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Design of the Sino-Dutch Innovation and Training Center in WeifangResult of the fact finding mission on 3-8 November 2016

Chris de Visser, Wageningen Plant Research, Han Soethoudt, Wageningen Food and Biobased Research, Anne Mensink, Food Valley NL, Liu Zhen, Wageningen Food and Biobased Research & Qiu Yu Tong, Wageningen Plant Research

Design of the Sino-Dutch Innovation and Training Center in Weifang

Result of the fact finding mission on 3-8 November 2016

Authors Chris de Visser, Wageningen Plant Research, Han Soethoudt, Wageningen Food and Biobased Research, Anne Mensink, Food Valley NL, Liu Zhen, Wageningen Food and Biobased Research & Qiu Yu Tong, Wageningen Plant Research

This study was carried out by Wageningen University & Research and Food Valley NL and was commissioned and financed by the Weifang government and the Topsectors Agri & Food and Horticulture (T&U) of the Netherlands

Wageningen, November 2016

Report 729

Visser, C.L.M. de, H. Soethoudt, Qiu Yu Tong, Liu Zhen and A. Mensink, 2016. Design of the Sino-Dutch Innovation and Training Center in Weifang. Result of the fact finding mission on 3-8 November 2016. Wageningen Research and Food Valley NL. Report 729. Summary This report is the result of an fact finding mission to the Sino Dutch Innovation and Training Centre in the region of Weifang in Shandong province of the People’s Republic of China. The goal of the Centre is to upgrade the Weifang agrifood supply system towards more food safety, profitability and added value. The fact finding mission was organised in close collaboration with the Weifang government and Food Valley China. The Wageningen University & research experts and the representative of Food Valley NL have visited many companies and organisations active in the vegetable supply chains of Weifang. This report and proposes a design of the Centre, based on the findings and discussions during the Fact Finding mission. Keywords: innovation, training, Chinese-Dutch co-operation © 2016 Wageningen, Stichting Wageningen Research, P.O. Box 16, 6700 AA Wageningen, The Netherlands; T +31 (0)317 48 07 00; www.wur.nl © 2016 Food Valley NL, Nieuwe Kanaal 9 d-3, 6709 PA Wageningen, www.foodvalley.nl Chamber of Commerce no. 09098104 te Arnhem VAT NL no. 8065.11.618.B01 The intellectual property rights of this report are owned by the Municipal Government of Weifang City, Wageningen University & Research and Food Valley NL. The report is confidential. Stichting Wageningen Research and Food Valley NL are not liable for any adverse consequences resulting from the use of data from this publication. Wageningen University & Research, Confidential Report 729 Photo cover: Food Summit Weifang 2016

http://www.wur.nl/

A joint Wageningen University and Research and Food Valley NL Report 729 | 3

Contents

Preface 5

Summary 7

1 Introduction 9

1.1 Agrifood in the Weifang region 9 1.2 Food Valley China 11 1.3 Vegetable production 11

2 Goal of the project 13

3 Information collected during the fact finding mission 15

4 Identified innovation needs 17

4.1 Innovation model 17 4.2 Production of fresh vegetables 18 4.3 Logistics, processing, marketing and branding 19

5 The Sino-Dutch Innovation and Training Centre 23

5.1 Design 23 5.2 Themes and subthemes 24 5.3 Office 24 5.4 Local team 25

6 Cluster Development, Food EXPO and Food Valley AWARD 27

6.1 Cluster Development 27 6.2 Food EXPO 27 6.3 Food Valley Award 28

7 Implementation 31

7.1 Pesticide reduction 31 7.2 Soil quality 32 7.3 Greenhouse technology 33 7.4 Cold chain 34 7.5 E-commerce 34 7.6 Inspection: detection, food fraud and unknown and emerging compounds 35

8 Budget and activity planning 37

8.1 Planning 2017 38 8.1.1 Expo (promotion/communication) 38 8.1.2 Training and demonstration 39 8.1.3 Co-innovation 40

Annex 1 Literature 43

Annex 2 Short summary of visits 45

4 | A joint Wageningen University & Research and Food Valley NL Report 729


Preface

The collaboration between China and The Netherlands is getting more and more intense. Wageningen University & Research and Food Valley NL have a history of exchanging information and know-how and will continue to do so in the years to come. The Weifang initiative of a Sino-Dutch Agrifood Innovation & Training Centre fits well into this ambition. Wageningen University & Research and Food Valley NL have much to offer in supporting the development of the Chinese food production, logistics, processing and in food safety management. The combination of both organisations offers special added value because they combine the best of Dutch scientific and applied knowledge with access to Dutch agrifood companies and their innovation initiatives. We expect that the Sino-Dutch Agrifood Innovation & Training Centre will play a pivot role in the upgrading of the Chinese agrifood sector and are looking forward to a close and fruitful co-operation in Weifang area of Shandong province in China. Raoul Bino, General Manager of Wageningen Food & Biobased Research Ernst van den Ende, General Manager of Wageningen Plant Research Roger van Hoesel, Managing Director of Food Valley NL


Summary

This report is the result of a fact finding mission of experts from Food Valley NL and Wageningen University & Research to develop a strategic plan for the development of a Sino Dutch Agrifood Innovation & Training Centre in Weifang (SDAFITC). This activity was commissioned by the municipality of Weifang and is part of its ambition to upgrade the agrifood chains in the region. Financial support was also received from the Dutch government (Topsectors Agri&Food and Horticulture & Starting Materials). The functionality of the Centre will be to combine Dutch and Chinese expertise and professional experience in order to implement modern technologies and state-of-the-art knowledge in Weifang food value chains from production to consumer. The expert team visited many companies, institutes and other organisations in the region that can and will play a vital role in the upgrading of the agrifood sector. These visits helped the team in getting a good understanding of the present day level of development and of the support that the Netherlands could effectively offer. The team stressed that innovation needs a strong co-operation between all stakeholders involved and that markets play a key role in application of technologies and knowledge. This requires tailor made solutions. A design of the SDAFITC was produced and discussed and three distinctive activities of the Centre were presented: expo, training and co-innovation. The expo activities are needed to inspire co-operations, companies and organisations in upgrading their own operations and to show stakeholders the progress that is being made. The training activities will be set up to transfer state-of-the-art knowledge from The Netherlands to Chinese farmers, co-operations and companies and translate this to their own situations and use it to upgrade their activities. These activities not only include vocational training but also demonstrations of new technologies. Co-innovation activities will be set up to transfer technology and knowledge to realise innovations in companies and co-operations. This requires intense co-operation between several partners to ensure a smooth implementation process. All the activities of the SDAFITC will be organised in projects with specified goals and budget need. Based on indications provided by the organisations and companies visited, the expert team has listed potential projects for the SDAFITC to set up and carry out. Yet, this requires a prioritisation process that needs to be implemented in the structure of the SDAFITC itself where Wageningen University & Research and Food Valley NL have an advisory task. At present, this potential list includes activities to be set up in greenhouse and open field vegetable production, value chain design, technology and operations and food inspection technology. However, the team advises on a fact finding mission on animal production and value chain as well as inspection innovation need to be set up to get a broad inventory of potential activities and thus to be better equipped to prioritise the Centre’s activities. Yet, it is also advised to set up a limited number of activities on vegetable production and value chain that are much needed and are identified as essential innovation needs: solar greenhouse technology improvement and cold chain development. The expert team believes strongly that not only the knowledge and technology of Wageningen University & Research and Food Valley NL can be effective in the upgrading process but that’s also their networks in Dutch technology companies could very well contribute to the upgrading process in Weifang agriculture. The SDAFITC will also be a platform where companies from both Weifang and The Netherlands can meet and exchange ideas and set up fruitful co-operations.


1 Introduction

1.1 Agrifood in the Weifang region

Shandong Province lies on the east coast of China; it covers a land area of 157,000 km2 and has a coastline of 3,000 km, 1/6 of China’s total. Shandong is the second most populous province in China with a total population of 97 million (2014).

Figure 1. Provinces of China and their population.

Shandong province is the country's largest agricultural province with respect to production and trade. It is an important base for agricultural production, processing and export in China. It is the leading province in China in terms of total value, added value, total import and export of agro-products for the last consecutive years. In 2014 the province’s vegetable production was 99,74 million tons, an

increase of 3.3%; fruit production 31,34 million tons, fruit gardens 16,66 million tons, an increase of 4.0% ; the province's meat output 7,70 million tons and 2,90 million tons of milk production, an increase of 3.0%. In production of broilers Shandong is by far the largest (Figure 2). Aquatic production was 9,04 million tons, an increase of 1.8%, and, the total output of grain 45,97 tons 1.5% more than last year ; oil production 3,36 million tons, down 3.9%. In terms of sown area Shandong is the leading

province for vegetables, number 2 for peanut and cotton and number 3 for grain crops, whereas for oil-bearing crops and orchard Shandong is number 6.

Figure 2. Production of broilers per annum [2].


Weifang is the main Chinese export region of vegetables. In 2015, exports of vegetables and products

Figure 3. Gross agricultural production per province in China (in 108 RMB) [1].

Figure 4. Shandong export value in share and in million USD [1].


amounted to 1,079,000 tons, the value of $ 1,003,000,000. These exports accounted for 1/3 of the province's export and 1/8 of the country. The city's annual food production has hit 5 million tons, with vegetables comprising 1.2 million tons, meat 1.4 million tons and seafood 600,000 tons1 For poultry export Shandong and Weifang play an important role as well. The main export markets are Japan and ASEAN2 countries. Poultry exports of Shandong accounted for 50% of China.

