1. The opportunity & Challenges of Farmer-Supermarket Direct
Purchase in China
Author: Dr. Dinghuan Hu
Professor of Chinese Academy of Agriculture Sciences
Chief Representative
Office of Wageningen University & Research Center in China

2. China’s Agro Policy
With 4.76% of arable land in the world, China may support 20.5% of the
world population, which is closely related to the active agro policies of
Chinese government. The keys of China’s Agro Policies are as follows:
1. Ensure the scale of basic farmland;
2. Improve the output of agricultural products in unit area through the
development of agro science and technology;
3. Adopt various measures to increase farmers’ income;
4. Ensure the security of grains and food;
5. Optimize agricultural product processing and market distribution system.

3. China’s Fast Developing Agriculture
 Since 1980s, China’s agriculture has achieved great success.

4. Challenges for China’s Agro Sectors
 1. Farmers’ income increases less fast
than urban residents’;
 2. Agricultural products' markets and
price are instable;
 3. How to improve the food safety of
agricultural products;
 4. How to satisfy the new needs of
middle class.

5. Traditional Supply Chain of Vegetable

6. Seeding

7. Planting

8. Sale to collector

9. Wholesaler

10. Processing

11. Wholesale market in Beijing

12. Wet Market

13. It is difficult fo sell production
 The price of agro production always become very
low, and farmers have not any profits
 In April and May of 2011, the vegetables’ price is
at 0.08 RMB.

14. Traditional Supply China of Agricultural Products
传统农产品供应链采购的价值增值过程
78%
farmer
broker wholesal Wholesale
er market Supplier of
farmer supermarket Superma
rket
12 ％
farmer
5％
farmer
5％
farmer
2RMB 2.2RMB 3RMB 4RMB 5RMB

15. Traditional Supply China of Agricultural Products
传统农产品供应链采购的价值增值过程
farmer
78%
broker wholesal Wholesale
er market Supplier of
farmer Superma
supermarket
rket
12 ％
farmer
5％
farmer
5％
farmer
1 day 2 days 2.5 days
1.5 days 3 days

16. Food Safety Issues
• Shanghai Pudong Clenbnterol Hydrochloride
In September 2006, over 3 00 people in Shanghai had suffered
2006 from toxicities by Clenbnterol Hydrochloride, it involved.
• several food safety events have occurred
2007 Since the “Sudan Red” event, there was “Peacock green” event, and
“big head” Baby event.
• Melamine milk powder event
2008
• Guangzhou Clenbnterol Hydrochloride
2009
2010

17. Fast Developing China’s Supermarkets

18. The big challenge of supermarkets
 As fast development of supermarkets,
the competition within supermarkets
become
 Strictness
 1. How to reduce the cost ；
 2. How to improve the fresh of products
；
 3. How to increase the food safety ；
 4. How to attract more customs

19. The History FSDL
 FSDL started in 2007 ：
 Ministry have meeting with CEOs of 9 biggest
supermarket, and asked the directly purchase
agro-production from producers ；
 The FSDL in 2011 ：
 In 2011, there are 2000 supermarkets work on
FSDL, and 14000 FAs take part in FSDL.

20. Main Models of Farm-to-Supermarket Linking
Promoted by Ministry of Commerce and Agriculture, many supermarkets carry
out “farm-to-supermarket linking "programs, namely, supermarkets directly
purchase agricultural products from the producers.
Carrefour Model
supermarkets+ cooperatives +farmer members
Metro Model
supermarkets +leading enterprises +farmers
Jiajiayue Model
Supermarkets + farmers

21. Supermarkets and Government in Farmer-to-supermarket Linking
Function of Supermarkets Function of Government
 Provide a great amount of
 Improve the purchase price of training for cooperatives;
agricultural products by 10%;  Support the cooperation
 Support the development of between farmers’ cooperatives
cooperatives of farmers; and supermarkets through
 Improve farmers’ plant programs;
technology through training ；  Assist cooperatives to get in
 Establish the concept of touch with supermarkets;
agricultural product standards  Help solve the problems
for farmers; between supermarkets and
cooperatives.

