Abstract
“Farmer-Supermarket Direct-Purchase” is a new model for connecting small Chinese farmers with the modern retail markets. Supermarkets purchase agro-products directly from small-scale producers, using a farmer cooperative or agricultural enterprise as an intermediary. Matching small producers with a modern retailer ensures a stable market for farm produce. Reducing the number of middlemen between producer and retailer lowers procurement costs for retailers and improves transmission of food safety standards and quality control assurances through the supply chain. Supermarkets arrange training to help small-scale farmers solve various problems, and help them adapt to a new purchase environment. The model has spread in China through a combination of private sector initiative and government support. This chapter provides guidance to supermarkets, cooperatives, and producers who wish to replicate the model in other developing countries.
The views expressed here are those of the authors and do not reflect those of the U.S. Department of Agriculture.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
The Chinese term for the strategy, nongchao dui jie, is not easily translated; it connotes the formation of a linkage or interface between farmers and supermarkets.
- 2.
Jiang Zengwei, “Farmer-Supermarket Direct-Purchase: a good way to feedback agriculture”, “Seeking Truth”, 2009: 23.
- 3.
Zhao Tieqiao: Response to questions from journalists, when MOA decides on establishing farmers’ professional cooperatives, Oct 14, 2009.
- 4.
Thomas Reardon, “Inspiration of the development of supermarket in developing countries on development of agriculture”, speech on International “supermarket and agro-product production and marketing”, Mar 24, 2004.
- 5.
The statistic bureau did not publish data on chained supermarket, What could be found are only information on “Top 100 supermarkets of China”, published by China Chain Store and Franchise Association every year. See http://www.ccfa.org.cn/viewArticle.do?method=viewArticle&id=ff8080813e0d6a70013e15f3bfcd0040&publishcid=ff8080812e2b85c8012e2b9bc5800001
- 6.
- 7.
This idea was agreed, when author discussed with the purchase directors of Carrefour, Wal-Mart, Metro, Wu-Mart, Chaoshifa, TESCO and so on.
- 8.
For example, In December 2012, one supermarket chain received 2 million Yuan ($320,000) from the Chongqing municipal commerce commission for the direct purchase program. Guangdong Province’s agricultural marketing and supply cooperative system published a list of 54 distribution centres to be constructed in 2013 using a special fund designated for the direct purchase program.
- 9.
Regular press conference of Ministry of Commerce, Feb 16, 2012
- 10.
In 2006, the author had investigated in Henan Province, and found out that at beginning farmers sold tomatoes to brokers at a price of 2 Yuan/kg. Afterwards these tomatoes were transported to the City of Zhengzhou (a distance of 100 km), where the suppliers sold the tomatoes to supermarkets at a price of 5 Yuan/kg.
- 11.
According to China’s National Standard on sales format, community supermarket: 500–2000 m2 operation area; comprehensive supermarket: 2000–6000 m2; Large-scaled supermarket: more than 6000 m2. http://wenku.baidu.com/view/b1ab946527d3240c8447efda.html
- 12.
Rural land in China is collectively owned and can be leased or subcontracted, but not sold.
- 13.
Data resource: a paper named “JiajiayueWenquan Green Vegetable Planting base”, http://www.jiajiayue.com/OtherView.Asp?id=59
- 14.
For example, the Anhui CCU manages four cities: Hefei, Bengbu, Xuzhou and Yancheng. Hefei and Bengbu belongs to Anhui Province, Xuzhou and Yancheng belongs to Jiangsu.
- 15.
In China, “farmer professional cooperatives” are focused on farming operations and are distinguished from village cooperative organizations that collectively own and manage land, and they do not engage in nonagricultural activities.
- 16.
This idea was proposed by Mr. Eric Legros(previous CEO of Carrefour China), when he first communicated with Dr. Hu Dinghuan about Carrefour DP project. As a foreign invested company in China, Carrefour thinks that it has obligation to contribute to China.
- 17.
Author: this term is targeted to national DP, the demand quantity of CCU is not so big.
- 18.
The reason of this term is avoid the previous Carrefour suppliers to imitate as DP suppliers. The previous suppliers do not produce by themselves, and mainly purchase products from wholesale market to provide to supermarket.
- 19.
Sebastien, “Training on DP” in 2010.
- 20.
Sebastien, “DP training” 2011. The waiver of fees and shortened-payment periods for direct purchase suppliers is required by government authorities.
- 21.
“DP Training course document for Farmers’ Professional Cooperatives”, composed by Carrefour Food Safety Foundation, May 22, 2013, Aksu, Xinjiang Uygur Autonomous Region.