1.2 Food Valley China

Weifang is an important base for producing, processing and exporting of agricultural products, and also a national modern seed innovation base and demonstration plot for international cooperation of agriculture. The central and coastal location of Weifang makes it one of largest trading and logistic centre of fresh agrifood. Food Valley China, founded by the Weifang government, aims to capitalize on their excellent agricultural position in two ways. On the one hand by supporting development and implementation of knowledge in logistics, processing, financial flow, IT, E-commerce and legal services, and on the other hand focusing on creating food industry brand in Weifang, enhance core competitiveness of the food industry in the region and promote the transformation and upgrading of agricultural and the Weifang economic development as a whole. Food Valley China wants to initiate a platform that produces, processes and trades safe, secure and trustworthy food and their orientation is towards the province, the country and the world. Food Valley China wants leading companies in food industry and agriculture to invest in this region, Food Valley China also wants knowledge institutes like Wageningen University and Research and UC Davis to become part of the upgrading process of the agrifood chains in Weifang region of Shandong province. From an organizational point of view Food Valley China is managed by the Food Valley Office, headed by Weifang government. Food Valley Office supervise the activities of the Food Valley Group Co. Ltd, where the main topics of the above strategy are addressed: IT, branding, strategy, finance and development.

1.3 Vegetable production

In 1988 the Ministry of Agriculture in China proposed the "vegetable basket project". The first phase of the project was to establish a central and local meat, eggs, milk, aquatic products and vegetables production base, and a breeding, food processing and service system, in the first place to ensure that residents can eat fresh vegetables throughout the year. By the middle of 1990s the production grew rapidly, to fundamentally reverse the situation of China's long-term shortage of food supply. Vegetable planting area is around 3 million mu, the annual output is more than 7 million tons and per capita consumption of fresh vegetables is 500 kilograms. This brings China to rank number one in the world on vegetable consumption. According to the Department of Agriculture the national vegetable output between 2005 and 2014 increased from 5.6 million tons up to 7.7 million tons. Vegetables are mainly sourced from Shandong, Hebei, Henan, Jiangsu, Sichuan, Hubei, and Hunan, which together cover more than 50% of the vegetable production in China. In Shandong, the main vegetable products are Chinese cabbage, garlic and onion. Shouguang is the origin of vegetable tunnel greenhouses with 800,000 mu protected vegetable cultivation. The Shouguang “vegetable basket” is the country’s largest one and the national modern agriculture demonstration zone and national modern seed development and innovation base. Weifang is an important vegetable supplier of the surrounding metropolitans including Beijing, Tianjin, Jinan, Qingdao and Shanghai.

1 http://www.chinadaily.com.cn/regional/2016-07/22/content_26184778.htm viewed 22-11-2016 2 Association of Southeast Asian Nations (ASEAN) ASEAN Membership: 10 States — Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar,

Philippines, Singapore, Thailand, and Vietnam

http://www.chinadaily.com.cn/regional/2016-07/22/content_26184778.htm


Table 1. Vegetable production in Shandong province 2013 [1].

Nr. Vegetable Variety Sown Area

(×103 Ha)

Y-O-Y Growth

Output

(×103 Ton)

Y-O-Y Growth

1 Garlic & Onion 348.0 0.2 13,039.6 0.9 2 Chinese Cabbage 255.3 4.9 15,104.5 4.7 3 Cucumber 112.1 -0.9 7,232.1 1.7 4 Potato 110.2 -1.1 4,650.7 3.5 5 Tomato 77.9 0.5 5,010 -1.5 6 Celery 67.5 13.6 4,064.5 20.3 7 Eggplant 62.8 2.8 3,719.4 4 8 Spinach 59.9 1.3 2,619.7 4.2 9 Pepper 56.4 6.7 2,811 9.4 10 Ginger 53.7 -1.6 2,950.5 -0.6 Sub-total 1203.9 -- 61,202 --

Vegetable total in Shandong 1832.9 1.5 96,582 2.9


2 Goal of the project

The Weifang government and Food Valley China have been taking steps to upgrade the agrifood supply chains in the Weifang region. Food safety and added value are especially targeted by their strategy. State-of-the-art technology across the value chains is required to support this by creating new products and services. Next to a Sino-US collaboration already in place, the Weifang government and Food Valley China have expressed their wish to establish an equivalent co-operation with Wageningen University & Research and Food Valley NL to support the agrifood ambitions of the region. To this end, a fact finding mission was organised to develop a strategic plan for the Sino-Dutch co-operation. This report is the result of the mission and as such proposes a design of the Sino-Dutch Agrifood Innovation & Training Centre (SDAFITC) in the region of Weifang, in the province of Shandong, China. As a case study, the mission focussed on the vegetable chain. But it must be emphasized here that the Centre also needs to cover other sectors, like for instance the livestock and meat industry. This report gives an advice on how to involve this sector in the Centre next to the vegetable supply chain. This report describes how the Centre can be organised, what is needed to implement the co-operation between the parties involved, who needs to be involved in the implementation and what aspects the Centre needs to address. If the parties concerned agree on the contours of the Centre as described in this report, than the implementation phase can start.

Figure 5. International food Summit Weifang., November 2016.


3 Information collected during the fact finding mission

The team for the fact finding mission was composed of experts from Wageningen University & Research and Food Valley NL. The names of the participants are mentioned in Table 2.

Table 2. Participants in the fact finding mission.

Name Organisation Expertise

Chris de Visser Wageningen Research Applied plant sciences

Han Soethoudt Wageningen Research Agrifood management and logistics sciences

Qiu Yu Tong Wageningen Research Crop protection science

Liu Zhen Wageningen Research Agribusiness and Innovation Management

Anne Mensink Food Valley NL Agrifood cluster development, innovation

Wageningen University & Research is a world leading knowledge organisation that combines the university excellence with effective innovation, training and implementation activities. This unique combination within one organisation makes the organisation an attractive partner in state-of-the-art technology and knowledge development. The organisation of Food Valley NL has created a large international network of excellent agrifood companies involved in safe, healthy and sustainable food. Food Valley NL’s expertise is to support the innovation power of their network companies

During the mission, the team has focussed on vegetable value chains. This is a product group that is one of the dominant agro products in the region for which the region is also well known within Shandong and China.

Figure 6. A moment to capture during one of the visits.


The team visited a number of Weifang companies, most of which are the so called “dragon head enterprises” that can be considered to be leading innovators in their role within the agrifood value chain. The companies are listed in Annex 1 and are active across the value chain of fresh vegetables from producers, logistics, marketing and service and input providers. During the visits, the team interviewed the entrepreneurs on their role within the value chains, the improvements that they are working on and the challenges they feel lie ahead. This resulted in a list of innovation needs that is a valuable input to the Sino-Dutch Innovation and Training Centre.

Also, the team has had clarifying discussions with knowledge institutes, the Weifang government representatives and staff members of Food Valley Group China. These discussions gave the team a thorough understanding of the development of the value chain and of the role and support activities they expect from a Sino-Dutch Innovation and Training Centre.

At the end of the mission, the team presented their view on a design of the centre and the activities that could be developed, to the Weifang government and Food Valley Group Company. The subsequent discussion lead to a shared view on the design. This shared view is explained in this document.


4 Identified innovation needs

4.1 Innovation model

Wageningen University & Research and Food Valley NL have extensive experience in innovation processes. To explain the methodology, it is important to first define innovation. Innovation is a technology, a service or a product within a company that is new, better and is working. This company can be active in any part of the value chain, including farmers

There are a number of factors that can lead to failure when developing an innovation. That can be for example communication, the market, knowledge or physical infrastructure, or a lack of research or business partners. Communication can lead to misunderstandings and a lack of effective co-operation. State-of-the-art knowledge should be available while markets should support the innovation. Available physical infrastructure is often essential to making innovation work. Thus, innovation needs intensive co-operation and an integral approach as is schematized in Figure 7. This approach can be described as co-innovation. It means that companies, government and knowledge providers should closely and effectively work together with a shared view on what the innovation should look like, how it will work and be implemented. For this, it is essential that the co-innovation process should start with a clear design so that all required inputs can be effectively deployed. At the level of the farms and producers of fresh vegetables, it is of course important that innovations are spread within the community so that other farmers can profit also and the quality of the farming business can be raised across the whole sector. To this end, demonstration and training are very effective measures. During our visit, we have identified effective partners to work together with to make sure innovations will be widely used within the farming community.

INNOVATION

Knowledge Research Company Knowledge

Inte

gral

app

roac

h

Figure 7. Simplified co-innovation model.


Figure 8 displays how innovation by the leading farmers can inspire a larger group of growers that are somewhat reluctant in applying innovations and will only follow when witnessing the profitable effects elsewhere. On their turn, this group can inspire the farms that are lagging behind to follow the innovation process at a later stage. In this whole process, training and demonstrating are important instruments.

4.2 Production of fresh vegetables

From the different interviews and company visits, a number of innovation needs were mentioned. In this paragraph, a summarized version is presented.

An improved climate control in the traditional solar greenhouses. These greenhouses are mostly equipped only with elementary control mechanisms like shading. But an improved control of the internal climate leading to a better product quality, is often brought forward as a wish for improvement.

Soil quality and structure: during several visits, a poor soil quality was named that is hindering higher yields and better product quality. Mostly, the structure of the soil seems to be inadequate. The question is what is causing this and how it can be repaired. As far as greenhouses are considered, the soil problem could be solved by introducing other substrates (soilless cultures) for rooting and fertilization and water supply (fertigation system).

Reduction of pesticide use: this seemed to be of primary importance as this was mentioned in many of the interviews. In solar greenhouses, innovations are needed on biological control of pests and diseases. Also, biopesticides were named as well as training on awareness and improved use. Improved use often is the easiest short term method to gain improvement. The right plant protection agents at the right timing and rate, together with the right application technique can influence efficacy substantially and thus reduce the input. Biocontrol in greenhouses in combination with biopesticides are the best way to safeguard the food safety of fresh vegetable produce but require good training and guidance during implementation.

Stabilizing product quality was mentioned especially in the e-commerce branch. Customers require a constant and high level quality and the question is how the growing conditions can be controlled in a way that supports stable, high quality.

Followers

Farms lagging behind

Figure 8. Upgrading the producers level.

Innovators


Standardization in equipment and cultivation: this innovation need is very much inspired by the problems encountered during cultivation en machinery use and the lack of efficient interaction between them. This requires more labour and reduces the efficacy of controlling labour cost and improving produce quality.

