Feicheng excels in the international organic Vegetable market

ZHANG HONG

AT 30 kilometers from Mount Tai, one of Chinas “famous five” peaks, and 100 kilometers from Confucius hometown of Qufu, the location of Feicheng City in Shandong Province could not be more auspicious.

With famously fertile plains extending for miles around the city, Feicheng is fast becoming an important base for Chinas burgeoning organic vegetable industry.

First organic V illage

Although competition in Chinas vegetable markets has become ever fiercer in recent years, Wang Lijun is confident about selling the produce he grows on his own four mu, roughly a third of a hectare.

A lot of Wangs produce ends up overseas, and the orders keep streaming in. As he says: “The market is strong. Ive had pre-orders come in from overseas even before my first sowing of the season.”

Wang lives in Feichengs Jihetang Village, a formerly poverty-stricken area that at one time ran up a public debt of RMB 1.2 million. The village struggled to subsist on its traditional corn and wheat crop. All that changed in 1994 when villagers started growing organic vegetables.

Jihetang is primed for agricultural excellence. The fields that surround the village occupy the fertile littoral of the pristine Dawen River, and are noted in Chinese agribusiness circles for their high crop yields. Locals boast that the area has been compared to the famously rich farmland along the Ukraines Dnieper River.

Producing organic vegetables is not easy – growing conditions and procedures are highly specified and notoriously inflexible. Nevertheless, cognizant of the fact organic vegetables fetch higher prices in world markets, the village turned to organic in the fall of 1994 when villagers signed contracts to produce Japanese Mustard Spinach.

It took a full three years for Jihetangs farmers to become fully qualified in organic farming. To this day, they are subject to random inspections from the certification authorities to ensure their organic credentials.

As chairman of the village committee, Wang Lijun had his work cut out convincing villagers to switch to organic crops. He promised them that within a year, they would be selling their entire crop at much higher prices, and that if not, the village committee would compensate them.

When harvest time came, those growing Japanese Mustard Spinach received revenue of RMB 3,000 per mu – four times that of wheat. The villagers were won over and have been organic ever since.

Wang Lijun is also head of the villages Organic Farming Association.“The association helps farmers to research and choose the right seedlings, fertilize fields and fight off pests. It also helps with accounting and finance issues,” he said. “The organization takes the administrative burden off farmers and lets them get back to what they do best – farming.”

From a meager 33 acres in the first years after 1994, 270 acres of organic farmland now sprawls out around Jihetang, and two thirds of villagers are well off by local standards. Large houses, motorcycles, TVs, washing machines, gas stoves and computers – things that villagers could only dream of at the start of the 1990s, are now commonplace.

In 1997, the village was the first vegetable growing area in China to be certified by a world authority, namely the Organic Crop Improvement Association (OCIA). After registering the trademark “Jihetang,” Wang Lijun and his team went on to get organic certification from the European Unions Biopharmaceutics Classification System and Japans Organic and Natural Association. Today, Jihetangs quality produce is sold in Japan, Europe, the U.S. and many other countries.

organic from the Roots Up

Pallets full of organic vegetables sit waiting to go to market at Giant Food Co., Ltd. Its deputy manager Chen Fengming, a Taiwanese, is busy arranging freight for the pallets, part of a 24-ton order heading to the U.S. market from the port of Qingdao.

As some of the highest-quality produce in China, 90 percent of Feichengs organic vegetables head to overseas markets.

In recent years, the Feicheng Organic Expo has been attracting a lot of attention from abroad, and locals have consequently seen an uptick in orders.As one local at the expo said, “Were not worried about selling all of our produce, rather that we cant produce enough to meet the massive demand.”

Forward contractors operating in Feicheng arrange to buy farmers crops even before the growing season arrives, ensuring there is no pressure to hunt for contracts when the harvest is underway.

“The produce in Feicheng is natural, healthy and does not come into contact with pesticides of any description,” said Wang Jianping, director of the Feicheng Agricultural Bureau.

Applying organic fertilizer as opposed to chemical-based mixtures is one of the keys to growing organic vegetables. Li Lin, head of Honghai Food Company in Taian, said, “Chemical fertilizers had been used for decades, and this has polluted the soil to a dangerous degree. We are now well on the way to reversing this.”

Organic fertilizer, in addition to being well balanced in nutrients, is just as effective as chemical fertilizer, and can be cheaper. Over several growing seasons it gradually undoes the damage caused by years of chemical use.

Residents in Feicheng have built up their own supply chain in the production of organic fertilizer. From raw materials to the finished products, the organic credentials of their fertilizer are guaranteed.

As part of this supply chain, scrap vegetables left over from harvest or processing are fed to cows, whose dung can be converted into fertilizer. The microorganisms in the dung help to keep the fields moist and prevent hardening of the soil. Soil erosion is reduced to a minimum, and this process also protects groundwater.

