About IATP

The Institute for Agriculture and Trade Policy promotes resilient family farms, rural communities and ecosystems around the world through research and education, science and technology, and advocacy.

Founded in 1986, IATP is rooted in the family farm movement. With offices in Minneapolis and Geneva, IATP works on making domestic and global agricultural policy more sustainable for everyone.

IATP Web sites

About Think Forward

Think Forward is a blog written by staff of the Institute for Agriculture and Trade Policy covering sustainability as it intersects with food, rural development, international trade, the environment and public health.

Categories

Archives

RSS feeds

 Subscribe in a reader

« July 2007 | Main | October 2007 »

September 2007

September 27, 2007

Start-up challenges of a Chinese food co-op

(Ed. note: IATP's President, Jim Harkness, is blogging from China as he meets with experts on China's food and farm system)


The meeting I blogged about on Saturday on the Guoren food co-op had left me pretty confused, so I was glad when professor He invited me to visit their store and give some feedback. Why had they chosen to link consumer and producer co-ops? How could they function as a delivery service and have two stores with 79 members spread all over Beijing - an enormous city of 18 million?

Traffic_2

It took over an hour by cab to get from my friend Elizabeth’s apartment in the center of town up to Tiantong Yuan, a massive residential district in the far north. Traffic in Beijing somehow manages to get worse despite already being almost at a standstill during rush hour. Soon the cars will travel only in reverse…


Tiantong Yuan consists of over 100 30-story apartment blocks, packed into a few square kilometers of northern Beijing. Over 300,000 people live there, a population of about the size of St. Paul, MN. (OK, some of us think of that as a major city!)


As you can see from the picture, all that was planned and built were apartment blocks, with some small open spaces in between. There is no commercial area. As a result, entrepreneurial residents have turned first-floor apartments into little bodegas to provide for basic needs. This is a huge, middle class “food desert” due to bad urban planning, rather than long-term urban decay.

Tiantong_yuan

The address of the co-op store was one of those first floor apartments. Professor He was held up in traffic, so Zhang Chao, the marketing manager of the co-op, showed us around. He explained that the co-op does want to build a base in a specific community, instead of having its members spread all over the city. The immediate neighborhood has over 60,000 residents, all of whom face the same lack of access to fresh food. So the strategy started to make more sense to me, until I saw the actual items for sale. The co-op has its own little bodega, with liquor and toilet paper and instant noodles. And then they have their co-op members’ store, a single room with shelves of dry goods on two walls. But there’s no fresh food! The store sells dry noodles and various organic grains (millet, rice, wheat flour), but most products are higher-priced cooking ingredients or medicinal products.


This is where the problem of the producer/consumer link comes in. Guoren needs to sell what its producer members grow, and what wasn’t clear in Saturday's meeting was that none of the producers are near Beijing. They are all farming co-ops around China that have been set up in recent years as part of an effort to revive co-operative farming on a non-coerced basis. So the basic idea of setting up a co-op to meet the food needs of a community has gotten lost in the mix, and instead of cabbage and carrots they’re selling dried fungus and diced deer penis.

Coop_store

The good news is that they were aware of this problem, in part because of the meeting last Saturday. Professor He arrived and explained that they now plan to separate the functions of the co-op. So Zhang Chao will run a domestic fair trade company to market goods from the co-ops in Beijing, and separately the consumers’ co-op will build a membership based on selling food that its members want to buy. The idea behind the fair trade company is interesting. There is so little trust of the different labeling systems for healthy or organic food in China that professor He thinks it may be possible to build a different type of brand around farming co-ops. She wants consumers to think of food that comes from co-ops as trustworthy, fair and healthy. In this way, the dozens of new co-ops will have a market advantage, and through the fair trade company it will be possible to guarantee and gradually raise environmental standards on the farms.


