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China's Food Economy Benefits Small, Poor Farmers

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09.01.2009

One of the most significant changes in China’s agricultural economy over the past fifteen years has been the rise of horticulture. During this same time period, modern supply chains have also emerged.

A new study in the Review of Agricultural Economics reveals that the recent changes in China ’s food economy have contributed to an improvement in poverty reduction and betterment of small farmers. However, there exists a great challenge to ensure delivery of a safe product.

Jikun Huang, Yunhua Wu, Huayong Zhi, and Scott Rozelle used a dataset that they collected themselves in 2007 of a representative sample of fruit farmers in Shandong province to describe the emergence of the production and marketing structures. The researchers explored who is entering the different types of market channels and whether these channels guarantee food safety.

Results show that small and poor farms are able to sell into traditional marketing channels. There is no evidence that poor households are getting less access to horticultural markets. To the extent that modern chains have penetrated into rural China, there exist no distinguishable differences in terms of size or wealth level.

However, ensuring the safety of China ’s apples and grapes is a challenging task. According to their survey, there are almost no contractual relationships between buyers and producers. Almost all transaction are in cash and done on a spot-market basis. Because of this, it would be difficult for any shipment of fresh or processed fruit that originated from the farms to be tracked back to the farm. After selling their output into the market, farmers in China ’s horticulture economy are free from all accountability.

“ China ’s challenge is great,” the authors conclude. “On the one hand, it wants to keep its market accessible to small, poor farmers. However, when a market is dominated by traders in traditional marketing channels, there is a big challenge in meeting the growing demand for food safety.” Recent events inside China have shown that indeed this is an area that requires policy action. In the past several months China ’s government has begun to focus its efforts on building the institutions that are needed to modernize the food system from farm to consumer.

This study is published in the Review of Agricultural Economics. Media wishing to receive a PDF of this article may contact journalnews@bos.blackwellpublishing.net.

Scott Rozelle is affiliated with Stanford University and can be reached for questions at rozelle@stanford.edu.

The Review of Agricultural Economics is published jointly by the Agricultural & Applied Economics Association, the Northeastern Agricultural and Resource Economics Association, Southern Agricultural Economics Association, and the Western Agricultural Economics Association. The purpose of the Review is to provide a scholarly journal for research findings on real world issues relevant to various areas of agricultural, food, and natural resource economics, broadly defined. Published articles are expected to be of interest to applied economists working in the public, private, and nonprofit sectors, both domestically and internationally.

Amy Molnar | Source: EurekAlert!
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