Salinization is recognized by several as an increasing problem in outdoor vegetables. It was mentioned in several of our visits. As far as greenhouses are concerned, soilless cultures could be a viable solution.

4.3 Logistics, processing, marketing and branding

The perishable nature of fresh vegetable products requires consumption soon after production. A cold chain increases the shelf life of these products, but in general in China the building blocks of such a supply chain are absent, especially in the case of vegetables, imposing high losses in this food category. China’s rapid growth puts pressure on logistics and distribution structures, which is not developing as fast as the market. A typical vegetable supply chain structure is given in Figure 9.

The number of stakeholders is large and it is mainly a push market, which are main reasons why there is a lack of coordination in logistics and quality control. From the field visits it became clear that whenever certification according to international standards (HACCP, GlobalGAP) was achieved supply chains were organised better and high-end markets like McDonald’s, Metro, Carrefour, etc. become partners. The logistic sector is not only very fragmented also warehousing and storage facilities are behind with respect to technology and size. Transport is an issue as well, since for vegetables 90% is transported without cooling, which is unimaginable in developed countries. Table 3. Top 10 provinces with cooled trucks in 2016 [6].

Number of refrigerated trucks per province in 20163 Province Refrigerated trucks Province Refrigerated trucks Shanghai 17292 Shandong 4486 Henan 14075 Jiangsu 3300 Guangdong 7114 Fujian 3269 Beijing 4901 Xinjiang 3204 Hunan 4702 Hebei 1776

3 Note that these trucks transport mainly meat,dairy, ice cream, fish and frozen food

Figure 9. Schematic overview of the vegetable supply chain in China [2].


Remark: in the Netherlands (4x smaller than Shandong and 1/6 of the population) there are 7365 trucks for cooled transport and about 25.000 trailers and semi-trailers [7]. This lack of facilities and cold chain elements is hampering food multinationals from expanding into China’s second-tier and third-tier cities. One way to deal with the perishable vegetables is the development of the processing industry. It provides a longer shelf life, adds value and can serve as an ready-to-use ingredient supplier for other food-processing companies. The increasing disposable income of the Chinese consumer will support and enable this development. There are several reasons that clarify the current situation [4]:

• The length of the vegetable supply chain is so long that no one makes money • There is hardly any added value in the vegetable supply chain • Logistic costs relatively high because of low efficiency • Push markets have no guaranteed price, impeding investments in the supply chain • Local governments in many cases protect their local transportation companies by raising

barriers, including license requirements, fees and inspections • Logistic capabilities are restricted due to inferior equipment • Workers are often not well trained in handling goods • Truck drivers are responsible for their freight and since vegetables are highly sensitive to

decay they don’t prefer to transport this food category Based on previous considerations and interviews with logistic companies the following innovations are proposed:

a) Standardization. In many ways standardization helps to upgrade the supply chain. An

example is given by the logistic company LOSCAM, where discharging by pallets of a 12 MT truck can be reduced from 3-4 hours to 15-20 minutes4. Another example is packaging. Packaging can have a huge impact on the product quality as was shown in one of our interviews where the permeability of the packaging material affects the ‘breathing’ of the live vegetable product inside. But in many cases losses are due to mechanical damage and this can be avoided by stackable crates that moreover matches the size of the pallet and can be exposed directly in the store.

b) Training of personnel operating in post-harvest management, as well at farm level as in logistic hubs and transport business

c) Use of information technology with various applications: - Building up market knowledge by storing data - Tracking and tracing - Digital transaction information flow - Financial transaction

4 Presentation LOSCAM, food summit 2016-11-04 Weifang

Figure 10. Standardized carrier: 100x120 cm pallet.


d) Integrate logistic functions (3PL) to achieve better control on logistic performance and product quality. In most cases there is no connection between the logistic services between the links in the supply chain.

e) The Weifang government and Food Valley Company intend to instigate the logistic development of the region and set up standards for perishable logistics, to be expanded and marketed over the country as a brand. This brand should be ‘loaded’ in such a way that export conditions towards US and EU are met.

Figure 11. Above 2 images are unstandardized packaging; the below 2: are standardized crates.


5 The Sino-Dutch Innovation and Training Centre

5.1 Design

The scheme presented in Figure 12 shows how the different stakeholders are bringing their resources together in the Sino-Dutch Innovation and Training Centre. The yellow arrows indicate financial resources while the blue arrows are linked to the direct stakeholders of the Centre. They bring in co-operation skills, knowledge and know-how. The green arrow represents the final result of the activities. A return-on-investment from the innovations represent the long term sustainability of the Centre.

It is proposed that Food Valley China would be the Chinese stakeholder to be responsible for the centre. It matches very well their tasks regarding the development of Food Valley in Weifang and the companies working there and with the aim to modernize the agrifood value chains. The Sino-Dutch Innovation and Training Centre will be one of the instruments that Food Valley China has at its disposal to meet the tasks mentioned. A network of companies in the Weifang region should be linked to the centre to work together in order to create innovations in their businesses. Wageningen University & Research has a wide range of knowledge, technology and know-how at its disposal to link to the centre when needed while Food Valley NL brings in their knowledge and experience on how to stimulate cluster / network / platform building, how to develop services and activities in order to

Weifang

government

Food Valley China

Advisory board & Office

Activities of the Sino-Dutch Innovation and Training Centre

WUR and FVNL

Companies

H2020, topsectors,

RVO

INNOVATION

Figure 12. Schematic structure of co-operation and resources.

Other Chinese based Resource

funds


stimulate innovation and how to facilitate interaction between agrifood companies within the Weifang area . Furthermore, interaction between Weifang agrofood companies and Dutch agrifood companies and organisations can be facilitated. Wageningen University & Research and Food Valley NL will exert their networks in The Netherlands agrifood community with the aim to access grants from Europe (H2020), the Dutch government (RVO) and the Dutch topsectors on horticulture and Agri & Food and link them to co-innovation projects in the Weifang area. However, neither Wageningen University nor Food Valley NL can influence the outcomes of these grant processes. This is why these resources cannot be accounted for when setting up the Centre. They should be considered only as a possible extra.

The Weifang government supports the co-operation with financial resources while the centre is accountable for efficient and effective use and realization of innovations that upgrade the agrifood chains.

5.2 Themes and subthemes

During the inception phase, the team has put together a list of themes and subthemes in close collaboration with China Food Valley Group Company. This list is a gross list of the themes that are considered essential to the upgrading of the Weifang agrifood chains. The ninth theme is one that was frequently mentioned during our visits and is therefore very important. Nevertheless, this is not something to which Wageningen University & Research or Food Valley NL have a credible track record on. Yet, we can link to companies or organisations that have this excellence.

Table 4. Gross list of themes and subthemes to be addressed by the Sino-Dutch Innovation and Training Centre.

Number Theme Subtheme

1 Agricultural production Standardization, greenhouse facilities, pest and disease control and prevention, ...

2 Cold chain orientation Preservation, refrigeration technology , logistic design, cold chain information platform,...

3 Inspection and testing Inspection and test standardization; soil, air purification, and sewage treatment,...

4 Markets Supply chain management and finance, trading platform construction,...

5 Security and nutrition Control of safety standards, research and development of nutritional food,...

6 Big data Analysis of production, processing, distribution, logistics, trading, inspection data,...

7 Headquarters base Scientific research institutes, colleges and Universities ; company headquarters,...

8 City planning Food town, the International Food Exhibition Center,...

9 Brand management Not the expertise of Wageningen University & Research

On the other themes, Wageningen University & Research and Food Valley NL can contribute substantially as these themes belong to the core business of the organisations. Yet, some subthemes may not be matching the excellence of either of both partners. Nevertheless, both organisations have many linkages to Dutch agrifood companies that can complete the required expertise to find solutions or create innovations.

5.3 Office

In paragraph 5.1, we have presented the position of the Sino-Dutch Agrifood Innovation & Training Centre embedded within the network of relevant stakeholders, while in paragraph 5.2 we have listed the themes on which this Centre will operate. In this paragraph, we would like to propose an internal


Advisory board: FVC, WUR and FVNL

General Manager

Co-innovation

Expo

design of the Centre. This design should be robust, simply and efficient. The design will follow the main activities of the Centre, each of which are led by a Director, which are:

a) Projects: this functionality of the Centre refers to the co-innovation projects that we anticipate together with Weifang agrifood companies. Issues are described more precise in paragraph 8. The projects build on the innovation need identified during the Fact finding phase (see paragraph 4.2 and 4.3). The organisational unit will be responsible for the projects and the reporting to the board of the Centre.

b) Training: this functionality refers to the training and demonstration activities as explained in Figure 12. These activities are necessary to spread knowledge, results and promote innovations so that more impact results from co-innovation projects. For instance, upgrading a traditional solar greenhouse will be a co-innovation project at the start. But when the required result has been realized, the object can subsequently serve as a demonstration and training location to spread the innovation. The organisational unit will be responsible for the projects and the reporting to the board of the Centre.

c) Expo: this Centre unit will be responsible of expo activities like organising network events with companies, organising a food expo or a food summit. Although Wageningen University & Research and Food Valley NL can support in these tasks by advise and linking networks but the main activities as well as the lead need to come from employees in Weifang. China Food Valley Group Company would be a welcomed partner in these activities.

d) Finance and administration: this unit is responsible for good financial and administrative management of all the activities of the Centre.

Based on the above, the office structure would look like the scheme in Figure 13.

The General Manager is responsible for the Centre and is accountable to the Weifang government on the results and the resource use. The Advisory Board supports the General Manager in his or her decisions. The General Manager leads the team of Directors in the day-to-day operations and is supported by a staff covering aspects such as finance, communications and HR. The activities in the three operational departments (training & demonstration, co-innovation and expo) will comprise interactive collaborations between Dutch and Chinese experts and will be managed by the Chinese Director of each department.

5.4 Local team

The Sino-Dutch Agrifood Innovation & Training Centre will require local employees. The office staff will be Chinese employees. Depending on the nature of the activities that the Centre will deploy in the three mentioned departments, Chinese experts are needed in the Centre to carry out project, expo, training & demonstration activities. These employees will be instructed and guided by project

Training & demonstrations

Figure 13. Office structure.