“We used to use pesticides, but the pests kept coming back again and again. In recent years, weve stopped using it, and with our new methods there are nowhere near as many pests as before,” one local farmer noted.

Rotating crops is an important weapon in the fight against pests. In Feicheng, spinach or cauliflower is grown in the spring, followed by green soybeans.

By applying organic fertilizer, harvest yields are doubled compared to the chemical alternative. The resulting produce is tastier, too. Li Lin explained: “Take organic spinach as an example. Its sugar content is two-to-three percent higher than non-organic variants. This small difference has a big impact on taste.”

Besides spinach, Feicheng also produces broccoli, green sword beans, asparagus, and 30 other crops. Each batch of vegetables has its own ID, which tells customers from which field and when their purchase was harvested. “Each crate has its own bar code. You can trace the produce from the field to your shopping bag – at any point in the supply chain.”

Li Lin went on to say that it takes around 20 days from harvest for vegetables to reach international consumers. On visiting grocery stores abroad, he noticed that while in China people tend to stick to fresh vegetables, foreign consumers are more open to deep-freeze packaging.

Based on this research, Feicheng now grows broccoli for two seasons each year, freezes it and ships to overseas markets on a monthly basis. They sell all their deep-freeze produce before the next growing season arrives.

“People may think that fresh meat is best, but laying meat to rest at zero to two degrees for 72 hours before consumption actually improves taste. The same logic applies to vegetables.”

By freezing vegetables, nutrients are maintained for longer periods.“After harvest, the enzymes in spinach are still active. But during transportation, some of these enzymes begin to break down. Refrigeration during transportation reduces this loss, and freezing stops it,” Li said.

In the organic food business, frozen vegetables are just one part of the market, according to Li. “Processing vegetables to a greater extent brings in more profit.”

Learning from developed countries experience, Secretary General of the China Fruit Marketing Association Lu Fangxiao believes that sales in supermarkets, as opposed to conventional open-air markets, will be the next growth trend in Chinas fruit and vegetable industry. In many cities in China, supermarket sales now account for 30 percent of total fruit and vegetable sales.

Besides the international market, Feicheng has also targeted the home market by promoting the sale of its organic vegetables nationwide. The villages market share is on the rise.

Fields as Factories

Developing away from staple crops to green vegetables and then to organic varieties represents a trend toward the modernization of agriculture in China, where traditional growing has long dominated.

Organic agriculture began to take root in China in the early 1990s. Until the turn of the millennium, organic farms were still relatively rare, and the domestic consumer market barely existed. Acreage was steadily increased, and by 2003, China boasted 300,000 hectares of certified organic farmland to become the 13th largest organic producer in the world. In 2006 this figure had grown to 2.1 million hectares with another 1.1 million in development, placing China at number three worldwide, just behind Australia and Argentina.

Over the years, a pattern of integrating wholesale buyers, village cooperatives and individual farms has gradually formed to promote organic farming. With this has come greater amalgamation of farmlands to realize economies of scale. As individual farms have coalesced, companies have stepped in to provide administrative resources to farmers. Farms have become factories of sorts, in which farmers are paid a stable salary and receive dividends at the end of each year.

Qin Qingwu, director of the Rural Economics Institute at the Shandong Academy of Social Sciences, points out that this production process closely connects distributors to their production base. Amalgamation also facilitates quick adoption of new technology, which in turn ensures the best quality at the lowest cost.

In Feichengs rural areas, every farmer has a booklet with information on over 30 vegetable species to help them master the necessary skills for growing new crops quickly and easily. A quality supervision system has also been established. Professional technicians frequent the area to monitor and supervise the whole process from plowing the fields right through to the final harvest in order to guarantee quality.

“Farmers and wholesale buyers alike appreciate the role provided by the rural cooperative,” said Bu Wen, head of the rural work office in Feicheng. “Distributors are ensured a production base; farmers have fixed incomes to protect them from market risks, and the cooperative also makes money for the community – its win-win-win.” Since 2009, the Feicheng government has been providing local agribusinesses with RMB 6 million in support funds annually. At the same time, RMB 2 million is set aside each year for the development of rural cooperatives.

Li Lins company has benefited greatly from the streamlining of production and supply chains for local agribusinesses.“We benefit from the wide network of agribusinesses in the region. The area is becoming well known through word of mouth as a paradigm of efficiency and export prowess.”

The cultivated organic farmlands around Feicheng now total 12,000 hectares, a sizeable area even by Chinese standards. Six vegetable processing plants and 18 distributors are now based in the area. With 451 farms providing 140,000 tons of vegetables for processing annually, Feicheng is Chinas largest organic vegetable production and export region.

But Feichengs agriculturalists are not content with revolutionizing Chinas organic vegetable business. They plan to develop the regions vegetable success to other fields, such as poultry, fruits, livestock and crops. Watch this space for more news on Feichengs successes in the years to come.