SelectedIssuesRelate dtoContractFarmingof OrganicA

Slide1: 

Selected Issues Related to Contract Farming of Organic Agriculture in the Greater Mekong Subregion by Anthony M. Zola MIDAS Agronomics Co., Ltd & Mekong Environment & Resources Institute - MERI

Slide2: 

Introduction Markets for organic products Experience of Chinese farmers growing organic products for supermarkets in Japan Comparative advantage of the GMS for contract farming of organics strategy Potential and constraints in development of agro-processing of organic products Steps to be taken to materialize this strategy Issues which need attention from researchers

INTRODUCTION: 

INTRODUCTION Contract farming is proposed here as a systematic approach to introducing the cultivation of organic horticulture crops for export, while addressing rural poverty issues in GMS upland areas. The use of Asian agribusiness firms with successful previous experiences in contract farming is one mechanism for introducing the organized production of food and agricultural products for export to regional markets. This approach is expected to take hold as the demand for organic products expands among global consumers.

World Markets for Organic Products - 1 : 

World Markets for Organic Products - 1 Annual growth rates of 15-30 % in Europe, the United States, and Japan 20 to 30 % of consumers surveyed in Europe, North America, and Japan, claim to purchase organic foods regularly European markets for organic vegetables showed high growth in 2001 and 2002, pushing market revenues above the US $1 billion mark in 2003

World Markets for Organic Products-2: 

World Markets for Organic Products-2 UK market value was estimated at $1.47 billion; Imports accounted for an estimated 65 % of the organic retail value the largest market for organic vegetables in Europe is Germany France is likely to show the highest growth in the coming years; the French organic vegetables market is one of the least developed in Europe Denmark and Sweden have the highest consumption rates of organic vegetables in Europe

World Markets for Organic Products-3: 

World Markets for Organic Products-3 United States: total organic sector of agriculture has grown 44% in certified acreage from 1992 to 1997, and cropland grew by 111%; continues to grow Japan’s vegetable imports are 11% of total agricultural products and 15% of vegetable consumption China exports over 50 varieties of vegetables to Japan, making up 40% of Japan’s imports

Growing Organic Vegetables for Supermarkets in Japan: The Chinese Experience - 1: 

Growing Organic Vegetables for Supermarkets in Japan: The Chinese Experience - 1 Japanese super-markets have experimented with vegetable growing in China for 8-10 years Only in past few years has the quality of Chinese vegetables been good enough to allow large-scale sales to Japan China's vegetables are much lower priced than those vegetables exported to Japan from USA, New Zealand, and Australia

Growing Organic Vegetables for Supermarkets in Japan: The Chinese Experience - 2: 

Growing Organic Vegetables for Supermarkets in Japan: The Chinese Experience - 2 Chinese vegetable producers are using Japanese seeds and technology to improve skills Chinese vegetables now are almost indistinguishable from Japanese vegetables The landed price in Japan for most Chinese vegetables is about half of the Japanese price

Growing Organic Vegetables for Supermarkets in Japan: The Chinese Experience - 3: 

Growing Organic Vegetables for Supermarkets in Japan: The Chinese Experience - 3 Opposition in Japan to additional increases in imports of vegetables from China: Trade balance between Japan and China is strongly in China's favor; and, Food safety issues: high levels of pesticide residues have been found in vegetables imported from China

Comparative Advantage of the GMS for Production of Organic Vegetables - 1: 

Comparative Advantage of the GMS for Production of Organic Vegetables - 1 Uncontaminated areas in GMS Potentially suitable areas for production of organic products for export to Japan, Korea, and other markets: Northeastern Cambodia Northern Lao PDR and the Bolovens Plateau of southern Lao PDR Large areas of Shan State, Myanmar Central highlands of Viet Nam

Comparative Advantage of the GMS for Production of Organic Vegetables-2: 

Comparative Advantage of the GMS for Production of Organic Vegetables-2 Existing arrangements for regional cooperation: GMS, ACMECS, Industrial Cooperation for Cambodia, Laos, and Myanmar, and the Basic Framework for Development Cooperation in the Mekong River Basin Japanese familiarity with the subregion Funding facilities: MPDF, JBIC, ADB Infrastructure development: EWEC, NSEC Successful cross-border agricultural production supply chains: CP, Frito Lay, China

Constraints to Contract Farming - 2: 

Constraints to Contract Farming - 2 Poor terms and conditions for investment Limited access to credit and financial resources Limited access to markets Storage facilities for agricultural products are limited, inadequate, or non-existent Low productivity Limited access to information for decision-making

Opportunities for Contract Farming : 

Opportunities for Contract Farming

Strategy for Contract Farming: 

Strategy for Contract Farming Market research Marketing extension Market development Pilot projects Quality standards Understanding Quality control mechanisms Learn from on-going projects Role of government: monitor & evaluate pilot projects Business promotion among potential investors (credit, technical assistance, market access) Nucleus plantations Organic product certification program

Issues Needing Attention from Researchers: 

Issues Needing Attention from Researchers Research on indigenous farming techniques & indigenous knowledge linked to environmentally friendly agriculture Documentation of environmental impacts of organic production of fruits and vegetables in remote upland areas of the GMS. Documentation of successful previous experiences in contract farming in the GMS Case studies on experiences of Chinese farmers producing organic fruits & vegetables for Japanese supermarket chains in north & south China Regional study to identify “uncontaminated” areas of GMS and suitability for production of organic products Examine trade routes throughout the GMS used to facilitate movement of organic produce out of GMS to Japan and other areas of East Asia.

The End: 

The End Thank you