Korea's has witnessed a steady drop in its food self-sufficiency. It was
able to produce just 27 percent of its total food needs in 2006, a massive fall
from a little over 80 percent in 1970.
yonngong@yna.co.kr
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