Office staff


managers and experts from The Netherlands that have the first operational responsibility on the implementation of activities. At this point in time, the diverse activities of the centre are not elaborated to the extent that allows the Centre to employ people adequately. In any case, it is advisable that these people are fluent in Chinese and English to avoid communication problems as much as possible.


6 Cluster Development, Food EXPO and Food Valley AWARD

6.1 Cluster Development

The ambition of Food Valley China to upgrade modern agriculture and food industry and securing the future of this sector in the Weifang region will benefit from concurrent cluster- or network development. Economies with strong clusters achieve more added value, offer more employment opportunities, achieve higher levels of productivity and better export results. Innovation clusters, in particular, are more likely to handle the challenges the agrofood sector is facing, since finding and implementing solutions can be dealt with more efficiently and research questions can be more easily aligned with daily practices, as well as with the needs and desires of companies. In such a cluster, universities, research institutes, as well as small and medium-sized companies and big and/or multinational companies all play an important role. Furthermore, it is crucial that organizations from different agrofood domains are involved in this network. The challenges that the sector faces are multi-faceted, hence, multidisciplinary solutions involving a range of experts (sometimes even from outside the agrofood sector) are needed. Local, regional or national governments can have a very important facilitating role. However, constructive and interactive collaboration does not develop spontaneously. A catalyst is often needed. Food Valley NL has been fulfilling this role in the Netherlands, backed by a substantial number of loyal partner organizations, like Wageningen UR, FrieslandCampina, NIZO food research , KeyGene. One of Food Valley NL’s central activities is matchmaking: building bridges between potential partners to find concrete solutions for their challenges. Furthermore, communication, for example about state-of-the-art solutions that are being developed within companies or institutes, is a well-perceived service . In addition, different types of meetings are organized, for example open innovation meetings featuring a specific theme, Food Valley Society meetings (members only) and the Food Valley EXPO. In the ten years of Food Valley NL’s existence, many more services have been developed, hence, a broad range of experience has been gained. The SDAFITC could be a focal point in establishing a Food Valley China food cluster, in which the knowledge and experience of Food Valley NL with respect to cluster development would be indispensable. In addition, Wageningen University and Research is able to share valuable experience about the development of Public Private Partnerships programs. Through the in depth understanding of the power of collaborative innovation, Food Valley NL and Wageningen University and Research will, via the SDAITC, provide essential building blocks for a dynamic agrofood ecosystem in Weifang.

6.2 Food EXPO

Organizing inspiring events is an effective way to bring together various types of actors from different parts of the agrifood domain. The SDAFITC will play a crucial role in organizing such events. Such events may, for example, comprise (thematic) open innovation meetings, Food Valley China network meetings, or larger scale Food Summits or Food EXPO’s. Food Valley NL and Wageningen University and Research are willing to share their expertise is this field in an advisory role. In order to give some idea of the various options, several features of the Food Valley EXPO 2016 in the Netherlands are summarized below. Naturally, a more or less comprehensive approach can be chosen, among others depending on the type of meeting that is envisaged. The Food Valley EXPO 2016 event provided a stage for the latest agro-food technologies, innovative companies and food clusters. This event offered practical insights, the latest innovative ideas as well as options for agrofood professionals to enlarge their (inter) national network. During the Food Valley EXPO 2016, the following activities were organized:


Figure 14. Food Valley Award winner 2016: Q-Point.

• Holland Innovation Tours. Five different one-day tours through the world of Dutch agro-food and horti innovations were offered. Participants could catch a glimpse of cutting-edge developments at renowned companies and institutes in the Netherlands.

• Keynote lectures in a plenary program • Science to Business lectures in a parallel program • Pitches by Start-up companies including feedback from an expert panel • Matchmaking sessions: pre-arranged one-on-one meetings • Holland Food Valley Tasting House: innovative entrepreneurs in cooperation with a renowned

chef, prepare and present their remarkable food innovations • EXPO: companies displaying their innovation and services in an exhibition stand • Informal networking & drinks

6.3 Food Valley Award

One of the instruments that can be used to inspire companies and other organizations with respect to innovation is to invite them to participate in a Food Valley Award competition. In this competition, organizations send in information about their latest innovations in the agri-, food- or feed domain. These innovations are, for instance, new concepts, new products, innovative ingredients, newly developed technologies or processes, and so on. An independent jury evaluates the reports and shortlists the top three innovations. One of these innovations will be the winner of the Award – the jury will select the winner too, but will keep this information strictly confidential until the official announcement of the winner during the Food Valley EXPO event. The SDAFITC could trigger innovative companies or other organizations to join this competition by


explaining the benefits of being shortlisted for the Food Valley Award to them. Obviously, the chance to really win this prestigious award is an important consideration for participation. For the winner and the nominees there is an artwork trophy, a certificate and an official jury report, providing an independent assessment of innovation by a panel of expert jury members. But there are other benefits too. These benefits include national and international recognition and wide media coverage. In the Netherlands, the three shortlisted nominees all obtain a professionally-produced promotional video about their innovation. Furthermore, information about the innovation and the organisation is shared via hardcopy and E-publications globally. Examples of benefits for the winner are multiple and could also include: A two-year Gold Membership of the Food Valley China network, providing an entrance to the international Food Valley China network and customized support services. Companies, research institutes, NGOs and other organizations or groups active in the agrifood and associated industries, at any stage or link in the food chain, can submit projects or initiatives that fall within the criteria of the Food Valley Award. In addition to the new concepts, innovative ingredients or products, recently developed technologies or processes, also concrete projects or initiatives that are being implemented are considered for participation in the contest. The jury members asses these innovations on several criteria, like innovativeness and economic feasibility. Other criteria the jury members may apply are: the degree of originality, the degree of collaboration and corporate social responsibility. The jury should consist of an uneven number of persons, including the chairman. In the Netherlands, the jury members come from various types of organizations, i.e. from small- and medium enterprises, multinational companies and research institutes. The jury members are selected for their specific expertise, and cover all a different part of the agrifood domain. Hence, the jury as a whole has a multidisciplinary background, which enables them to assess the various proposals on their merits. Food Valley NL could act as an advisor and as a jury member for the Food Valley China Award. Furthermore, a staff member from Wageningen UR could participate as a jury member too.


7 Implementation

During the visits, innovation needs were collected. These fields are expected to show the main activities of the centre in the years to come. Yet, flexibility is important as other issues may rise to a priority status if required. This chapter presents those main topics and at the same time provides a short but not limited description of what Wageningen University & Research and Food Valley NL could offer.

7.1 Pesticide reduction

As indicated earlier in chapter 4, pesticide reduction was mentioned several times as a priority topic to work on. There are several ways to reduce the input of pesticides in greenhouse and open field vegetable production:

• The most simple and one of the most effective ways to increase the efficacy of a single pesticide application. A high efficacy results from using the right pesticide at the right time with the right equipment. Often pesticides are used for control a pest or disease that is not or not enough vulnerable to the active ingredients. Such a pesticide application is then superfluous and often the disease or pest gets resistance to the pesticide and less easy to control and new applications have to follow. This leads to excessive application of chemicals and results in food safety risk. Also, the wrong timing of pesticide application leads to low efficacy, thus leading to the same problems as mentioned before. Next, there are developments of equipment that are designed to result in better distribution or better targeted application of a pesticide leading to an increased efficacy, also leading to less chemicals usage. Finally, it is important to prevent resistance of pests or diseases to pesticides. This requires a balanced pesticide use by alternating pesticides with varying operating principles. To conclude, an improved pesticide management will lead to higher control efficacy, less resistance and so less pesticide use and higher yields and quality. The main instrument to use in addressing this subtopic is to train farmers and demonstrate the best use of pesticides.

• Most pesticides are used to prevent disease and pests outbreaks and thus require a carefully chosen timing of application. This can be supported by the use of advice modules that can help in deciding on the best timing based on weather data measurements. These decision support tools as they are called, need to be adapted to Chinese conditions and can be a help in some cases, especially in open field vegetables. This instrument requires more time to develop but can assist in increased awareness by farmers on when to apply a spray.

• Use of green or biological pesticides. This can be an interesting way forward, but as is the case with regular pesticides, their timing and use need to be managed carefully to result in good efficacy. It is always good to identify the active ingredients in these products so that food safety risks can be reduced.

• Biological control: especially in greenhouses biological control agents can be applied very effectively and also cost efficient. The products to be used depend on the prevalent pests and diseases, but there is ample experience and knowledge developed to implement such control options effectively in greenhouses. We propose to search for natural predators which exist in Chinese nature, and maybe to combine them with commercially available natural enemies. Use of the so called “banker plants” can provide natural enemies with alternative food in order to maintain the population in the level to protect crops from pest insects.. Training and demonstration activities are needed to implement these pest and disease control instruments.

• If plants are produced in the soil, soil borne diseases (such as Rhizoctonia and Fusarium fungi) and pests (for example nematodes) present a continuous thread to plant health. In greenhouses in China, high temperature soil treatment in summer can be effective to a certain soil depth. Beyond this depth, diseases and pests can survive and continue to threat


crops. An alternative would be soilless culture in substrates. Emerging diseases in such systems (such as Phytophthora or Pyhthium species) can be controlled by several non-chemical instruments to decontaminate recirculation water. This route requires intensive training and demonstration activities.

• Disease suppressive soils and substrates: A lot of work is being done on disease suppressiveness of soils. This means that soils do not show high disease incidence although virulent organisms can be present. This is due to abiotic and biotic elements in the soil. Organisms in the soil can compete successfully with virulent organisms for nutrients, for instance, but other mechanisms can be identified as well. The development of this defence line against pests and diseases is still in its infancy and not general available for commercial production systems. Nevertheless, it is advisable that Dutch and Chinese universities work together on exploring this field of expertise.

