By Xu Xiaoqing & Zhang Yunhua, Research Department of Rural Economy of DRC

Research Report No 133, 2011

The pilot project on regional management of farm product quality and safety was first made in the city of Anqiu of Shandong Province in 2007. The goal was to improve the quality and safety of export farm products, meet the qualitative requirement of export farm products and deal with international technical barriers to farm product export. After a few years of exploration and popularization, the province has made tangible achievements in introducing the regional management model for the quality and safety of export farm products. Furthermore, the province has moved from emphasizing the quality and safety of export farm products to ensuring the quality and safety of domestic-consumed farm products. Within the areas slated for regional management pilot project, the regulatory system on farm product quality and safety has become sounder and the overall quality and safety of farm products have become higher.

I. Origin and Evolution of Shandong's Regional Management of Quality and Safety of Export Farm Products

In 2006 as Japan comprehensively introduced the affirmation table of agricultural chemical residues in food products and as the European Union introduced a new act on food safety and hygiene, the food and farm products exported by China were found, through testing, to have residues of pesticides and animal drugs several times. As a result, China's export farm products received repeated warning and notification abroad. Of the quality and safety issues notified by foreign countries, about 70% were related to the pollution arising from the residues of pesticides, animal drugs and heavy metals. In 2007, the inspection and quarantine bureau of Shandong Province began to introduce in the city of Anqiu the regional management of the quality and safety of export farm products. Regional management meant that the government integrated the administrative and test resources, tightened the overall management of pesticides and animal drugs within the region, standardized the planting, breeding, production, processing, supervision and management of farm products, and eventually enforced regional certification. In 2008, the province of Shandong popularized this regional management model to other county-level administrative counties with fairly good management. In 2009, the provincial government promulgated the Guidelines on Accelerating the Building of the Demonstration Areas for the Quality and Safety of Export Farm Products. The goal was to further standardize the regional management model. Taking county-level administrative divisions as the basic units and adhering to the working mechanism featuring government leadership, departmental interaction, corporate roles and market operation, the demonstration areas adopted a "five-in-one" developmental model and established six major systems. The "five-in-one" model highlighted the main roles of enterprises, the dependence on bases, the focus on standards, the emphasis on brands and the guidance of markets. The six systems were the quality and safety standard system, the agricultural chemical input control system, the quality and safety traceability system, the monitoring, evaluation and warning system, the corporate quality and safety credit system, and the diversified international market system. The farm product exporting areas must ensure they had no hidden dangers at sources, no illegal inputs, no management blind spots, and no export barriers.

In 2010, the province enriched the contents of regional management. Specifically, it integrated foreign and domestic markets so that more internationally qualified farm products from the province would be supplied to the ordinary people in China. Accordingly, regional management shifted from emphasizing foreign market to emphasizing both foreign and domestic markets. At the same time, the province set an overall requirement for regional management: enforce international standards, integrate foreign and domestic markets, build Shandong brands, and bring prosperity to both farms and the province. It also actively promoted pairing between demonstration areas and major chain supermarkets so as to fully tap their respective advantages, widen marketing channels for demonstration areas, and guide supermarkets to establish direct procurement bases in demonstration areas and open special counters within these supermarkets.

II. Shandong Made Preliminary Achievements in Regional Management of Farm Product Quality and Safety

Thanks to years of efforts, the province has introduced the regional management model on farm product quality and safety to 60 county-level administrative divisions. In particular, 24 of these administrative divisions have been certified as the "demonstration areas for the safety of export food and farm products". In 2009, the State Quality and Quarantine Administration began to introduce Shandong's experience to other parts of the country. So far, the experience has been popularized in 261 county-level administrative divisions in China's 27 provinces, municipalities and autonomous regions. Of the 25 demonstration areas for export food and farm product safety recommended by the State Quality and Quarantine Administration, Shandong has 10. Within the province, demonstration areas have been steadily expanded to include 7.89 million mu of planting bases, 1,849 breeding grounds and 1.34 million mu of sea area, covering vegetables, meat products, aquatic products, fruits, peanuts and other farm products.

Within Shandong's demonstration areas, the overall quality and safety of farm products has improved, with the inspection and quarantine qualification rate being higher than 99.5% for three consecutive years. In the meantime, the notifications by foreign countries over the safety problem of export food and farm products have been reduced year after year. In particular, the residues of pesticides and animal drugs in 2010 were 66% lower than in 2009. Higher quality and safety have boosted the growth of farm product export. In 2010, Shandong's farm product export earned 12.7 billion dollars, up 30% over the previous year. The province accounted for more than one-fourth of China's total farm product export in that year and ranked first in the country for 11 years running. Meanwhile, the quality of farm products supplied to domestic markets has visibly improved, and is now largely at the same level of those exported to foreign markets. In all, the province has established more than 50 enterprises to pair demonstration areas with supermarkets, more than 4,000 direct farm product procurement bases, more than 1.5 million mu of fruit and vegetable bases, about 200 special counters in supermarket chains. This pairing has covered about 100 varieties of farm products.

Better farm products increased the income of farmers. In 2010, the farm products produced in Weihai entered the procurement networks of the Japanese Aeon, the South Korean Lotte and other multinational companies, and netted 270 million dollars in revenue. In particular, ginger saw its producer price rising 100% and its export price rising 43%, bringing an additional 500 million dollars to growers. Besides, apple export revenue rose 2,400 yuan per mu. The Huirun Fruit Co., Ltd. in the city of Wendeng helped farmers in standardized production. After the main product, "Red Fuji" apple, was certified as green food, it successfully entered both domestic supermarkets and foreign markets. The price was 0.4~0.6 yuan higher per kilogram and the economic efficiency was tangibly better. In 2010, the prices of ginger and apple produced in the city of Rushan were respectively 0.3 and 0.4 yuan per kilogram higher than those produced by neighboring areas. The price difference alone brought an additional 170 million yuan to farmers.

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