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C H I N A ON
AGRICULTURAL MARKETING (Some Lessons to Learn)
Presentation toNational Council of State Agricultural
Boards (COSAMB) at Mount Abu, Rajasthan on 30th August, 2012
BYDR. J.S. YADAV
Chief Operating Officer
Premium Farm Fresh Produce LimitedLGF, World Trade, Centre, Barakhamba Lane, New Delhi –110001
Phone: 11-44447896 ; e-mail: [email protected]
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CONTENT
BACKGROUND - 1
Development History of China’s Agricultural Products Wholesale Markets
BACKGROUND - 2
Essential Turning Point of China’s Agricultural Products Wholesale Markets (3RD Generation Reforms 2010 onwards)
BACKGROUND – 3
Distinct Difference Between India & China
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BACKGROUND – 4
HIGHGREEN– The Most Modern Market–A Result of Third Generation Reforms
1.Platform of Production and Marketing (case-1)
2.Platform of Production and Marketing (case-2)
3.HiGREEN– Efficient and Environmental friendly Hardware Facilities (case-3)
4.HiGREEN– Efficient and Environmental-friendly –Recycling and Green Energy (case-4)
5.HiGREEN– Wise Information System (case-5
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6. HiGREEN–Logistics Network System (Case-6)
7. HiGREEN–Management Services of All the- way- Supply Chain -Production and Retail Terminals(case-7)
8. Management Services of All-the-way Supply Chain-Electronic Business model and Payment settlement solutions(case-8)
9.HiGREEN-Traceable Food Safety System (Case 9)
10.HiGREEN-An Independent Third Party Testing Center (case-10)
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FIRST GENERATION OF AGRICULTURAL PRODUCTS WHOLESALE MARKETS
Background
• The county allowed the purchases and sales on negotiations well as free purchase and sales of some farm products.
• Land collectives system: fix farm output quotas for each household
• Low level circulation organization
• Not well organized of products distribution• In the late 1980s, the inflation was serious.• In 1988, the ministry of agriculture proposed the “Food basket" project.• Mass market and intensive use of land•The level of circulation organization was increasing continuously
Market Features
• Formed marketing groups among people, especially farmers.
• Most of the sellers were farmers and self-employed individuals
• Developed by group or villages
• Supply store or professional company
First Generation ofAgricultural ProductsWholesale Markets(Upto the Reform andOpening Up in 1991)
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Advantages
• Circulation of goods in each place
• Models of farm produce market begin
• Farmer distributors appeared
Advantages
Disadvantages
• Problems of large scale production and small circulation
• Prices were not clear and extortion appear.
• No orderly management in the market.
FIRST GENERATION OF AGRICULTURAL PRODUCTS WHOLESALE MARKETS
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• Promoted by county
• Floor space increases
• A large number of wholesalers and distributors- appeare
Market Features
Advantages
• Corporate organization gradually becomes the subject of management
• Farm product wholesale market becomes the major channel for farm product circulation
• The large-scale wholesale markets has improved function and complete supporting facilities
SECOND GENERATION OF AGRICULTURAL PRODUCTS
WHOLESALE MARKETS
Second Generation ofAgricultural ProductsWholesale Markets(1991-2010)Until 2010, the marketnumber has been4150.
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• Requirements of customers about food safety could not be satisfied by some wholesale markets
• Information asymmetry weakened the functions of wholesale markets
• Pell-mell development and disorderly competition
• Poor circulation means and low circulation efficiency increased the product circulation cost.
• The traditional markets could not satisfy requirements of new circulation patterns such as E-commerce
• Serious inflation made the public responsible that too much circulation drives prices to rise.
Disadvantages
SECOND GENERATION OF AGRICULTURAL PRODUCTS WHOLESALE MARKETS
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ISSUES THROWNUP DURING SECOND GENERATION (1991-2010)
__________________________
• Food Safety: Our Great Responsibility• Multi-ways-Fight for Price• How to protect “Vegetable Basket” ?• Why the Circulation of Farm Products Cannot
Go Smoothly?• Henan Cabbage Comes into Beijing-Longistics
Costs is the big Problem• Needs to Promote Farm Products (Quality)• Farm Products Logistics Needs to be Solved
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TURNING POINT OF CHINA’S AGRICULTURAL PRODUCT MARKETS
Prime minister of the State Council, Wen Jaibao, held the standing conference on 8th October, 2010 to deploy the establishment of circulation system of fresh farm products.