7.2 Soil quality

As soil quality was mentioned frequently, it is helpful to explain here what can be offered from the Dutch side on this issue. Soil quality is a complicated concept as it is the result of a complex interaction between the physical, biological and chemical aspects. For soil bound cultivation, soil quality needs to guarantee high yields and good quality products on the long run. Central to the soil quality complexity is the organic matter management of the soil as it can contribute to better physical soil structure, improved nutrient availability (chemical aspect) and improved disease suppressiveness (as mentioned before). Many farm management options have an effect on soil quality, such as crop rotation. A lack of rotation can induce many problems as it can bring unbalance to the biological eco-system of the soil. This is harder to restore than inflicting this. Improved soil quality starts with measuring soil quality parameters such as nutrients and harmful organisms such as soil borne diseases and nematodes. Soil analyses on these parameters should be followed by advises for farmers so as to act accordingly in their strategic and day-to-day operations. Wageningen University & Research can offer state-of-the-art knowledge on improved soil management. On all aspects of soil quality. Based on this, training and demonstration can be implemented in practice in Weifang.


7.3 Greenhouse technology

Greenhouse technology is mentioned several times during our visits as an interesting field of innovation.

- The most mentioned way forward would be to upgrade traditional Chinese solar greenhouses with climate (temperature and relative humidity) control technology. This has the advantage that this technology can be widely spread amongst greenhouse farmers without building new greenhouse constructions. We propose to investigate an infrastructure where several solar greenhouses are controlled by one climate computer.

- We suggest to experiment with slight adjustments in the construction of the solar

greenhouses, which make it possible create effective and automatically controlled ventilation and air movement within the greenhouse.

- Also for matters of air movement and equally distributed climate conditions: experiment with different types of fans. Monitor effects with the distribution of smoke.

- We suggest to experiment with screens in the greenhouse, which can be used for screening out excessive solar radiation on hot summer days, but also to prevent the loss of heat in the evening and the morning; which makes it possible to open the outside insulation blanked for a longer period, allowing more light into the greenhouse.

- Monitor levels of light intensity in the greenhouse. In case of periods with low light levels, investigate the possibilities of additional lighting with HPS and/or LED lighting systems. Pay a lot of attention on light distribution in the greenhouse and light interception by the crop.

- This pilot greenhouse can also be used to implement soilless culturing and water recirculation systems. Experiment with different types of substrate (cocopeat etc). New substrates ask for new nutrient an watering strategies. Biological control of pests (see above). When you are able to control pests and diseases in an IPM strategy, this will also benefit the pollination of for instance tomatoes, egg plants (aubergine) and strawberry.

- We suggest a co-innovation project with Chinese frontrunner farmers, Wageningen UR and technology suppliers to design a climate control Chinese solar greenhouse, make a demonstration pilot greenhouse and test the equipment. After successful testing, a guide for greenhouse climate control and an effective training can be implemented.

Figure 15. Solar greenhouse in Weifang.


7.4 Cold chain

The relevance of a cold chain implementation for vegetables is described in section 5.3 on logistics. Cold chain development is an essential integral element of growth in the food sector and needs to be better integrated into agriculture and food policies, strategies and action plans. Strategies for cold chain development should be adapted to specific commodity groups, and geographic and socioeconomic conditions. Collaboration among multiple stakeholders involved in the unbroken cold chain of a particular commodity is vital and currently absent mainly because of the push market system. Education, awareness and capacity building are also critical service which governments can provide. In the table below the production of food categories in the region are listed that require cold chain supply chains. Table 5. Production (x1,00 tons) of perishable products in Shandong province and Weifang[5].

Year Fruits Vegetable Meat Milk Aquatic products

Shandong province 2010 14.38 90.30 7.04 2.71 7.83 2011 14.88 91.80 7.00 2.79 8.13 2012 15.23 93.86 7.52 2.83 8.41 2013 16.01 96.58 7.63 2.71 8.51 2014 16.65 99.73 7.70 2.89 9.03

Weifang city 2010 0.92 10.89 1.23 0.27 0.45 2011 0.88 11.29 1.35 0.27 0.50 2012 0.89 11.53 1.42 0.31 0.53 2013 0.91 11.65 1.42 0.27 0.57 2014 0.87 12.00 1.40 0.25 0.60

From interviews it became clear that meat, milk and aquatic products are supplied in cold chains whereas fruits and vegetables are not, yielding high losses of 15% in 2015 [5]. To initiate development of cold chain for fruits and vegetables the following issues need to be addressed:

• Find a market where the price is high enough to justify the required investments for the cold chain. In general this implies a pull market, since otherwise there is no guarantee in price and volume

• Add value to your product to increase the sales price. This supports the opportunities for investment. Think about simple processing like sorting, grading and (standardized) packaging, but also cutting and mixing of vegetables for convenience markets and E-commerce.

• Adapt your investment to your market to optimize the feasibility. Domestic markets might have less requirements than export markets (e.g. certification).

• Watch over the whole supply chain. If your input product from the farm is bad an optimal cooled truck is not useful. An integral approach is needed to justify the added value in every link of the supply chain

7.5 E-commerce

E-commerce has been developing tremendously and brought great changes and opportunities to the traditional business environment in the past decade. Not only agriculture companies, but also farmer cooperatives and individuals can do business through e-commerce. At this stage, e-commerce only focuses on high-end consumers, who like to pay extra for the food quality and delivery, but the market will grow and especially in China there is an increasing potential of consumers willing and able to pay for this kind of shopping. However, there is much space to develop a complete and robust supply chain for e-commerce in agriculture. For example, fresh fruit


and vegetables have specific requirement for packaging, and sometimes cold chains are needed to keep fruit and vegetables fresh. The main issues in E-commerce are:

• Logistic costs are high. It is well known that E-commerce companies suffer from high logistic costs, up to 20% of the sales price, in the transition from small to medium size company. Cost efficiency should be solved by generating a competitive market for logistic service providers that are specialized in city/last mile logistics

• From the interviews a very critical issue was brought forward on the supply. Not only the quality was unstable, also the available volume does not often match the demand. The quality is crucial, since high-end consumers pay high prices and you might lose trust. As a consequence internet will ‘kill’ the brand and image of the company. Hence supply should be controlled at high standards

• The market is very unpredictable. Companies are interested in data-mining in order to better match supply and demand and hence reduce losses and logistic costs

• The transport packaging plays an important role. It preserves the product from quality decay, mechanical damage and supports communication by design and on-pack texts.

• Labor costs are sometimes high when labor is scarce. Because of the online offered variety in product composition this is hard to automate. Innovative concepts are required in this context

7.6 Inspection: detection, food fraud and unknown and emerging compounds

Around the world, food safety is a major concern for the consumers. The trust in the systems has never been so low. Traditionally, much attention has been paid to microbiological and some chemical food safety issues. Emerging contaminants, environmental pollution and bad agricultural practice has increased the need for better analysis of our food. Also new production technology introduces undesired side effects and raises again the concern of the consumer. And although important steps have been taken, society cannot allow itself to distract its attention from this matter. New diagnostic methods allow detection at relevant low levels and also of hazardous compounds that previously could not be detected. A more detailed analysis, for example on subspecies of microorganisms, newly emerging pathogens and food born viruses using next generation sequencing, is fast becoming a standard procedure. New promising technologies, like nanotechnology and mild food processing technologies bring along uncertainties with respect to various safety issues. Although food fraud has never been away severe incidents in the past 10 years have put this topic very high on the agenda and still at a regular basis new incidents pop up. Wageningen UR has made enormous progress in the analytical work for detection of fraud. We also developed a food fraud vulnerability tool that is used worldwide en can be adapted to the specific Chinese situation. Both in Europe and in China consumers are seriously concerned by the appearance of food and feed that consist of genetically modified organisms (plants, animals, fish, microorganisms a.o.). Producers will have to guarantee the origin of their products and inspections will have to be able to identify admitted and non-admitted species. Nowadays, food safety is also about allergenicity and intolerance. There is a growing demand for foods that account for these hypersensitivities. Furthermore, food safety characteristics are also important when developing new packaging materials and techniques. These elements all pose an enormous challenge for the agrifood industry as well as for controlling governmental organizations. The Netherlands has a lot to offer in the food quality and safety domain. Wageningen UR and other organizations in the network of Food Valley NL have an extensive, world renown expertise available. One can think of measuring and detection of substances or pathogens, assurance of laboratory quality (collaborative studies and proficience tests), emergency responses, statutory tasks and food fraud expertise. Capacity building, specific training, consultancy and joint research projects with organizations and/or companies from Weifang can be performed. Food fraud As an example, we elaborate a little bit on the topic of food fraud. This concerns questions like:

• Are these organic eggs really organic?


• Is Tuscan olive oil really from Tuscany? And worse, has it been adulterated with other oil products which might pose also a safety risk?

These are examples of the type of authenticity and nutrient related questions which RIKILT, the Food Safety Institute from Wageningen UR deals with on a regular basis, already for more than 110 years. RIKILT inspects the authenticity of foodstuffs, animal feed and fertilizers and verifies the identity of these products. The following characteristics can be investigated: ● Compositional authenticity, for example the origin of fish species, N-replacements in milk, functional components in special honey, mineral fertilizers in manure ● Processing characteristics such as freezing history or water addition ● Geographical origins, whether a product is from a specific region ● Production methods e.g. organic eggs, sustainable palm oil, halal, durable ● Typical characteristics of artisanal products RIKILT is currently carrying out research on various portable instruments that can measure the composition of products within seconds – even through the packaging. These small instruments need only a few seconds to measure the composition of products and provide information about, for example, their freshness or composition. In order to obtain a more detailed picture of the challenges that the Weifang Food & Medicine Inspection Agency, the Agricultural Bureau and/or the Livestock Bureau, but also Weifang agrifood companies face, a fact finding mission from, among others, RIKILT and Wageningen Bioveterinary Research , should take place in Q1 (or Q2) 2017. A first project on for example ‘fast, efficient, accurate and cheap’ detection methods could start in Q3 or Q4 2017 (see paragraph 8.1). .


