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C H I N A ON AGRICULTURAL MARKETING (Some Lessons to Learn) Presentation to National Council of State Agricultural Boards (COSAMB) at Mount Abu, Rajasthan on 30 th August, 2012. BY DR. J.S. YADAV Chief Operating Officer Premium Farm Fresh Produce Limited
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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 BY DR. J.S. YADAV Chief Operating Officer Premium Farm Fresh Produce Limited LGF, World Trade, Centre, Barakhamba Lane, New Delhi –110001 Phone: 11-44447896 ; e-mail: jsyadav@rediffmail.com
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
BACKGROUND – 4 • HIGHGREEN– The Most Modern Market–A Result of Third Generation Reforms • Platform of Production and Marketing (case-1) • Platform of Production and Marketing (case-2) • HiGREEN– Efficient and Environmental friendly Hardware Facilities (case-3) • HiGREEN– Efficient and Environmental-friendly –Recycling and Green Energy (case-4) • HiGREEN– Wise Information System (case-5
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) • HiGREEN-Traceable Food Safety System (Case 9) • HiGREEN-An Independent Third Party Testing Center (case-10)
FIRST GENERATION OF AGRICULTURAL PRODUCTS WHOLESALE MARKETS • 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 Background First Generation of Agricultural Products Wholesale Markets (Upto the Reform and Opening Up in 1991) • 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 Market Features
FIRST GENERATION OF AGRICULTURAL PRODUCTS WHOLESALE MARKETS • Circulation of goods in each place • Models of farm produce market begin • Farmer distributors appeared Advantages Advantages • Problems of large scale production and small circulation • Prices were not clear and extortion appear. • No orderly management in the market. Disadvantages
SECOND GENERATION OF AGRICULTURAL PRODUCTS WHOLESALE MARKETS Second Generation of Agricultural Products Wholesale Markets (1991-2010) Until 2010, the market number has been 4150. • Promoted by county • Floor space increases • A large number of wholesalers and distributors- appeare Market Features • 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 Advantages
SECOND GENERATION OF AGRICULTURAL PRODUCTS WHOLESALE MARKETS • 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
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
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.
BACKGROUND-3 Distinct Difference Between India & China– Where we stand ?
BACKGROUND-3 District Difference Between India & Chian – Where we stand
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)
THIRD GENERATION PRODUCT WHOLESALE MARKET – OPERATIONAL ON GROUND Shenzhen HiGREEN Agricultural Product Logistics Park - Promoting HiGREEN
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
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
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.
HiGREEN – Efficient and environmental-friendly Hardware Facilities (Case 4)
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 Production Terminal Retail Terminal Front-end Services Individual Services Consultant Services Outsourcing Services Whole Services
HiGREEN – Management Services of All-the-way Supply Chain (Case 8)
HiGREEN- An independent third party testing center(Case 10)The third party testing center makes subsidiary agricultural productsDistributed from HiGREEN market safer and reliable.