It’s important to note that for now, these organic food co-ops are as small and tangential in relation to mainstream organic in China as organic agriculture in the U.S. was in relation to conventional agriculture 10 years ago. A staggering 8.6 million hectares of land is under organic cultivation in China (as opposed to 2.2 million in the US), and although much is consumed domestically, a large proportion also goes to foreign markets. There are serious doubts about the quality and safety of the food being exported under the organic label because of the weakness of the certification system here. Produce is almost entirely bound for nearby markets in Japan and Korea, but more durable commodity crops such as soy go to the U.S. (You’ve probably had some if you’ve bought Silk, a popular brand of soy milk.)


The people and places I’m visiting on this trip are important because they represent the beginning of a domestic backlash against industrial export agriculture in China. I think we need to do all we can to help them, for our sake as well as theirs.

Jim Harkness

September 26, 2007

Food is Good for Everyone

(Ed. note: IATP's President, Jim Harkness, is blogging from China as he meets with experts on China's food and farm system)

On the way to the DeRunWu Organic and Natural farm near Beijing, we stopped to make a few deliveries to nearby customers. The northern suburbs of Beijing, dusty villages and cornfields less than a decade ago, are quickly being covered by sprawling, gated residential compounds. Initially built to re-create the American suburban experience for expat families, these pricey developments are increasingly occupied by China’s own growing middle and upper classes. These people are Ji’s market (the owner of DeRunWu), but they’re also the biggest threat to his business. Suburban sprawl is driving up land rents so quickly that it has become his biggest expense, and Ji’s having trouble finding farmland near enough to the city for easy next-day delivery. He pointed out large plots of fallow farmland that have been bought by speculators and left idle as they wait for the price to rise. As we wandered the well-groomed but sterile streets of the Yosemite Villas looking for the right address, we pondered the ironies of “green consumption.”

Farmers_gardensJust before we reached the farm, we passed a row of very productive-looking gardens. “This is where farmers grow the food that they eat. They use some chemical fertilizers, but no pesticides: they only use those on the crops they sell.”

Then it was on to the farm, which consists of a row of five greenhouses and the strips of ground between them. The greenhouses were built with financial support from the local government, which gave farmers free building materials, seedlings and fertilizer as part of a plan to develop the area as a strawberry production zone for the city of Beijing. But as the laws of supply and demand would have it, the price of strawberries crashed when the whole district began growing them, and many farmers turned to other crops or simply abandoned the greenhouses. Mr. Ji has a long-term lease on his farm from the local town government, and hired local farmers and an agronomy technician to work for him.

Farm_1In the winter, the metal frame will be covered with plastic sheets, and during the coldest months, straw mats as well. Aside from a few vegetables like tomatoes and eggplants, they can grow produce right through the winter at this latitude.

Instead of chemical fertilizers, the farm uses sheep dung and worm waste. (A sack of 50 kg of worm poop, costs 400 Chinese yuan per ton.) They also take spoiled or worm-eaten vegetables and make a sort of liquid goop that is spread on the fields.

Mr. Ji gets advice from agronomy professors at Beijing Agricultural University and is also constantly experimenting. On our way to the farm, he spoke animatedly on his cell phone about the new type of sawdust they are spreading on the soil this year, and how it holds in moisture and promotes a healthy community of worms and microorganisms.

ToadThere were lots of white and yellow butterflies on the farm, as well as this fat toad, which Ji pointed out as a sign of ecological health.

Mr. Ji has his own ideas about controlling pests: he doesn’t. Non-chemical treatments that other organic farmers use, such as chilli peppers, are not allowed on his farm. And his workers aren’t even allowed to kill bugs with their hands! He calls this radically non-interventionist form of farming “ecological organic,” to distinguish it from plain old organic.

As a result, the crops I saw looked pretty scraggly. It was also Monday, so crops had just been picked clean for delivery, and that probably explained the lack of yummy fresh, photogenic vegetables.

TomatoJi did find me a juicy, meaty tomato, which I had already eaten half of before I thought to document it!