- 22.
The case of Linong Farmers’ Professional Cooperative is composed by Mr. Wu Jianhe (DP coordinator of Carrefour in Xinjiang), appreciate it very much. The authors also consulted other online articles.
- 23.
While Chinese cooperative by-laws specify democratic votes to elect officers, it is likely that Mr. Zhang exerts a high degree of control over the cooperative since he founded it and the cooperative—like many others in China—appears to be named after him and he is quoted in all news media articles about the cooperative.
- 24.
See “Farmer-Supermarket Direct Purchase’ Allows Xinjiang Agricultural Products to be Sold Nationwide”, Urumqi Online, March 8, 2011. http://www.chinaxinjiang.cn/newindex/sdzt/t20110308_723402.htm
- 25.
Data resource: author directly asked the quality manager who is responsible for this work.
- 26.
Data resource: author interviewed this manager through phone call.
- 27.
Data resource: author interviewed SOCOMO manager through phone call.
- 28.
Premier Li Keqiang proposed when investigating family farm in Jiangsu Province, that “to develop modern agriculture through stock cooperative, family farms and cooperatives”. The same idea was put forward in “Document No. 1 of 2013”.http://www.dz.www.com/xinwen/guoneixinwen/201303/t20130329_8171059.htm
- 29.
The Chinese communist party’s role as a business network is discussed by McGregor 2010.
- 30.
For example, cooperatives in Jiangxi Province only have an average member quantity of 11. http://www.ncnews.com.cn/ncxw/jrnc/t20090827_480796.htm
References
China Business (2011) Carrefour SOCOMO set sail from China: first batch of agro-products purchases in China will be shipped to Europe. http://www.cb.com.cn/1634427/20111208/309364_2.html. Accessed 8 Oct 2011
China Business (2012) Carrefour SOCOMO promote upgrade of export of Jiangxi navel orange. http://life.cb.com.cn/12724987/20121126/429342.html. Accessed 16 Nov 2012
Defois S (August 28 2009) DP training resources in Pinghe of Fujian Province
Defois S (March 1 2010) Guangdong province direct purchase training
Frachon B (May 22 2013) Let’s export together, SOCOMO training in Xinjiang
Guo H, Yang H, Zhang R (2008) Analysis on influencing factors of members’ trust to cooperative leaders—based on investigation on part of the members in Zhejiang province. Chinese Rural Econ 8
Hu D (2010) Farmer-supermarket direct-purchase: a how to guide. Chinese Agricultural Science and Technology Press, Beijing
Hu D, Zeng X (2009) Opportunities and challenges of farmer-supermarket direct-purchase. Chin Farmers’ Coop 01
Hu D, Yang W, Yu Z (2009) Farmer-supermarket direct-purchase and development of farmers’ professional cooperatives. Rural Oper Manage 8
Legros E (June 8 2010) The preface of Dinghuan Hu’s book, farmer-supermarket direct purchase: a how-to guide?
McGregor R (2010) The party. Harper Collins, New York
SOCOMO Socomo secures first position as Spanish produce trading company. http://www.freshplaza.com/news_detail.asp?id=993#SlideFrame_1
SOCOMO (May 2013) Introduction on SOCOMO in North District
Xin J Quality Manager of Metro, Win-win Situation of food quality traceability system. http://wenku.baidu.com/view/d576fab265ce050876321311.html
Xu J, Wang X (2009) Analysis on contract agriculture, its organization model and its influence on farmers’ income, Chinese Rural Econ 4
Yang S (June 2009) Thirty years of a Chinese rural household—from perspective of sociology, Jiangsu Social Sciences, Jiangsu
Zhang X (2009) Explore the development trend of farmers’ professional cooperatives. Manage World 5
Zhu L et al. (2011) Thinking of the promotion of farmer-supermarket direct-purchase on modernization of agro-products circulation, China Secur Future 9
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer India
About this chapter
Cite this chapter
Hu, D., Gale, F. (2016). An Innovative Marketing Model for Fresh Produce in China: Farmer-Supermarket Direct-Purchase. In: Rao, N., Radhakrishna, R., Mishra, R., Kata, V. (eds) Organised Retailing and Agri-Business. India Studies in Business and Economics. Springer, New Delhi. https://doi.org/10.1007/978-81-322-2476-1_7
Download citation
DOI: https://doi.org/10.1007/978-81-322-2476-1_7
Published:
Publisher Name: Springer, New Delhi
Print ISBN: 978-81-322-2475-4
Online ISBN: 978-81-322-2476-1
eBook Packages: Economics and FinanceEconomics and Finance (R0)