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Brand is the new way for China's agricultural dream

2015-02-26

By Xinhua writer Zhang Zhongkai

BEIJING, Feb. 7 (Xinhua) -- High quality, modern production and food safety are China's top agricultural development priorities this year and achieving them could be as simple as creating a brand, according to some agribusiness giants.

"Agribusiness players should be pioneers in advancing agricultural modernization. You can't just rely on the old tricks of expanding production. Only with a brand can modern agriculture go further," Yu Xubo, president with China's largest food company, COFCO Corporation, told Xinhua in an interview.

However, a brand is not as easy to nurture as crops. Forced to weather headwinds such as food safety concerns, resource shortages and difficulties with promotion, agriculture brands are facing their biggest challenges to date.

GO WHOLE INDUSTRIAL CHAIN

Chinese food brands have struggled with safety concern since a tainted milk scandal damaged consumer confidence in domestic food products in 2008. The scandal highlighted problems at all links in the production chain, from raw material to processing.

To enhance quality and safety supervision, COFCO set up a mechanism to keep an eye on the whole process of food production, from the field to the dining table.

"All agribusiness players, big or small, should be held to top accountability for food safety and introduce a whole industrial chain to keep close scrutiny throughout the process," Yu said.

Another bonus of the whole industrial chain is rising enthusiasm and income for farmers.

"You can't just rely on price rises to increase farmers' income, what we are doing is to include farmers into part of the whole industrial chain by offering them packaged services from seeding, training and financing," said Yu.

"You have to let them feel like a strategic partner with the company, not just farmers."

GO OVERSEAS

China released its 2015 rural policy, or the "number one document" last weekend, highlighting modernizing agriculture and food safety as key priorities this year.

It highlighted the challenges facing China's agricultural sector, including surging production cost, shortage of agricultural resources, excessive exploitation and worsening pollution. It also encouraged agricultural enterprises to go international to tap global supply and demand.

COFCO acquired Dutch trader Nidera and Hong Kong-based Noble Agri last year, giving the country direct access to South American grain and oilseed supplies.

Private players also step up overseas ventures. The New Hope Group, China's largest private agricultural business, has opened more than 40 plants across 20 countries, with an expected annual growth of about ten new overseas branches each year.

"Supportive initiatives such as the one belt and one road will provide more opportunities for agribusiness overseas expansion," said Liu Yonghao, board chairman of the New Hope Group.

GO ONLINE

As mobile internet sparks business model reforms in nearly all sectors, entrepreneurs believe agriculture should also ride the powerful wave by integrating online and offline resources.

COFCO set up e-commerce platform WOMAI.COM to link production regions directly with customers, saving logistics costs and promoting local brands.

The New Hope Group helped establish a pasture in southwestern China's Yunnan Province online by selling milk directly to customers through internet orders and express delivery.

Yunnan Province now is home to many Internet-savvy agricultural start-ups and has nurtured a unique economy based around large plantations, with agribusiness brands featuring high-quality produce and online-to-offline interactive services.

Liu is reported to have invested millions of dollars to build a more internet-connected agribusiness over the next three to five years, including a mobile internet platform to finance cash-starved farmers and offer farming training and consultation.

"With the powerful engine of the Internet, pigs can 'fly', cows can 'fly' and farmers can also be high-fliers," said Liu.

Editor: Yamei Wang

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