China’s Ministry of Commerce is encouraging efforts to link the country’s producers more closely with retailers to help develop rural incomes.
Speaking at a ceremony in Ganzhou, Jiangxi province to celebrate Carrefour’s direct purchase of 300 tonnes of navels from local farmers, assistant minister of commerce Fang Aiqing said better communication between farmers and retailers will ensure more stable supplies for supermarkets and better incomes for farmers.
Developing export sales of Chinese produce will also help develop the safety and quality of farm products, Fang said.
“Chinese farmers and agricultural companies should cultivate a global vision and become stronger competitors in the global market,” he stated.
The 300 tonnes of oranges purchased by Carrefour will be sold in the retailer’s stores through the Middle East and South East Asia, according to a report in the China Daily.
Carrefour China’s CEO Thierry Garnier said the company is working closely with farmers and helping them improve quality with better agricultural management. He explained Carrefour has already purchased over 300,000 tonnes of produce worth Yn1.5bn (US$234m), directly from growers in China, and the company aims to continue expanding its direct purchase policy.
Speaking at the event, Chen Xianbo of grower-exporter Yuhuan Feilong Pomelo Co Ltd said working with supermarket chains has helped the company grow its income 15 per cent.
“We used to do business through traders, but that was too risky and proved difficult for us to expand our production and export volumes,” said Chen.
China’s government is encouraging direct links between farmers and retailers, and is pursuing the policy with a number of initiatives.
“The government found that the lack of growth in farmer income is because of too many links between farmers and retailers,” explained David Zhang of retailer Spar Beijing, speaking at the Asiafruit Congress conference event in September.
“So they encouraged retailers to go directly to farmers, with the expectation that farmers can get better terms selling to retailers directly.”
Large international retailers like Carrefour are a step ahead of local retail chains in this regard because they already have established sourcing practices and systems developed in global markets where direct sourcing is already a common practice, according to Zhang.
“With China retailers there is the lack of a system to manage this direct sourcing,” he explained. “These retailers are not used to managing their direct sourcing. In just a short time, a few years, they’ve changed to this direct sourcing `system`.”
