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Having spent 20 years at Warburg Pincus, during which he helped set up the firm’s China business, Chang Sun chose agriculture for his next challenge. His start-up, Black Soil, aims to bring consolidation, automation and improved productivity to a sector that is currently fragmented, low-tech and inefficient. Increasing population size and decreasing agricultural land is a global phenomenon, but it is felt especially keenly in China where rapid industrialization and urbanization have left their mark on the landscape. Pollution, the unwanted byproduct of this process, makes it harder to meet rising consumer demand for higher quality and safe food. "Unless you can tackle the problem at source, which is the land and soil, you will not be able to solve the food safety and security issue," Sun says. "Much of the problem with food safety and security in China relates to scale. Agricultural land is still farmed by individual families with an average of about 10 mu each, which is maybe 1.5 acres. That is way too small for any economies of scale, for any scientific planting, and for using modern scientific technologies to improve yield." Black Soil wants to leverage reforms introduced in 2014 that allow farmers to lease out their land use rights. By gathering up these rights, it can achieve the scale that so far eludes the industry. There is also the possibility of leasing land from larger state-owned farms that are not being run efficiently. Sun notes that even small improvements in areas such as farm management, soil quality, irrigation and seed selection could deliver sizeable returns. "For example, in corn production China's yield is one third to one half that of the US and the cost of production is double that of the US. The biggest cost item is fertilizer, but if you ask the experts, China's land is over-fertilized. Use of fertilizers is four times the US average of the US," he says. "If you cut down the use of fertilizers and pursue precision agriculture - determining what nutrients the land needs - you can save on costs and improve productivity and yield." The initial plan was to raise a $1 billion fund for China agriculture investments, but for now Black Soil is working on a deal-by-deal basis. It has been involved in two projects to date: a state-owned integrated potato processing and distribution company, and a B2C rice producer.