Ji has installed a solar shower for the locals who work the farm. Perhaps because the crops had just been picked that morning, the workers weren’t around when we visited. Ji said they take a long lunch back in their village nearby. Labor costs are another major expense for the farm, but there are plenty of willing workers. What with the small sizes of their fields, North China’s arid climate and the disastrous schemes of local government, villagers are happy to become salaried employees like in the collective era and let DeRunWu take on the risks.

After our farm visit, Ji picked up his wife and they gave me a lift back into town. They were going to see “The Future of Food,” a documentary about industrial agriculture that we showed at IATP last fall! The library at the Sino-Japanese Environmental Training Center had just ordered a copy, and a dozen or so people were gathering to watch it together.

Just before I hopped out, I asked what subject Ji had gotten his PhD in. “Nano-Materials,” he answered. To which his wife added, “for guided missiles. He made weapons.” We were all silent for a moment and then Ji said, “Arms are only beneficial to some people, but food is good for everyone.”

Jim Harkness

September 25, 2007

An organic food store in China

(Ed. note: IATP's President, Jim Harkness, is blogging from China as he meets with experts on China's food and farm system)

Monday, Sept 24

Today I visited the operations of DeRunWu Organic and Natural. I got their phone number from a friend, a restauranteur who has purchased their salad greens for over a year. When I got through to the owner, a Mr. Ji, he said he’d be happy to show me the farm but suggested we meet at their store, which is easier to find, and go from there. The store is on a dusty road in the patchwork of urban sprawl and cornfields on the way to Beijing International Airport.

Store_window Arriving early, I had a chance to chat with the young store clerk before Ji showed up. Only on the job a month or so, he is already a touchingly earnest convert to organic food. I ask how he likes working for an organic business and he said, “It’s wonderful!” And then, with a dramatic gesture sweeping his hand across his face, “They’ve torn away the masks!” When I looked puzzled, he explained that most people hide their problems, cover up bad news or talk behind other peoples’ backs. “Here if something’s wrong we have to acknowledge it and deal with it.” I asked what this has to do with organic farming, and it was his turn to look puzzled. “For the supermarket, they use pesticides on the vegetables and wrap them up and add chemicals to make the tomatoes redder. Organic food is natural, pure, honest. Some of our vegetables don’t look as shiny or fat as those in a supermarket, and some have even been chewed on by bugs, but I feel like if bugs want to eat them then that must mean they’re safe and delicious!”

I was still basking in the sunshine of the clerk’s organic moral universe when Mr. Ji and his wife arrived and he told me how he got into this business. Mr. Ji belongs to the Back to the Land school of organic farming: “I was a PhD student at Beijing Aviation University, and I belonged to a student group called Read and Till----you know, like farming and studying? We did some investigations about pesticides in food and found that there basically wasn’t any food that didn’t have some chemicals in it. So one of our teachers arranged for some people from his home village to set aside some land to grow vegetables just for us, and we agreed to buy as much as they could grow.”

Ji’s job was to manage communications with the farmers, arrange deliveries, etc. In 2002 and 2003 the students bought fresh vegetables grown without the use of pesticides or chemical fertilizers. The next year, Ji and some friends decided to start an organic farming business marketed to non-students, but after a year they had lost money and his friends quit. By this time, 2005, Ji had a PhD and a post-doc at Beijing University (the equivalent of China’s Harvard) but he was hooked on farming. He had already given away all his books and had nothing left of his academic profession but his framed diploma.

So Ji quit school altogether and he and his wife set up DeRunWu Organic and Natural, which is just finishing its second year in operation. They rented farmland near Beijing and hired locals to work for them. DeRunWu is mostly a home delivery business. Two times a week, they deliver 8-lb cloth sacks filled with “whatever’s fresh and ready” from their farm for a fixed price of about $11. (In fact, there are lots of exceptions to the “fresh and ready” rule, and Ji and his wife keep records of the preferences of different customers: no eggplant, no tomatoes, love arugula, etc.)