8 Budget and activity planning

Table 6 shows the proposed budget planning for the 5-year period. This is a framework to set up but concrete activities need to be elaborated that fit into these budget contours. This budget framework can support the plant and animal related innovation and training activities of the Centre. Table 6. Proposed budget planning 2017-2021(amounts in k€). Activity type 2017 2018 2019 2020 2021

Expo 350 150 150 150 200 Training 400 400 500 500 700 Co-innovation 800 1150 1050 1050 800 Organization 100 300 300 300 300 Furnishing and decoration

350 - - - -

Total 2000 2000 2000 2000 2000

This budget excludes a number of possible costs:

• Salaries of the General Manager and the Directors. • Cost of the building such as energy and rent or other capital investment related cost. • Company based investments in innovations to be used in the (new) operations of the

company. Such investments can have a demonstration function but have the required scale level for the company concerned. Material investments in co-innovation project or trainings activities are all included in the proposed budget planning.

All project related cost, including Chinese and Dutch labour cost and out-of-pocket costs are included like travelling cost, analyses of samples etc. Also, equipment needed for the project operations should be covered by this budget.

We suggest that 2017 will be used to implement a key project that in the same year is likely to result in a demonstration of a new technology. It is important to choose this project carefully as it must also link to innovation needs identified and it must be realised within one year time into a result that can be easily shown and be used from communication perspectives as the first success of the Sino-Dutch Agri-Food Innovation and Training Centre.

Co-innovation projects need the largest budget as these activities are the key success factor to the Centre. These projects will show close collaboration between Chinese and Dutch parties and will result in new technologies to be implemented.

Training and demonstration activities are important activities to transfer knowledge from the Dutch state-of-the-art expertise to Chinese companies and experts. A number of fields of expertise are mentioned in chapter 8 (such as food safety , logistics, pesticide reduction and soil quality improvement, but also breeding). These activities can also lead to new innovation needs to be

Figure 16. Innovation ahead.


addressed in the co-innovation activities of the Centre. This is an additional reason to keep flexibility in the Centre on the exact nature and objects of the activities to deploy.

A budget is needed to run the organization such as management, communication and financial control of the activities. A finance expert should be employed to support accountability of our activities and a communication officer is needed to manage the external relationships. Also, the management of the Centre should be taken care of. This management has the role to co-ordinate all activities and monitor and support the progress and solve issues that emerge during the process.

Additional funds could be raised on the Dutch side. Examples are: • The Dutch Horticulture and Agri & Food top sectors provide the opportunity to compete for

grants that public private partnerships involving Wageningen UR and Dutch companies could try to obtain. The Centre with its company’s network in Weifang could well be a valuable asset for applying for a grant. This can be expected at the earliest in 2018. The success of an application cannot be guaranteed. The benefit to Dutch companies should convincingly be demonstrated.

• The Dutch subsidy agency called RVO sometimes issues grants and call for proposals to the benefit of innovation of Dutch companies. This could offer possibilities in certain co-innovation projects if Dutch companies would be involved, for instance in Dutch companies that can find a Chinese market for their innovations.

• The European innovation program called Horizon2020, sometimes shows call-form-proposals requiring Dutch-Chinese co-operation. Obtained grants from these types of calls could be used to add to the above named budgets. The success rate of such calls are low, but the Centre could well proof to be a valuable asset in the grant process.

In the Table 9.1 possible funds coming from the three above described sources is not included. It is important to have flexibility when implementing activities. This means that the progress of activities should be monitored carefully and adjustments should be identified and implemented when need is shown. To this end, we propose that financial progress and progress on project implementation should be monitored on a quarterly basis based on information supplied by project and activity managers and discussed in the Centre’s Board. This team can decide on adjustments. Also, the Board together with the Director should have the opportunity to address emerging innovation needs expressed by Chinese agrifood companies. Thus, the Board of the Centre can meet its accountability obligations towards the Weifang government and manage the desired outcome and impact of the Centre.

8.1 Planning 2017

At this time, no decisions have yet been made about budget allocation to specific activities of the Centre. Although it is not possible to make very specific plans at this stage, it is important to give a first insight into what could be done in the first year to support the acceleration of the implementation of the Centre’s activities. This paragraph provides an understanding of what kind of results can be expected and shows how some activities may lead to concrete results in 2017. The activities are suggested to be chosen in a way that they will create support from the stakeholders. Final decision making on the exact activities to stake up in 2017 will off course follow the decisions of the Advisory Board and the General Manager of the Centre. In this section, suggestions are brought forward to support this decision making. Based on the visits of the project team with many stakeholders, a need for activity was identified in various areas, like training & demonstration, expo and co-innovation (research and development). Ideas are proposed to tackle those needs. The ideas result from the fact finding mission and will provide the decision makers a more concrete view on what kind of activities can be implemented.

8.1.1 Expo (promotion/communication)

It is advised to bring together Chinese and Dutch experts in Q1, 2017, in order to discuss and elaborate to a concrete level the vision of Food Valley China with respect to agrofood cluster development, the organization of a Food EXPO and the release of a Food Valley China Award


competition. This includes a budget need that can be brought forward to the Advisory Board and the General Manager for approval or modification. ● Agrofood cluster development: During the inception phase, the vision of Food Valley China on agrofood cluster development and enhancement of innovation, value creation and competitiveness, and the exact role of the SDAFITC, Food Valley NL and Wageningen University and Research with respect to cluster development in Weifang should be discussed and elaborated so that sound decision making is possible. Ideas and expectations are for instance the following: - cluster focus and profile - development of coherent cluster strategy / policies / action plans - cluster ‘infrastructure’ and management - partnerships with other regional / national / international clusters - cluster membership / key stakeholders / target audience - technology transfer - cluster services and consultancy - new business, start ups, development of entrepreneurship - triple helix, public private partnerships - communication and cluster branding - funding and finances, membership fees, investments - key performance indicators - cluster labeling This item list can be used as an agenda for the inception phase. ● Food EXPO The SDAFITC will play a central role in organizing events like Food Valley EXPO. Food Valley NL and Wageningen University and Research can have an advisory role in this. In order to organize a successful event in the end of 2017 or the beginning of 2018, ideas and expectations should be elaborated on, for instance:

- type of event: conference, summit, exhibition (with stands and/or pavilions) etc - focus / domain of the event (agriculture, horticulture, food, feed, equipment & machines, etc) - specific theme(s) during the event (for example food quality & safety, plant breeding, AgTech,

health ingredients , dairy, ...) - target audience : business people (retail, foodservice, manufacturers / processors / suppliers,

investors,...), farmers, scientists, governmental delegations, Chinese versus international attendees etc

- interesting speakers - duration of the event - activities during the event - expected number of visitors - finances: available budget , entrance fee, exhibiting costs etc - promotional activities

● Food Valley China Award In this document, the organization with respect to the Food Valley Award in the Netherlands is described. It should be discussed how such an Award competition can be customized for Weifang. Hence, a brainstorm session during the inception phase in which Food Valley China, Food Valley NL and Wageningen University and Research share their ideas on aspects such as procedures, communication, benefits for nominees and winner, award criteria and so on would be needed.

8.1.2 Training and demonstration

Training and demonstration are effective methods to transfer knowledge and extend the technology. This is also crucial to build a sustainable innovation capability of Food Valley China as well as the food cluster in Weifang or Shandong region.


We propose that SDAFITC could start in 2017 with two types of training programs: • Study tours to learn from the success experience from the Netherlands or Europe from the

perspective of the whole value chain. The targeted participants could be managers of relevant companies, industrial organizations and government officers. This will help potential innovators to assess the possibilities of potential co-innovation projects with industrial partners.

o Taking vegetable value chain as an example, the study tour program could include training program organised by WUR about the overview of the sector development, the key elements for technology improvement such as water and fertilizer management, integrated pest control, post-harvest technologies, supply chain and logistics management. Meanwhile, a visit to different stakeholders in the vegetable value chains could also give direct inspiration to the potential technology that could be introduced and be tailor made to China with the support of WUR and Dutch industry partners.

o Another topic could be dedicated to cold chain and logistic. Training program and visiting of related stakeholders in the cold chain will be combined.

• Technology training in Weifang using Dutch experts on specific topics that could be related to the co-innovation projects of SDAFITC. The participants for this will be more specialized, especially for the project participants and technology extension service people. These could be topics as mentioned below, but this is not a limiting list.

o New and advance technology for food safety inspection o Post-harvest technology for perishable products o Plant breeding technologies o Protected horticulture technologies o Soil quality improvement including salinization

Based on this, SDAFITC could plan to arrange a limited number of training activities in 2017 along the two lines described above.

8.1.3 Co-innovation

For the year 2017 we suggest to carry out at least a co-innovation project on logistics. This project can be used for demonstration of the progress made by the Centre. This project with high visibility status can attract companies to invest time and money to participate in and get involved with the Centre. Description of the logistic project Title : “Set up a cold supply chain for fresh cut vegetables to supermarkets in urban areas”. This project involves various aspects of the required development for the region: integral cold chain, packaging, processing and food safety. Proposed activities are:

• Find potential partners (e.g. Zhongkai cold chain and Beidahuang group for vegetables) • Identify potential markets (domestic urban areas and/or export) • Design logistic supply chain (what facilities are required and what added value is created

where in the supply chain) • Identify required technology, including investment costs (e.g. cold storage, packaging) • Determine feasibility of PMC5s and choose one (based on cost analysis of the designed supply

chain feasibility is evaluated) • Set up pilot project (including training) • Evaluation in context of logistic performance on cost, quality and food safety • Determine next steps to further implementation (e.g. certfication, upscaling, extend test

phase, share results, experience and knowledge with Food Valley to support platform) We like to stress the importance of economic feasibility, knowledge and skills next to state-of-the–art technology. They should go hand-in-hand and not be considered separately as this will increase the risk of co-innovation failure. This means that adequate training should be provided as part of the project. 5 Product-market-combination