22. Achievements of Carrefour’s Direct Purchase from Farmers
200 多家合作社参加项目，采购金额达
1.5 亿元。
HELONGJIANG
JILIN
XINJIANG
LIAONING
INNER MONGOLIA
BEIJING
HEBEI
SHANDONG
NINGXIA
QINGHAI
GANSU
SHAN’XI
HENAN
JIANGSU
TIBET SHANGHAI
ANHUI
HUBEI
SICHUAN ZHEJIANG
CHONGQING
JIANGXI
FUJIAN
HUNAN
GUIZHOU
TAIWAN
YUNNAN
GUANGXI
GUANDONG
HAINAN

23. Number of FA
5
HLJ
XJ
JL 3
8 LN
31 6 29
TJ
IM
2 23 BJ 4
-
NX 1 -
60
HeB SD -
QH
3 5 11
JS
11
HeN
GS
SX 16 16
SH
TB
11 31
-
AH
-
31 HuB
SC CQ - ZJ 9
14
13
JX
GuZ HuN
23
FJ
YN 15 GX TAIWAN
-
27 -
8
GD
27
HN

24. Farmer-to-Supermarket Linking Meaning
farmer
wholesal Wholesale
broker Supplier of
er market Superma
farmer supermarket rket
farmer
20-30 ％ Profit
10-15 ％ 10-15 ％

25. Farmers’ Professional Cooperative in Liangli Town, Dangshan
county of Anhui Province
In the three years of farmer-to-
supermarket linking, the number of
members of the cooperative increases
from 100 farmer households to more
than 6000 households.

26. Fujian Cooperative Case
 Fujian Nongxin Farmers’ Professional Cooperative is located deep in
the mountains. There are more than 20 farmer households. When the
manager of Carrefour visited here in 2010, he found that there are
many bamboos here and then gave new orders to the cooperative, so
that the market problems of farmers in deep mountains were solved
and the income of poor farmers were improved.

27. Two Modes of FSDL
National Model Local Model

28. Selection criteria
2. FAs must comply with all Government
documents
2. Proof that benefits (60%) from FA must go
back to farmers
3. FAs must be located in the production
area
8. FASs have to sell what farmer number’s
produces
10. FAs must deliver from production area
(not from wholesale market)

29. Five Documents are necessary

30. The test of pesticides residue

31. Sign the contract

32. ID Card

33. Quality control

34. The process of FSDL
Payment
Invoice

35. Farmer-to-Supermarket Linking Faces Challenges
Traditional Farmers

36. The Standards of Agricultural Products in Supermarkets
Reject Criteria of Supermarkets: the unqualified rate 《 10%

37. Story of Apple

38. Production Technology Challenge for Agricultural Products-
Logistics Technology—Less of cold chain

39. Inner Mongolia Potato Cooperative Case

40. Potato system in Netherlands

41. Fail in quality control

42. The self selection machine

43. Evolvement

44. From FSDL to Socomo
 In November 1st, 2011, Carrefour China set up a
new company, Called SOCOMO China.
 The propose of this company is export Chinese
FAs high quality agro-food to international market

45. SOCOMO in Spain
 SOCOMO is a purchase department of
Carrefour group ；
 SOCOMO set up in 1987 ；
 Purchase from 42 countries ；
 Sale to Carrefour stores in 18
countries ；
 In 2011, the total purchase at 550,000
t.

46. The model of SOCOMO in China
1. Purchase teams are at fields;
2. To insure the quality and food safety of agro-
food ；
3. Help the FAs to get new markets.

47. Ticket minimum separated 3 levels to match destination
country Food Safety regulations

48. Ticket Minimum results & Volume exported
42 Chinese suppliers have been audited for FSQ Ticket Minimum
• 18 suppliers fail (42%) – main reasons: no basic traceability & lack of records
(TM <50%)
• 8 suppliers (18%) must apply a Food Safety progress plan (TM 50%)
• 5 suppliers (14%) TM between 50% and 70% can export to Asia and Middle
East countries
• 11 suppliers (26%) suitable to export according European standards (TM
>70%)
• 16 validated by FSQ department to cooperate with Socomo China

49. The case of Fujian Pomelo

50. The purchase situation of SOCOMO

51. The opening ceremony of SOCOMO

52. New market of ASDL
203
Stores
7846
Stores

53. 合作社同蔬果茂合作社 GAP ：产品质量

54. Story of Papaya in Hainan province

56. Thank you for your attention!
© Wageningen UR