Short Chain of Food Supply Practices in China
Date: 2013-03-04 17:36:26 User: Marielle Dubbel
Please find below a contribution by: Cai Jianming (RUAF China, IGSNRR, Chinese Academy of Sciences,; Du Shanshan (Beijing Union University, Replies or feedback are welcome!

Short Chain of Food Supply Practices in China
It is always dangerous to generalize the situation in China in terms of food supply, given its vast territory, huge population, big disparity between different regions, social class and people’s preference in lifestyle and food consumption. However, based on our experiences and observations in the last ten years through our RUAF program, which is mainly focusing on the capacity building on mitigation/adaptation to climate changes and poverty reduction in a more urbanized society through promotion of urban agriculture in urban and peri-urban areas, we did see some important efforts and development approaches under formation in urban China. The followings are some of cases, which may be relevant to other developing countries and worthwhile to be investigated in details in future. (The cases listed below don’t have priority of importance yet, and need to be carefully judged by the purpose of study.)

1. Municipal designated vegetable production Areas and high quality production bases

As one of important food consumption in China, vegetable supply is always the first-tier priority concern for Mayor and many municipal government agencies. In huge cities like Beijing and Shanghai, where the urban residents have overpassed 20 millions and the daily vegetable consumption can be as high as 15 million kilos in high season, vegetable supply is a real challenge or big headache for municipal governments. To solve this problem and maximize the local food supply up to the degree of roughly self-contained, big cities in China usually contain a large peri-urban area (In case of Beijing, the urban territory is large to 18700, nearly half of the Netherlands but with larger population. The landscape could be felt like rural feature at large) for growing local food as much as possible.

In terms of green vegetable production and supply, Beijing can nearly be subsistence with localized vegetable in the past. As fast population growth and the diversified demand for vegetable consumption, local supply rate dropped to about 35%. Up to now, there are about 13 large-scale areas designated and specialized in vegetable production based on land use analysis with GIS tool conducted by a Ph.D. thesis. Of which, there are numerous companies and farmers produce various vegetable in Beijing and provide vegetable supply for the local market. Increasingly, some of the companies or farmlands in the areas are tending to become the high quality vegetable production bases.

Lvfulong is one of typical companies producing organic vegetables in Beijing vegetable production bases. Located in Yanqing district in Beijing, an area of 500 mu or equivalent to 33.3 ha farmland was developed in 2004 for producing high quality of some 30 kinds of organic vegetables, including colorful green peppers, mini-cucumbers, baby tomatoes and eggplants, by Lvfulong Agriculture Ltd. Its yearly production can be reached to 4500 tons. After 2006, when the Lvfulong products was certified and entitled to organic food, it became a high brand in Beijing. With the brand name, Lvfulong later mobilized more local farmers and cooperatives to affiliate with their practice for expanding its production. Another 133 ha farmlands, with 5000 local farmers involved in, was then added. The income of local farmers was then greatly improved by earning 8500 Yuan additional more per capita each year. Meanwhile, more high quality of local produced vegetables was supplied to Beijing residents, which otherwise will be supplied from long-distance places such as Inner Mongolia, Northeast China.

Similar with this practice, another increasingly popular type of local food supply was through an internal vegetable distribution scheme, in which, a large state-owned company or government agency usually will contract with a village or agriculture company to be their internal vegetable production and supply base. By getting subsidy and order requests from the large-scale company or government agency, the production base will only produce vegetables for them. To some degree, this kind of practice effectively reduce the food supply chain, yet it is debatable or controversial in term of social fairness or justice, as basically the profit from the state-owned companied should be shared nationally instead of collectively. A vegetable production base, located in Shunyi district in Beijing with area of 200 mu or 13 ha, can be a good example for further investigation for such a kind of practice.

2. Membership farms with direct package supply through fast track distribution system

Another type of short chain food supply in Beijing and Shanghai is the membership farmlands with direct package supply to the registered members through a fast track distribution system. This “one farm serving a group of fixed consumers model” learned from Japan, where housewives worried about the food safety and initially were willing to organize as a group to buy vegetables from a selected farm together to realize a win-win situation, in which farm can produce various vegetables/fruits at a required higher standard with a reasonable higher price based on the pre-orders from the group, and housewives group can get what they want at a guaranteed or higher quality without paying extra or supper higher price as otherwise they will do in the equivalent high-end market. Later, this practice becomes the membership farmlands model, in which the farmlands from very beginning called for membership registration. Once the membership reach to a certain number, then the will operate in its full scale.

Different from the initial practice, in which registered members collected their vegetable/fruit package by themselves individually or collectively, the practice nowadays is through the fast track logistic system, the vegetables/fruits packages are either directly sent to the members by farm logistic department or by a third party logistic organization. The vegetables/fruits package can be a standard one, in which the variety of vegetables/fruits are more or less standardized, or a customized one, in which the combination of the vegetables/fruits will follow the order from individual member at a slight higher price.

This type of practice has been becoming popular in Beijing in recent years. Lvniu, Tuotuo, Naiyuan Chuanfu farmlands and Futong Company are good cases for this type of practice. For example, Naiyuan Chuanfu Farmland, located in Xiaotangshan National Hi-tech Agricultural Production Demonstration Area of Changping District, set up a long-term cooperation with a neighborhood in Wangjing community to sell its organic vegetables through the membership model. Its total land area is 20 ha with organic production of vegetables/fruits at 2500 tones yearly.