Possible co-innovation project on Food Safety to start in 2017 In order to obtain a more detailed picture of the challenges that the Weifang Food & Medicine Inspection Agency, the Agricultural Bureau and/or the Livestock Bureau as well as Weifang agrofood companies face regarding food safety inspection, an inception mission from Wageningen UR experts of the institute of RIKILT, the Food Safety and Food Authenticity Institute of Wageningen University & Research, and Wageningen Bioveterinary Research, is proposed to take place in Q1 (or Q2) 2017. A first project on for example ‘risk analysis of specific food and/or feed chains’ or ‘fast, efficient, accurate and cheap’ detection methods could start in Q3 or Q4 2017 (or earlier if preferred). Goal of this inception mission in the beginning of 2017 will be to define and elaborate on priority areas for which joint research projects or capacity building activities could be developed in the course of 2017 and onwards. The feedback and prioritization from the Centre’s management is expected on topics like (but not limited to) chemical contamination (antibiotics, hormones, other veterinary drugs, pesticides, heavy metals, toxins, GMOs, dioxins / PCBs etc), microbial contamination (bacterial, viral, prions, fungi), and food fraud. It is needless to say that many more food safety related issues can be brought to the table. If needed, other organizations from the Netherlands, with expertise complementary to RIKILT and Wageningen Bioveterinary Research, could join projects from the Centre too. Elaborating co-innovation projects In chapter 7, a number of fields of expertise were described on which training and also co-innovation projects could be implemented. Before decision making on co-innovation projects can be made, it is important to elaborate them to a more specific level matching the local needs and requirements. Decision making on what co-innovation projects to elaborate in 2017, will be upon mutual discussion of the Centre’s partners. Elaboration of co-innovation projects (see chapter 7 and including the key-project on cold chains) need to follow an inception mission of Dutch experts together with relevant Chinese companies and organisation in Q1 2017. This inception phase will require a close and intensive co-operation during 2-3 days at the end of which detailed project proposals together with budget need are presented to the management of the Centre. As mentioned before, the management of the Centre will use this to decide on the launch of projects. This activity will require an adequate budget. Including the livestock value chain in the Centre Based on ongoing Dutch-Chinese co-operation activities in the field of livestock production and processing, the identification priorities in this field can directly follow from these activities. It is suggested to extract a number of priority training and co-innovation topics and include them in the aforementioned elaboration phase. This will allow us to employ both plant and animal related activities in the Centre starting in 2017. To conclude on activities 2017:

• A number of training activities both Chinese experts visiting The Netherlands and Dutch experts providing training on location in Weifang.

• An inception mission on food safety and inspection in Q1 2017 • An inception mission on elaboration of co-innovation project including the key project on cold

chains in Q1 2017 Subsequently, following decision making by the centre’s Management and the Advisory Board on results of the inception missions: start of training and co-innovation activities starting from Q2 2017.


Annex 1 Literature

1. Jinan, N., Sectorschets Tuinbouw provincie Shandong NBSO 2015. 2015: p. 24. 2. Ltd, O.R.a.A.A.C., China pork and broiler value chains. 2015: p. 103. 3. presentation on Food Summit, November 4, 2016; LOSCAM 4. An overview of China's fruit & vegetables industry, summer 2008,p.19, Murat Dede, Embassy of the

Kingdom of the Netherlands, Dept. of Agriculture, Nature and Food Quality 5. Weifang logistic report 6. presentation on Food Summit, November 4, 2016; Liu Jing, Secretary-General of Chinese Cold

Chain logistics League 7. SV in cijfers 2016, RAI vereniging, feiten & Cijfers


Annex 2 Short summary of visits

visitnr organisation 1 Shandong Huisannong

2 Weifang Agriculture Academy of Science

3 Jingqing Technology, Hua Long Agricultural equipment, Jiajiafu- grower and Shangdong Huasheng Agriculture Co.

4 Shandong Province Food Industry Association

5 Institute of Agro-Food Science & Technology, Shandong Academy of Agricultural Sciences

6 Weifang Food & Medicine Inspection Agency

7 Zhongguancun Green Cold Chain Logistics Industry Alliance

8 Zhongkai cold chain / Beidahuang

9 Weibai Group / Zhongbai Grand Kitchen

10 Sino Israel Agricultural Technology Co.

11 Orgalive

12 Baileyuan packaging

13 Weifang Agricultural Bureau

14 Shangdong Baili Seedling / Rijk Zwaan

Company Shandong Huisannong

Role in the value chain Service provider to farmers

- Description - This is a laboratory that does analyses on plants and soil samples. - Together with the analysis they give advice. - The organisation trains farmers and co-operatives both with

training programs at their location (social resp9nsibility, marketing, food safety) and with training programs in the field (cultivation technology).

- Farmers can get a certificate when trained and this certificate gives then access to other services including loans.

- The trainers of the organisation are themselves trained by research institutes.

- Innovation need - The main challenges they see are: o Soil quality (acidity, salinization, structure) o Pesticide reduction o They consider post-harvest training to be of increasing

interest.

Organisation Weifang Agriculture Academy of Science

Role in the value chain Science partner

- Description - This institute does research on several aspects of crop cultivation and breeds new varieties in different crops.

- Demands for research are collected through their demo events, through extension and questionnaires

- Until recently, this organisation did the marketing of the new varieties itself but following regulations, they now organise biddings on their new varieties.

- Next to research, this organisation is also involved in training of farmers: demonstration, workshops, in field guidance, training, demo fields.

- They also have a diagnostic service for farmers.


- Research that they have done has shown that rotation of crops results in higher yields.

- Innovation need The Academy wishes to work together with Wageningen UR on the next items:

- Disease control - Asparagus cultivation - Breeding

Companies Jingqing Technology, Hua Long Agricultural equipment, Jiajiafu-

grower and Shangdong Huasheng Agriculture Co

Role in the value chain Jingqing Technology acts as a grower and service provider (bio-fertiizers) to farmers

Hua Long Agricultural Equipment is a service provider to farmers based on machinery.

Jiajiafu is a grower of vegetables that produces for a retailer.

Shangdong Huasheng Agriculture Co is a breeder on vegetables,

- Description The discussion with these companies was organised simultaneously, explain why these companies are treated in one short summary of the discussion:

− Jingqing Technology does the testing of their products with a local knowledge institute and also develops new functional organisms together with their science partner.

− They produce the micro-organisms themselves with several fermenter tanks.

− The Jiajiafu vegetable grower had several traditional greenhouses and a series of other plastic tunnels.

− The grower produced the seedlings herself. − The grower supplied its produce to METRO and this retailer trains

the employees of the grower. − When the grower is short of produce, she buys produce from other

farmers that meet the same criteria as are required from METRO. − The HUA Long Agricultural equipment company develops all kinds

of machinery for vegetable and arable growers such as machines for transplanting, soil cultivation and harvesting.

− The machines were mostly one or two rows wide. For bigger machines the market is too small because of the many small fields.

− On GPS and robotics, the company has not started development yet, but they do see a future for this technology.

− The company work together with institutes to develop standards for machinery design and development. This is also an item that they would like to work on with Wageningen University & Research.

− According to pictures the factory showed, improvement seems to be possible in stabilisation of the spraying booms. This could increase pesticide efficacy.

- Innovation need - Soil quality: acidification, salinization and lower yield following the absence of rotation.

- Better climate control systems in traditional greenhouses. - Breeding on disease resistance.

Organisation Shandong Province Food Industry Association

Role in the value chain Government guided , administrative organisation - Description - Currently: budget from government and membership fees

- Every 5 years a new Strategic Plan, involving technology, innovation, branding, training, finance etc - Guidelines, standards etc are a main topic Activities and members in 3 domains: * Agriculture: Crop / Animal Processing (for Oil, Flour etc) * Food processing / production (10 different categories like for instance


functional ingredients / foods) * Drinks : all types (alcoholic, non-alcoholic, juices, soft drinks etc)

- Innovation need Open for collaboration on Food Security, Resource Integration (usage), Reduction of Food Waste, Upgrade of Products (Added Value), Environmental Friendly

Organisation Institute of Agro-Food Science & Technology, Shandong Academy of

Agricultural Sciences Role in the value chain Science partner

- Description - Projects on: o Food and Vegetable processing; ingredients , mushroom o (Re)use of waste materials (for example: onion)

- Services: o Website with questions and answers on certain topics

- International collaboration with, among others: o Canada, Japan, Finland, South Korea

- Budget: o From government and industry (+/- 30%)

- - Innovation need Looking for co-operation:

- Further development of food processing opportunities / technologies in Shandong

- R & D on Pre-harvest conditions in relation to future processing - Collaborations with universities and institutes for research related

to local conditions / circumstances - Attracting talented people - Sustainability important topic

Organisation Weifang Food & Medicine Inspection Agency

Role in the value chain Inspection of processed food products (plant / animal origin).

- Description - Testing of processed food products / downsteam control - Testing at various levels (city level, national level, import/export) - The Weifang Food & Medicine Inspection Agency collaborates /

aligns with: the Agricultural Bureau (plant) and the Livestock Bureau (animal) who are active in the primary sector.

- Innovation need - Fast, efficient, accurate and cheap tests / detection methods , especially for unknown & emerging substances / risks

- Detection methods for Food Fraud Company Huayi Agricultural Science and Technology Company

Role in the value chain Producer

- Description - With support from Israel (Growponics), this company has constructed a greenhouse with soilless hydroponic culture of tomatoes, cucumber, lettuce and other crops.

- The cultivation is certified organic. - The produce is old to supermarkets and community stores. - The produce is transported in cold trucks to uphold te quality and

support food safety. - Pests and diseases are controlled with biological products and

mineral oils. - Diseases occurring in the hydroponic system are controlled by

disinfection systems installed. - Employees working in the greenhouse are trained by Israeli

trainers and day-to-day consulting is included. - Innovation need - No special innovation need mentioned.


Organisation Agricultural Bureau of Weifang

Role in the value chain Policy support

- Description - The Weifang region has 3.9 million mu of vegetable production. - Cash crops in open field are tea, cotton and peanut. - Seedling production is big in Weifang. Around 70% of the

Shandong need for seedlings is met by Weifang production. In total 1,7 billion seedlings are produced yearly.

- Co-operation with the Dutch vegetable seed sector is much appreciated.

