Country Report of China

Country Report of China

By Mr. Xu TianxiangBy Mr. Xu Tianxiang Ms. Lu YaoMs. Lu Yao Mr. Chen zhiweiMr. Chen zhiwei

Training Course onAgriculture Sector Value Chain

Analysis and Promotion28 November – 9 December 2011

Country General Introduction

Flower industry of Yunnan

Problems, opportunities and challenges in China

Country General Introduction

GMS area in China

YunnanYunnan located in the far southwest of the country spanning approximately 394,000 square kilometers (152,000 sq mi) and with a population of 45.7 million (2009). The capital of the province is Kunming. The province borders Burma, Laos, and Vietnam.

GuangxiGuangxi's location, in mountainous terrain in the far south of China, has placed it on the frontier of Chinese civilization throughout much of China's history.

Govt and NGO’s interventions related to Agri Value Chain –

Govt.

• History• Before 1978• 1978—1983• 1984—1992• After1993

• Role• Policy maker• Facilitator• “mother”• “Mediator”

Govt and NGO’s interventions related to Agri Value Chain --

NGO

International NGOTraining

Community intervention

Research

Govt and NGO’s interventions related to Agri Value Chain --

NGO

Farmers’ Professional CooperativesOrganized to improve productivity

Organized to looking for market

Organized to increase added value

Govt and NGO’s interventions related to Agri Value Chain --

NGO

Academic / Research Institute Scientific contribution

Economic analysis

“Production – Academic – Research “ mechanism

Private sector take the lead

FLOWER INDUSTRY OF YUNNAN

Diversified and Colorful Flowers in Yunnan

Diversified and Colorful Flowers in Yunnan

Owing to the special natural conditions, Yunnan is not only rich in biological resources, but also provides a good soil for many exotic ornamental plants.

Diversified and Colorful Flowers in Yunnan

Since the 1980’s, Yunnan’s flower trade has made tremendous progress. The cut flower business of Yunnan has greatly developed. More than 50 cultivars of cut flowers have been cultivated in a large scale in the city of Kunming.

Diversified and Colorful Flowers in Yunnan

The Dounan Wholesale Flower Market in Chenggong County has become the biggest flower market in southwestern areas of China.

Present Condition of Yunnan’s Flower Industry

1. The flower industry has been of certain scale.

Value

2002 2010 2020 future

7,864.7 hectares 3.41 billion RMB Yuan 2.334 billion branches

40 billion RMB Yuan

11

22

33

42 thousand hectares 23.22 billion RMB Yuan 6.05 billion branches

Present Condition of Yunnan’s Flower Industry

2. Yunnan leads fresh-cut flower production in China.

51.0%51.0%

2.3%2.3%9.4%9.4%

15.9%15.9%

15.4%15.4%12.3%12.3%

Present Condition of Yunnan’s Flower Industry

3. The regional layout begins to take shape.

Present Condition of Yunnan’s Flower Industry

4. The occupancy in domestic markets and the export volume increase rapidly.

About 80% of the fresh-cut flowers produced in Yunnan are sold to over 70 large and middle-sized cities in the whole country, about 10 to 15% of the flower products are exported to more than 40 countries and regions

Present Condition of Yunnan’s Flower Industry

5. The enterprise structure and function become more and more complete.

Present Condition of Yunnan’s Flower Industry

6. The establishment and operation of Kunming International Flower Auction Market and Yunnan Flower Logistic Center

Present Condition of Yunnan’s Flower Industry

Flower price of Dounan Flower Market on 01/12/2011(http://www.yunnan-flower.org.cn)

backwardness and problems with flower

Factors in favor of the industry’s development

The commencement of the early harvest plan of China ASEAN Free Trade Zone focusing on zero tariffs and China’s entry into WTO provide Yunnan’s flower industry with a broad development space. Yunnan’s flower industry will directly face the whole world, especially the regional grand international market with a population of 1.7 billion, a total GDP of more than 2,000 billion US dollars, and a total trade volume of 1,300 billion US dollars.

