Dim Sums: Agricultural Markets in China

In a ceremony July 26, plans for China’s first “vegetable factory” were unveiled . The vignette is a good example of China’s emphasis on high technology and the cozy relationship between government and business. Moreover, the incongruous the pairing of “factory farming” and organic agriculture is out of step with the Western organic agriculture movement. Products from projects like this are ending up in your “organic” food products, undermining the whole concept and prompting a turn toward “local” food. Beijing Zhonghuan Yida Horticulture Sci-tech Ltd. Co and Shenyang Liangma Group LLC signed an agreement to create China’s first “vegetable factory” in Xiaohan village. According to the agreement, Shenyang Liangma will invest 200 million yuan to build the factory and Beijing Zhonghuan will supply advanced technologies over a ten-year period. At the ceremony, Mr. Liu, vice-president of the Academy said the institute is looking for ways to disseminate its research accomplishments through p...

China's dairy industry is still reeling from the aftermath of last year's "Sanlu" melamine milk powder adulteration incident. The government has been busy trying to rectify the industry. Each province and county is doing its own thing with general guidance from the central government, but there are common themes. One major thrust is to eliminate competition among milk collection stations. In Inner Mongolia, raw milk supply has been carved up into territories, and each processing company is assigned a territory; they can't buy outside their territory--a monopsony. For example, Helin village in Inner Mongolia used to have 2 milk stations affiliated with Yili Company, 3 affiliated with Mengniu Co., and 3 bulk milk collection points. when milk was in short supply, companies would compete for supplies from these stations. Now everyone in Helin village sells to 2 of the Mengniu stations. A third station is being reorganized; the others have been closed down. Both Mengni...

A pilot program in Chongqing municipality in southwest China combines two new directions in restructuring Chinese agriculture: land transfers and cooperatives. Last October, a big meeting of China’s communist party encouraged leaders to explore new ways of transferring land between farmers. China is also emphasizing farmer cooperatives as a way to expand the scale of farm production while maintaining the collective ownership of farmland. Chongqing municipality has been singled out as a pilot area to try out innovative arrangements for forming cooperatives using land use rights as investment capital. In 2007, authorities in Chongqing began allowing farmers’ land use rights to be pooled and used as investment capital in an agricultural company (cash, physical assets, intellectual property, and other assets could also be used.) Now the emphasis is on forming “farmer professional cooperatives” in this manner and changing companies already established in this manner into cooperatives. A 200...