Organic Consumers Association

Organic Farming Set to Boom in China

Chinese farmers cash in on need for organic food

By Nao Nakanishi
Saturday, Oct 25, 2003

As consumers in the West grow increasingly hungry for organic food, Chinese
farmers see a niche market worth cultivating.

In this corner of rural China, the word is out that more and more people
abroad are willing to pay extra for what they believe is a healthier and
more environmentally friendly diet.

Sales of organic food in the US alone reached US$11 billion last year and
are projected at US$13 billion this year, and farmers are ready to get their
hands dirty to reap the benefits.

"Farmers are very keen. They even pick out worms by hand," said Wang
Tingshuang, general manager of a farm in the key northeastern agricultural
province of Jilin.

"They earn more money. They don't have to worry about sales. They don't have
to worry about storage. There's no reason why they shouldn't go for organic
farming," he said.

Wang's farm, the Fuyu Farm for Returned Overseas Chinese, is a long way from
any trendy restaurant with a healthy menu. But that is where its output
could easily end up.

The farm, with 350 workers, is converting part of its 2,000-hectare area for
conventional crops into land for organic soybeans, corn or kidney beans for
export to Japan, Europe or the US.

Organic farmers work the land without the aid of chemical agents typically
used by farmers to control insects and weeds or to fertilize fields.

Industry officials say foreign buyers pay Chinese farmers at least 30 to 50
percent more for organic food, knowing they can get large premiums from
sales in developed countries.

Growing minority

In China, where farmers account for more than 70 percent of the population
of 1.3 billion, organic growers are only a tiny minority.

And these are no hippie farmers shunning conventional farming practices for
the sake of the environment. They are poor farmers who could never easily
afford expensive chemicals used in intensive farming, going organic to boost
their meagre incomes.

For Beijing, improving living standards of the largely impoverished rural
workforce is a key concern. So the government is understandably supportive
of organic farming as a way of lowering input costs while tapping high-value

There are no figures available for China's output of organic food, which is
still an alien concept for most Chinese consumers, but demand in the West
has been growing sharply.

In the US alone, sales are projected to hit US$20 billion by 2005, up from
the US$13 billion forecast for this year.

In China's neighboring agricultural provinces of Jilin and Heilongjiang,
which together are about twice the size of Norway, there is a growing number
of certified organic farms.

"This is a green area. We don't have to worry about pollution. The business
has developed very quickly," said Liu Ning, a food scientist and trader at
China Jilin Organic Food Co, the contractor of the Fuyu farm, which was set
up in 2001.

"The government is supportive as farmers can increase their income," Liu
said, adding she had just returned from a farm near the border with North
Korea where her company had harvested organic blueberries from a trial

Environmental risk

Organic farming systems are widely regarded as ecologically safe, although
some environmentalists in China worry they could encroach on local forests
and grassland.

As experts in the organic field flock to Jilin and Heilongjiang to train and
to contract local farmers, there are also some fly-by-night investors who
risk damaging the sector by expanding it too rapidly and recklessly.

"It's a pity forests in Heilongjiang are being cut down in the name of
organic projects," said an industry source, who preferred to stay anonymous.
"If you compare the landscape now with that of 10 years ago, it is
completely different."

Despite environmental laws protecting native forests, the source said, some
local officials were tempted to close their eyes as they could earn money
from exporting natural resources.

While others said they had not seen such cases, they were aware of fragile
grassland in Inner Mongolia being turned into organic farms. Land was also
being replanted with trees after farmers cultivated more than they were
authorized to.

"It is in a state of confusion. Now there are several dozen organic food
traders in China alone," said Chen Dejiang, general manager of Heilongjiang
Longqi Organic Food Development Co.

"Some offer low prices for what they call organic products for the sake of
winning business," Chen said at his company office in Harbin, the provincial
capital of Heilongjiang.

The officials said foreign buyers were now sending more inspectors to farms
or processing plants in China to enforce higher international standards of
organic products.

Japanese wary

In a scandal two years ago, Japanese importers found pesticide residues in
frozen spinach shipped from Shandong Province, which was labelled as

"The damage has been much too serious. Many Japanese have turned away from
China. It's all unfortunate," said Yutaka Takahashi, a certifier of organic
products from Japan Organic & Natural Foods Association, headquartered in

In Harbin, on a tour through China, Takahashi added: "I've seen great farms.
But you cannot control each and every single farmer ... The temptation is
there to mix it up as organic products get better prices and you can't see
the difference.

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