The Council clarified the immediate essential tasks:
1. Improve the organization and modernized level of agricultural products distribution
2. Promote the jointing of production and marketing to reduce circulation and cost.
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BACKGROUND-3
Distinct Difference Between India & China– Where we stand ?
1000 Crores USD China India
1. No. of Private Wholesale Markets 400 -2. Joint Venture with MNGs 20 -3. Investment in Pvt. Wholesale Markets USD
800 cr-
4. Reforms taken place in year 1991 2004
5. Whether Commodities are regulated No Yes 6. On an average No. of goods &
Commodity traded in a Private market2000 100
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BACKGROUND-3
District Difference Between India & Chian – Where we stand
1000 Crores USD China India
7. Average area of Pvt market 50 Ac NA
8. Percentage of Land use earmarked for market, nonmarket services
Free 15-20 (Non market
services)
9. Notification & Demarcation of Market Area
Free Notified
10. National Regulatory Authority Yes No
11. Level Playing Field Yes No
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Background 4
‘HiGREEN- The Most Modern market of China
Shenzhen Agricultural Products Company Limited (SZAP) positively responded the national policy and promoted HiGREEN Market for operations and social responsibility in ONE year only.
Established efficient, convenient, safe and orderly distribution system of fresh farm products in one year (construction & development in 12 months (November, 2010-October, 2011)
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THIRD GENERATION PRODUCT WHOLESALE MARKET – OPERATIONAL ON GROUND
Shenzhen HiGREEN Agricultural Product Logistics Park - Promoting HiGREEN
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“HiGREEN”- FUTURE STANDARDS SET
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HiGREEN – Platform of Production and Marketing (Case
1) From production to marketing, it will provide the multilevel and mutimode trading platfrom, which can truly connect the field and dining table.
Multilevels
B2B
B2C
C2C
Multimodes
Trading
Through
Auction and matching
Field Dinning Table
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HiGREEN – Platform of Production and Marketing (Case 2)
Retail Vans at fair prices in Shenzhen: 300 moveable retail cards, which covers 900 communities in Shenzhen
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HiGREEN – Efficient and environmental-friendly Hardware Facilities (Case 3)
Convenient and efficient hardware facilities and logistics management could not only reduce energy consumption, but reduce the secondary pollution of food.
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HiGREEN – Efficient and environmental-friendly Hardware Facilities (Case 4)
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HiGREEN – Wise Information System (Case 5)
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HiGREEN – Wise Logistics Network System (Case 6)
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HiGREEN – Management Services of All – the-way Supply Chain (Case 7)
Perfect management services of supply chain makes all the services completed
Value-added
Services
Platform
Publish production information & producing area Quality Control
Transportation Accounting Sorting and Package Inventory Management Financing Guarantee Services
Retail
Terminal
Production
Terminal
Front-end Services
Individual Services
Consultant Services
Outsourcing Services
Whole Services
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HiGREEN – Management Services of All-the-way Supply Chain (Case 8)
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HiGREEN - Traceable Food Safety System (Case 9)
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HiGREEN- An independent third party testing center(Case 10)
The third party testing center makes subsidiary agricultural productsDistributed from HiGREEN market safer and reliable.
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INSTATANT PESTICIDES RESIDUE TESTING MECHANIE
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GPS CONTROLLED MOVEMENT OF VEHICLES
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AUTOMATIC PAYMENT RECEIPT FOR FARMERS
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ELECTRONIC WEIGHING AND PAYMENT SETTLEMENT MECHANIE
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MOBIEL BIDDING EQUIPMENT
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AUTOMATIC MONEY TRANFER MECHINES PLACED IN MARKETS
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A VIEW OF MARKET FROM TOP FLOOR
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Thanks!