Cultivating Knowledge among Farmers

A report in the China Economic Review, "Seeds of Hope", quotes Mr. Jerry Lu, executive vice-president and co-CFO of Chaoda, "The problem with individual farms operating on small pieces of land is that it is too fragmented". During the interview, Mr. Lu revealed what Chaoda is doing to help develop the Chinese agricultural industry. This includes:

• Chaoda acquires land use rights from groups of farmers and then employs them to work on the land. It mutually benefits both farmers and Chaoda.

• To achieve large scale farming, Chaoda builds out the infrastructure and puts in better irrigation systems, greenhouses and plant shelters.

• Chaoda also teaches farmers to adhere to a rigid quality-control system. Mass production is preceded by pilot runs to establish optimal growth conditions, and extensive R&D work is carried out on enhancing yields and crop protection.

• With its well-established channels among trading companies and distributors, Chaoda can sell its products much better than individual farmers, who typically do not have access to the sales channels and do not know what is in demand.

Around 30% of Chaoda's produce goes for export, according to the report, with the rest destined for domestic wholesalers and supermarkets. This is a large-scale operation, yet it makes up less than 1% of China's vegetable industry as a whole. Thus, there is great potential for Chaoda. "The key is to bring good market knowledge to the production source", Mr. Lu is quoted as saying. Chaoda will continue to put great emphasis on cultivating a sense of professionalism among China's farmers in order to boost quality and productivity.