Factors in favor of the industry’s development

The implementation of the West Development Strategy, construction of ecological environment, and quickened urbanization offer a good opportunity to flower industry development. With the guidance and support of governments at all levels, Yunnan’s flower industry develops steadily in production scale and benefit and has been of the foundation for overall upgraded development.

Factors in favor of the industry’s development

The ever-increasing consumption demand has become a driving force for flower industry’s development. The flower consumer market shows high-speed expansion. In recent years, the flower consumption in the world increases by an annual rate of 10% and the domestic flower consumption also grow by over 16%.

Factors in favor of the industry’s development

The international flower production transfers from the developed countries as the traditional production areas to the developing countries, which are of more superior climate conditions, richer resources, and cheaper labors. Such transfer brings an important strategic opportunity to development of Yunnan’s flower industry.

Factors in favor of the industry’s development

The possession of superior resources lays a good foundation for further development.

Development Ideas of Yunnan’s Flower Industry

The possession of superior resources lays a good foundation for further development.

Development priorities of Flower Industry of Yunnan

Priorities in product development in developing flower industry, Yunnan will lay stress on production of the fresh-cut flowers and attach first importance to strengthening scientific and technological advance and innovation of the major fresh-cut flowers.

Development priorities of Flower Industry of Yunnan

Priorities in scientific and technological research and development:-- Introduction and breeding of new varieties,

-- Introduction and research of breeding technologies for flowering bulb seed balls,

-- Protection, development, and utilization of wild flower resources,

-- Introduction and research of technologies on flowers’ post-harvest processing, preservation, storage, package, and transport,

-- Introduction and research of key technologies on flower production,

-- Introduction and research of flower greenhouse facilities, equipment, and base material production technologies.

Countermeasures for Development of Flower

Strengthen marketing measures and promote entry of Yunnan’s flowers into world markets Construct marketing platform for flower industry

Enlarge investment and bring varied investing and financing channels into being Increase proportion of financial fund investment

Countermeasures for Development of Flower

Strengthen macro regulation and control and lay a good foundation for upgraded development

Depend on scientific and technological innovation, and upgrade scientific and technological standard of flower industry Set up and consummate flower scientific and technological research, development, popularization, and service system,

Countermeasures for Development of Flower

Consummate service and socialized service system, lay stress on consummating organizational management system

Regard talents as the fundamental factor, and strengthen construction of talent groups in science and technology, production, operation, and management…

Problems, opportunities and challenges in China

Agricultural value chain ——from farmers to consumers

farmer

farmer

farmer

farmer

farmer

farmer

farmer

consumers

consumers

consumers

consumers consu

mersconsumers

MarketCompanies Government

Cooperatives

In China, with the aim of helping farmers assessing into market and improving China's agricultural competitiveness, promoting agricultural integration has been important issues for China's government in recent years.

The projects of agricultural integration cover industrialization of breeding and cultivation of excellent new varieties and fine strains; high-efficiency, eco-friendly planting and aquatic breeding technology; water-saving and precision technologies; downstream processing of agricultural and ancillary products; pollution-free inputs and the establishment of an agricultural information platform.

4.1 Value Chain and Agricultural Integration

• It’s hard for farmers to make rational decision when facing the fluctuation of the market

• small-scale diffused peasant farmers with limited resources

4.2.1 Farmers’ role in agricultural value Chain

"Enterprise + Peasant“: the basic organizational mode of agricultural integration in China

Graph 3. Market modular of "Enterprise + Peasant"

Table 1. The actors and their expectations in agricultural integration

Actors Expectations

Farmers To Increase income

Enterprises To gain maximum profit

ConsumersTo get safe food and achieve maximum satisfaction

4.2.1 Consumer’s need in agricultural value Chain

A Case study on Chinese milk scandal in 2008

The 2008 Chinese milk scandal: a food safety incident involving milk and infant formula, and other food materials and components, adulterated with melamine.

Poor quality control and production methods. Consumers had severely lost confidence in the

industry.The company, Sanlu, bankrupted.Sales fall by 30-40% , financial effect ¥20

billion.

4.3 Suggestions

To distribute profit fairly in order to foster sustainable partnership

To develop farmers’ cooperatives Government’s role in promoting value chain in agricultural sector

Government’s role in providing safe food

Thank you&Welcome !