- Overall standardization of vegetable production in Weifang area is low. More production on substrates and soilless culture is needed.

- Salinization of the soil is an increasing problem in Weifang. - Lack of rotation is because farmers are not used to grow other

crops. Maybe demonstration farms could be set up to show it is possible and profitable.

- Tailor-made training on specific topics would be better than the current, more general trainings.

- Innovation need - Training on plant breeding - Control and management of Fusarium in wheat. - Support for an increasing root rot in wheat. - Training and demonstration of best practices in food safe

production. - Branding of Weifang produce. - Solve increasing soil problems in Weifang area.

Organisation Shangdong Baili Seedling

Role in the value chain Seedling producer of vegetables

- Description - The company is an exclusive dealer for Rijk Zwaan varieties. - Quality and price of the seedlings are good, therefore farmers buy

seedlings rather than seeds. - Main crops to produce seedlings from are pepper, bell pepper,

spicy pepper, hot pepper, eggplant, cucumber, tomato. - Most seedlings go to small farmers. Only a limited number of sold

to large farmers. These large farmers sometimes raise their own seedlings but are not very successful in doing so.

- Innovation need - No special innovation need. They are depending on Rijk Zwaan’s varieties and give this company feed-back on the fields of improvement.

Organisation Vegetable Farmer’s Home

Role in the value chain Co-operative

- Description - The goal of the organization is to standardize all the farmers and their cultivation methods to increase quality and food safety.

- The organization services 2,000 farmers. - Services are training (20,000 so far), fertilizer supply, soil testing

etc. - They supply bio-fertilizers to the farmers to increase soil quality. - Every cultivation season the soil of farmers is tested on N, P, K,

organic matter, Cl, Ca, Fe, Mg. - Farmers can control the temperature in the greenhouse with their

smart phone. - Farmers are allowed to sell their produce wherever they want.

They do not need to use the market channels that are used by Farmer’s Home.

- 30% of the farmers uses drip irrigation to supply water and fertilizers to the crops.

- Farmer’s Home has its own shelves in super markets to sell the produce under the brand name of Farmer’s Home.

- The produce is collected and brought to the packing place in the wholesale market. They have dedicated people do the sorting there.

- Innovation need - Support in training. - Support in greenhouse technology.


Company Zhongguancun Green Cold Chain Logistics Industry Alliance

Role in the value chain Organisation of companies that wants to set standards for the industry

- Description - Nationwide organisation with 4000 members - 5 groups: wholesale, processing, cold chain, retail and equipment - Goal: set standards for the industry - Vegetable cold chain should include precooling, cold storage and

cooling at wholesaler, but this is very rare - Reason is the cost. The price of vegetables is so low that cold chain

rarely exist. Related equipment is also expensive - Another reason is that vegetables are easily spoiled during truck

transport, and the truck driver/company is responsible. They don’t want to take the risk.

- Normally you can get a load insurance, but this is not the case for vegetables

- Cold chain is available in city distribution for transport of dairy, meat, fish, ice cream and other frozen material

- Innovation need - Add value in the supply chain - implement standards in logistic carriers, packaging and IT

Company Zhongkai cold chain / Beidahuang group

Role in the value chain Zhongkai serves as a logistic hub and provides cold storage services. They want to become a 3PL for the region. Beidahuang is a large producer of agro-products in Harbin, the largest in China for vegetables.

- Description - The company serves as a logistic hub. Depending on the season they source from the North (summer) or from the South (winter). But always from the Shandong province and in particular Weifang county. East of Shandong is rich of agro-products.

- The reason the company is situated in Weifang is because of the connectivity, efficient logistic transfer and the low logistic cost

- They have a 2-step strategy: 1) attract network of traditional wholesale market and 2) try to build a technology driven network for transport themselves (i.e. cold chain)

- Currently their flows are a mix of push and pull. Sometimes traders ask them to order something from another region, because they have the network and the facilities.

- In most cases the flow is from the wholesale market to the cold storage to the distributor; so they deliver to companies that serve the outlets

- However they want to develop into a 3PL in a cluster of related companies and distribute directly to the (retail) outlets. That is also part of the second stage in the strategy

- Poultry and fish are in a cold chain, whereas fruit, vegetables and most of the processed food is not.

- The agro-chain in many cases is so long that nobody makes money. The logistic costs are just too high. This inefficiency is one of the major problems.

- The company only provides logistic service, and no quality control - The Beidahuang group produces 450 million ton of agro-products

per year. Their main crops are: rice maize and soybean. The top 5 vegetables are potatoes, Chinese cabbage, tomatoes, cabbage and beans

- The soil is very good in Harbin and the produce is of high quality. Nevertheless they don’t get a good price.

- Innovation need - At the moment Beidahuang together with Zhongkai want traceability and a closed cold chain.

- Looking for added value cold chains in vegetables - They are in cooperation with the US to use the FDA inspection

system (traceability). Next year it should be implemented and the concept will roll out in 100 other Chinese cities

- They also consider the option of speed-frozen vegetables. They have the processing technology and the cost price is not much higher, whereas the convenience (of keepability, hence flexibility) is higher.


Organisation Weibai Group / Zhongbai Grand Kitchen

Role in the value chain They have their own department stores (600) and in fact they control the whole postharvest part of the supply chain until the consumer. They also do some meat processing. In addition they supply other supermarkets and convenience stores. Recently they also serve smaller supermarkets, canteens and are in E-commerce business

- Description - The Weibai Department Store Group is a large company with annual turnover of 16 billion RMB

- They own 2 distribution centres of which one is one fresh produce - When they purchase food they have an inspection and a list of

criteria. On this list are food safety, taste and reasonable costs. They apply HACCP, ISO and GlobalGAP for farmers.

- They have their own trucks although a limited number; most purchased products are transported by 3PL

- Meat and fish has a cold chain, the rest not but one: the cauliflower is transported in an environment with ice.

- Lead time in the area is 2-3 hours and 1 day otherwise - Biggest challenge is food safety; they check farmers on a regular

basis, nevertheless the quality of the supply is unstable which comes out with a fast-test on quality at the DC. This holds for fruits and vegetables and not for frozen products.

- Their losses are small, about 1%. - Innovation need - Realize a supply of constant good quality and safety in fruits and

vegetables Organisation Orgalive

Role in the value chain E-commerce company for food

- Description - This is an E-commerce company with 4000 registered members, mostly families, but also some banks; in Weifang 2000 members

- They started in Weifang and now they have 4 places in Shandong - They used to be IT-company - In 2012 they start to produce in this area, which is 1 out of 37 eco-

zones in China; this is the only one in the province Shandong - 650 mu land for vegetables, 5000 chickens (150 mu), also millet

production somewhere else in Weifang; in Heilongjang 200 mu of rice production

- In 2014 they received the national organic certificate - In 2015 they received some vegetable certificate from US so they

can export to US - Main sales channel are members: 70%; 30% goes to companies,

retailers. In the winter they can deliver easily because of absence of organic in te market

- Members can choose between a membership of 50 or 100 times order per year. They can be delivered 2 times a week and they can choose from 4 days in a week

- Normally: order today is delivery tomorrow before 12h - At the moment they produce more food than needed - Transport is outsourced to post/express company DHL. Delivery is

at home. The scale is too low to set up pick up points, but this will be done when the scale is OK. Also lot of problems with DHL service.

- In the summer it is sometimes difficult to keep the temperature below 25˚C

- They sell boxes with food components to make a meal: e.g. rice, eg and vegetables

- Membership for 100 times delivery is 15600 RMB/year, so 156per delivery; but they give 50% discount to members. Hence they get 78 RMB and logistic costs are 15/78≈ 19%.

- Note that eco≠ organic, since organic should be produced in soil - Innovation need - Quality of the products is unstable – labour cost is high (only some

aging females work now) – logistic challenge: data mining E-commerce platform: how can they attract more business based on


insight of the consumer behaviour - Labour activities are: breeding, harvesting, removing leaves,

packaging - They have so many products and corresponding packaging variety

and want automation to save cost. - Since there are many different kinds of labour it is not easy to go

to automation Organisation Baileyuan packaging

Role in the value chain Supplier of packaging for agricultural products

- Description - They are FDA registered - They have consumer as well as trade packaging - Introduced packaging in more than 10 countries - Packaging is patented - Packaging is well-suited for E-commerce - Packaging characteristics: absorb CO2, ethylene and NH3 - Blue bag is for seafood, green for fruit and vegetables; for bread

they have another special bag; if you put 1/3 water and goldfish in a special blue bag it can live for 1 month; this bag for fish is on the market

- No gas is added in the packaging - Characteristics of packaging - Absorb gas - Disclose anion (prevents moisture) - Freshens the water (if you put ‘old’ water in the bag, the water will

become fresher) - The packaging creates micro-environment: gas can go out, water

stays in but goes back into the product because of release of anions

- Transport from highlands to Beijing of papaya takes 3-5 days and ethylene accumulates, but if you harvest them 15% mature you can extend the shelf life to twice as long. Papaya is expensive, is sold by piece.

- Success story: tomato export to Canada. After 15 days it arrives in Canada. Although the temperature is not optimised the tomato will stay ok in the package

- Success story: organic leak is a good price product but waste is high. Packaging reduced the wase very much and even far away markets can be served with very good price

- Some product (date like) had extended quality from 3 to 8 months in cold storage.

- Innovation need - No needs; they could be included in projects to reduce losses.

The mission of Wageningen University and Research is “To explore the potential of

nature to improve the quality of life”. Under the banner Wageningen University &

Research, Wageningen University and the specialised research institutes of the

Wageningen Research Foundation have joined forces in contributing to finding

solutions to important questions in the domain of healthy food and living

environment. With its roughly 30 branches, 5,000 employees and 10,000 students,

Wageningen University & Research is one of the leading organisations in its

domain. The unique Wageningen approach lies in its integrated approach to issues

and the collaboration between different disciplines.

Corresponding address for this

report:

P.O. Box 430

8200 AK Lelystad

The Netherlands

T +31 (0)320 29 11 11

www.wur.nl/plant-research

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