Another good example is Futong company, a local partner of RUAF China, which is a university-based hi-tech agriculture company focusing on agro-park planning and design, implementation of planning and design, demonstration of hi-tech agriculture operation and management, as well as agriculture-related R&D on equipment, facilities, seeds, etc. Cooperated with Tongzhou District government, Futong set up its production demonstration base in Lucheng Town of the district with initial area of 13 ha (expanded to 130 ha now and will be 400 ha in the future according to the new farmland renting agreement with district government) for demonstration of greenhouse production and introducing new agriculture products. Its products are nearly all distributed through membership model, in which up to 500 staffs from universities and research institutes are its members now. The vegetables/fruits packages in Futong so far are mainly in standardized one.

3. Community-supported Farm or Allotment Farming

A new tendency or practice in short chain food supply is community-supported farm or a similar practice as allotment farming in UK, in which urban residents rent a piece of farmland to do their own vegetable growing by weekends or holidays as a hoppy or some kind of fun, or if they cannot be available sometimes, they can also ask the farm labors to help them with the maintenance. Through this way, most of community garden renters can directly get their vegetables or fruits from field in a more quality-proved (with his/her own eyes) way.

There are 7 large-scale of this kind of farms in Beijing, of which The Little Donkey Farm is the most famous one and can be a good example for this type of practice. Established in 2008 and located in Haidian District, a university and hi-tech economy concentrated district in Beijing, the Little Donkey Farm occupied farmland over 15 ha so far with 260 renters for growing their own vegetables and 430 additional memberships as their direct customers for getting vegetable supply from the farm. One unit of land area for renting is usually 30 square meters at renting fee 1500 Yuan or roughly 188 Euros, and one renter can rent more than one unit.

4. Supermarket-led vegetable distribution and retail system

The traditional way of agricultural distribution system in China is through a hierarchy networks including the chains like field collection for agriculture products; wholesale brokers at production areas; various levels of wholesale brokers at urban areas; agro-products markets and supermarkets. Through these long chains of food distribution system, the price of agro-products goes higher and higher as the gas price going up and the whole logistic network becoming more complicated. Paralleling with this, the freshness or the general quality of agro-products is going down.

To reduce the logistic cost, lower down the price and raise the quality of fresh vegetables, a very sophistic supermarket-led vegetable distribution and retail system has been developed and implemented in Shanghai since the World Expo in 2010. The merit of the system is the well cooperation between supermarkets and various key agro-production companies and agro-cooperatives, in which supermarkets are responsible for market analysis, in-advance purchase orders and logistic distribution and retailing, while the key agro-companies and cooperatives are responsible for standardized production based on the products ordering. Through this direction links between producers and consumers by supermarkets, up to 30% prices can be lowered down with higher products quality guaranteed.

Shanghai Lianhua Supermarket Chain, a special type of supermarket for retailing food products, is a good example for this practice. In 2011, Lianhua made the direct procurement of 17981 tons of vegetables/fruits from its contracted 48 production bases alone in Shanghai, which accounted for 40% of its total vegetables/fruits sales in the city.

5. Community based free markets for vegetable retail

Besides the above practice, which is somehow more suitable for middle class consumption needs, there is another type of vegetable retailing model increasingly popular in Shanghai, which was started from Minhang district by initiated and promoted by government. The merit of this model is through the government bridging and monitoring that agriculture producers, preferably farmer cooperatives, can be allowed to directly sell their products in residents communities if they can meet certain requirements such as higher quality fresh products; selling products at designed site and required time period; cleaning up the site afterwards; and reasonable price etc. This type of practice is somehow more suitable for middle and lower-income residents.

Minhang Agriculture Bureau, another local partner of RAUF China, can be a good example for further investigation in terms of this practice. Initially, Minhang started this practice through 21 pilot sites in 2009. By 2010, the number of sites expanded to nearly 100.The latest progress needs to be further checked.

6. Exhibition of branding products and information match making

Quite often, there are serious lack of information for urban residents to know more about their locally made food products and where these products are made. Therefore, it will be great if a platform can be created to bridge this gap.

The popular event of Agriculture Carnivals, created by Nanjing Agriculture and Forestry Bureau, another local partner of RAUF China, can be a good example for this practice. The merit of this practice is that the agriculture bureau organizes a so-called Agriculture Carnivals every year in a city park with great accessibility for urban residents to participate during two days of weekends to intensively show all kinds of locally produced high quality agriculture products and locally made branding food. By doing so, urban residents then know much better where they can go for buying food or high quality fresh agriculture products in their spare time. By enjoying branding food from other cities and various kinds of activities such as rural performances, urban residents can also learn more about rural-based and agro-related cultures, which in turn can stimulate further their inspiration for following up agro-tourism. By 2012, up to 10 Agriculture Carnivals have been successfully held in Nanjing.

It should be noted that there are much more types of best practices in urban China in terms of short chain of food supply if we have more time to dig in depth. However, the above cases can be the most popular ones and are increasingly becoming more important in the future.

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