[ASC-media] Media release: China's supermarket revolution

JCA Media jca.media at starclass.com.au
Tue Aug 15 02:17:06 CEST 2006

International Association of Agricultural Economists 26th Conference
Gold Coast Convention Centre, Qld, Australia
August 12-18, 2006	   ph 07 5504 4057


Tuesday August 15, 2006							IAAE 17


The supermarket revolution has come to China and is spreading as fast as anywhere in the world - but traditional Chinese small farmers and traders are still flourishing.

Professor Scott Rozelle of Stanford University addressed the International Association of Agricultural Economics conference on Australia's Gold Coast. 
"In most parts of the world where supermarkets have appeared, there has been considerable disruption of the production and distribution networks," says Professor Rozelle. "But in China, small and poor farmers are able to participate in the modern system and even increase their share of the total market."

Supermarkets have captured more than a third of the urban food market in China's largest cities, says Professor Rozelle who has studied food production and distribution in the Greater Beijing area with a team of US and Chinese researchers.

"Farmers have adjusted some of their production from grain to fruit and nuts, to meet the demand of increasingly affluent urban consumers," he says.

"What has - surprisingly - remained the same is the traditional means of getting the produce to market."

Global supermarket chains have normally imposed their own distribution systems on 'traditional' societies, says Professor Rozelle, usually at the cost of small and independent farmers and traders.

This enables the supermarkets to avoid the higher costs associated with purchasing from millions of small farmers.

"What we've found in the Greater Beijing area is not only a rise in horticultural production, but that it is the small and poorer farmers who have become the driving force behind the production of fruit and nuts," says Professor Rozelle.

 "Farmers from wealthier villages have actually lost some of their share of the supply of all types of horticultural crops," he says. 

"The main story of horticulture marketing in China today is the domination of traditional supply channels. These are mainly small traders employing less than four people," he says. "These ubiquitous small traders actually go to the villages and buy directly from the farmers. Almost one hundred per cent of transactions are 'spot market transactions, where the goods are exchanged for cash."

Some ten per cent of farmers still take their produce to traditional markets to sell to local consumers and traders.

Professor Rozelle says that most farmers surveyed said that they were not under any pressure to change their crops or the way they are produced.

"In only three villages of the 201 we surveyed was there any attempt to influence farmers to use particular pesticides or fertilizers," says Professor Rozelle.

Professor Rozelle says that in the Chinese context, small traders with limited capital and large amounts of cheap labour can easily out-compete other types of marketing mechanisms.

"This is good news for the small farmer," he says, "at least for now. But it should be recalled how fast China is changing, and the special characteristics which allow supermarkets and small traders to co-exist may also change, with unknown consequences for China's horticultural economy."

The International Association of Agricultural Economists (IAAE) 26th Annual Conference on "The Contribution of Agricultural Economics to Critical Policy Issues" is at the Gold Coast Convention Centre, Qld, from August 12-18, 2006.

More information:
IAAE media centre, Gold Coast Convention Centre, +61 (0)7 5504 4057
Professor Scott Rozelle, Stanford University, +1 530 902 2808, 
001 86 1360 107 7109
Media contact: Prof. Julian Cribb, 0418 639245
Conference program & details:

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