Mr_and_mrs_jiThey also have a small store. Transport costs are a major expense and Ji hoped that having a store would persuade more customers to come to him. For the most part, this hasn’t happened despite discounts for vegetables bought in the store. “To my customers, money is no object, and they’d rather stay at home.” Those who do shop at the store can buy other organic and health foods there as well, and the profits from these products help keep the business afloat despite Ji’s determination to keep prices for the farm produce low and sell by the pound rather than charging more for high-value items like fresh basil.

Must sleep now. I’ll write about the farm visit tomorrow.

Storefront

Jim Harkness

Challenges of a farmer-consumer co-op in China

(Ed. note. IATP's President, Jim Harkness, is blogging from China as he meets with experts on China's food and farm system)

Saturday Sept. 22

Today I went to a half-day meeting to discuss the Guoren Rural-Urban Mutual Aid Co-operative. Professor He Huili of China Agricultural University organized the meeting to review the rocky first three months of the co-op, and get ideas for how it might become more viable.

Guoren is a sort of a hybrid, intended to provide a market and a fair price for various organic farms and farmer-owned rural enterprises, and also to guarantee safe and healthy food for its urban members. Farmers join by committing a certain amount of their produce, urban members (there are currently 79) pay 100 Chinese yuan for a share in the co-op. Guoren's problem has been lack of activity: the members just aren't buying. Meanwhile, one of the co-op's rural organizers described ambitious plans for processing, handicrafts, countryside day tours, etc. as the next phase of development.

It was a rather contentious discussion. An academic expert said that Guoren was trying to do too much. A shareholder said that maybe instead of talking to experts, the co-op should have a full meeting of its members to discuss what to do. Someone questioned the workability of a single co-op with producer and consumer members. There was disagreement about whether Guoren should be a charity or a business. A successful commercial market garden businessman offered to take over running the whole operation. Etc, etc.

After half a day, I was exhausted and a bit frustrated, but to Professor he's credit, she took it all in very patiently. When I made my exit after lunch, she was re-convening the group to go over the co-op business plan. On Tuesday, we're meeting at the store to talk some more.

Jim Harkness

September 21, 2007

Meeting China’s Man of the Year

(Ed. note. IATP's President, Jim Harkness, is blogging from China for the next two weeks as he meets with experts on China's food and farm system)

Despite all the concerns about air pollution affecting athletes at next year’s Olympics, Beijing’s skies are brilliant blue this week. Friends tell me I was fortunate to miss a nasty spell of smog that ended the day before I arrived.

This afternoon I met with Mr. Li Changping. Li became a hero to China’s farmers in 2000 when he wrote a letter to then-Premier Zhu Rongji exposing the bitter hardships facing the rural Chinese. A Communist Party member who had worked for 17 years in rural townships in Central China, Li detailed the desperation of farmers in his township, 80 percent of whom were losing money and 85 percent of whom were in debt, and railed against corrupt local officials. Amazingly, his letter actually reached the Premier, who demanded that the provincial government carry out an investigation. But in a sign of the limited reach of the central government in contemporary China, nothing came of the probe and once it was over, Li himself was “investigated” by the local government and fired. (He now works as a rural development consultant.) Nevertheless, the affair brought to light the severity of the economic and social crisis in rural China, and Li was named “Man of the Year” by one of China’s leading newspapers.

I wanted Li’s perspective on rural co-operatives as a means for farmers to reduce risk and get a better deal in the market. Last week I visited farms in southwestern Wisconsin that are members of America’s largest organic dairy co-operative with Professor Zhou Li, a Chinese researcher who’s currently in residence at IATP. Afterwards, Zhou said that co-ops based solely on production and marketing have been tried in recent years in China, but almost all collapsed as soon as there was a downturn in the price of their products. But was this because of some objective condition in China, some legal or economic obstacle to this form of organization, or because of the way the co-ops were organized or managed? It wasn’t clear from my discussion with Zhou. Li Changping is developing a credit cooperative and thinks this is a more viable approach to helping Chinese farmers, whose size and lack of collateral for loans (since they don’t own their land) effectively shuts them out of the official banking system.

