Plenty of scope for local producers to compete
Mainland consumers' growing appetite for safe and high-quality fresh food may be buoying imports, but it also offers just as many opportunities for local producers that want to see home-grown fruits and vegetables shed their poor image.
Mainland consumers' growing appetite for safe and high-quality fresh food may be buoying imports, but it also offers just as many opportunities for local producers that want to see home-grown fruits and vegetables shed their poor image.
While many domestic producers have tried to break into the mainland's import-dominated high-end food market by teaming with foreign research institutes that offer better and more disease-resistant strains of fruits and vegetables, fragmented farmland ownership and the theft of new strains are holding them back.
Rijk Zwaan, a Dutch seed-breeder that has been in business on the mainland for more than a decade, said it still made up only a small part of the company's business, partly because local farmers were still price-sensitive, and also out of concerns that the fruits of years of research would be stolen.
"Intellectual property is still a major issue in China," said Jan Doldersum, the company's manager of marketing and business development. "Local planters, who help nurse the saplings, take cuttings from your plants and grow them somewhere. It's very easy."
The seed-breeder, which has lost some shoots of its extra-sweet tomato strain in the past, said it had to carefully choose its local partners to avoid the problem. The company, known for developing a type of lettuce that requires just one cut to separate all the leaves, breeds only water melon, tomato and Chinese cucumber on the mainland. However, Doldersum said it would gradually increase the range of varieties at newly acquired farms in Qingdao.
Edward Zhu Yanming, chief executive of Shanghai-based CHIC Group, which groups small mainland farms together and regulates their operations in order to produce a sizable and quality output for global brands such as Del Monte and Heinz, told a forum on global fruit trading last month that fragmented farmland ownership was a major hurdle to much-needed reform of agricultural business on the mainland.
"The biggest competitor to larger-scale farming is the peasants," Zhu said. "For them, there is no cost to farm their land, whereas any larger family-based farming entity will have much higher costs because they have to pay to lease their land from these peasants, who become like landlords."
Because acquiring enough farmland from peasants - some of whom own just two to three mu (0.13 to 0.2 hectare) of land - appeared to be a mission impossible, CHIC teamed up with them, grouped them into communities and introduced a programme to ensure that they checked on each other for malpractices. Still, teaching such a diverse workforce skills and how to apply technology remained a challenge.
While rising middle-class income is expected to support an import boom for the next 20 years, Zhu said the mainland must also strengthen domestic food supply to ensure sustainable development.
