China turning state-owned farms into agricorporations to take on world players
Central government earmarks the cream of its vast network of state-owned farms for mergers to rival world's agribusiness giants
Beijing is amalgamating a number of state-owned farms and companies into specialised agricultural corporations to rival international food giants.
The bureau's director, Wang Shoucong, told the South China Morning Post that the initiative was in response to the top leadership's call for creating modern agricultural corporations to address growing concerns about food security in the world's most populous nation.
"We will start with integrating domestic resources and focusing on the domestic market," he said. "But the ultimate goal is to have a say in the global market - to be internationally competitive."
In the dairy industry, still reeling from the 2008 melamine-tainted formula scandal, three leading dairy companies - Shanghai-based Bright Food, Sanyuan in Beijing and Wondersun in Heilongjiang, all under the cultivation bureau system - are forging an alliance to manufacture and market their products, according to Wang.
More foreign companies are trying to strengthen their presence in China as wary customers look outside the mainland via online shops or friends and relatives overseas to buy dairy products, especially baby formula.
Abbott Laboratories of the US and New Zealand's Fonterra Co-operative Group, the world's largest dairy exporter, have proposed a dairy farm hub in China with a combined investment of US$300 million.