We also discussed lots of other things: political and economic theory in contemporary China, cooperatives vs collective agriculture, the problems of the government-supported corporate agriculture model (“Company Plus Farmer’), and the different approaches to rural cooperation pursued in Taiwan and Japan. I’m still not clear on what the key obstacles are here and now, but it was a great start!

Jim Harkness

September 03, 2007

After the Flood

A few weeks ago, heavy rains flooded a stretch of land along the Minnesota and Wisconsin border that is home to hundreds of organic farmers. Reports have been devastating - with many individual farms reporting hundreds of thousands of dollars in damages.

Aarick Beher and Gretta Wing Miller have made a powerful short video capturing the challenges facing these farmers - both from the weather and the marketplace. The video raises some of the unique challenges that make organic farmers particularly vulnerable to weather-related disasters, including the issue of flood insurance. Many organic farmers can't afford flood insurance. Those that do usually have conventional flood insurance - meaning that they are compensated according to prices for conventional crops, not organic crops which are usually much higher. Organic expert Jim Riddle explains some of these issues in an article published in Agrinews.

Last year, IATP and the Wedge Coop started the Sow the Seeds Fund to help support local food systems. Because so many farmers in this region supplied food coops and grocery stores in Minnesota and Wisconsin, in the short-term the Fund will focus its resources on helping these farmers get back on their feet. Food coops in both states have already collected tens of thousands of dollars in contributions - a real testiment to how committed consumers in both states are to local farmers. But as Beher and Millers' video shows, much more will be needed.

Please consider taking a minute and contributing to the Sow the Seeds Fund to support sustainable and organic farmers in the Midwest.

Ben Lilliston

The Immigration/Farm Bill Connection

Recently, two topics have received a lot of media coverage. The U.S. Farm Bill, which just passed through the House and is now headed for a vigorous debate in the Senate. And the new Bush Administration plan to crackdown on employers using immigrant workers.  But little has been written about the connection between these two issues?

Why are so many immigrants heading from countries in the south, particularly Mexico, to the U.S.? What is causing economic conditions in these countries to be so poor that people must brave an increasingly militarized border to find work in the U.S., particularly in agriculture and food production?  Unfortunately, policies in the U.S. are at least partially responsible for the immigration wave of the last decade. Previous U.S. Farm Bills and a radical free trade agenda have contributed to devastating rural communities in countries like Mexico – where most new immigrants are migrating from.

In a new addition to our Farm Bill series, we explain how the 1996 U.S. Farm Bill (written to comply with trade agreements) increased production of a number of raw agricultural commodities and dramatically drove down market prices. Mexico prematurely implemented its tariff reduction commitments under the North American Free Trade Agreement (NAFTA). The result was a dramatic increase in overly cheap agricultural exports into Mexico and the loss of over 2 million agriculture-related jobs in the rural countryside. Corn exports alone increased by 500 percent after NAFTA, and prices dropped 50 percent. Mexican farmers haven’t been able to compete.

Agribusiness companies operating in two or all three countries have been the big winners from the 1996 Farm Bill and NAFTA. They have benefitted from artificially cheap agricultural commodities for their food products and animal feed, and from cheap immigrant labor that has come with a crippled Mexican rural economy.

In October, IATP will host a conference titled Lessons from NAFTA, to assess how family farmers, workers and consumers in Canada, Mexico and the U.S. have been affected by this pivotal trade agreement, and point toward a new fair trade agenda.

We could start with a new U.S. Farm Bill that guarantees fair prices and stops agricultural dumping into poor countries.

Ben Lilliston