Big reward for small farmers

Garlic and ginger growers help themselves by helping exporter expand in land and business

Liu Zhengming's newly built farmhouse is equipped with all the electrical appliances and mod-cons you would find in a city household.

"As you can see, life is much better now," says the 59-year-old ginger grower with a beaming smile.

That is because the farmer from Gongjiazhuang village, near Laiwu in Shandong province, transferred the rights to his land to China's largest exporter of ginger, Laiwu Manhing Vegetables Fruits Corporation, in 2008.

In China, farmland belongs to the state, but is allotted to farmers in small plots on long-term leases, usually 30 years.

Before the transfer, Liu had been struggling financially and had to borrow money to pay for his daughter's college tuition.

Growing ginger for Manhing, Liu now earns about 30,000 yuan ($4,950; 3,630 euros) a year plus 1,200 yuan rent from the transfer of the rights for his 2 mu (0.133 hectares) of land.

"It's a good deal. Before, I could make only about 4,000 yuan a year by growing corn and peanuts on my plot," he says.

Liu is one of 10,000 small farmers working together with Manhing in Laiwu municipality, China's major ginger and garlic production center, which helps protect them against the vagaries of the market and fluctuating prices.

Since 2004, Manhing has signed contracts with local village committees to acquire land-use rights for a total of 667 hectares in Gongjiazhuang and three other villages in the Laiwu city area.

The company employs the farmers to plant ginger. They earn a fixed salary plus payment for the transfer of land-use rights (600 yuan for the transfer of 1 mu or 667 sq m). The company also pays the village committees 100 yuan per mu as a management fee.

"We spend the money paying for road construction, tree-planting and other public welfare projects, which has solved a lot of problems and brought great changes to our village," says Shen Yulu, director of Gongjiazhuang village, which has leased 80 percent of farmland to Manhing.

The company has also signed contracts with farmers in Laiwu to produce ginger and garlic in an area of around 2,000 hectares. It offers them a reasonable price even when there is a sharp decline in market price.

"Farmers tend to team with us, because our price is about 10 percent higher than the market price for those who have a cooperative relationship with us," says Liu Jianzeng, president of the company.

For the two types of partners, it provides the same seeding, fertilizers and technological training to ensure product quality and uniformity.

Established in 2001, Manhing has developed into a large export-oriented company specializing in production, processing, sales and storage of agricultural products.

The company, which was the exclusive ginger supplier to the 2008 Beijing Olympic Games, now exports 100,000 tons of garlic, 80,000 tons of ginger and related products, and 100,000 tons of fruit to more than 80 countries and regions annually.

The first eight months of 2013 saw its export volume reached $86.9 million, accounting for more than 30 percent of Laiwu's total. It has been the country's leading ginger exporter for the past six years.

The central government encouraged farmers to transfer their land-use rights in 2008 to develop large-scale agriculture and raise the incomes of rural people, although Manhing had started acquiring them four years earlier.

"We had to do it," says Liu, who believes only large-scale and standardized farming can improve output and food safety level. "Before, we mainly bought the agricultural products from farmers, but it is hard to control the quality, and we could not always get a good price."

Using standardized farming, irrigation and natural fertilizers, the ginger grown on the 113 hectares of transferred land in Gongjiazhuang village now is sold to Japan and Europe, which have higher quality standards, for $1,200 per ton - three times the price they used to get from selling to countries in Southeast Asia and the Middle East, Liu says.

"If you want to get into the foreign high-end market, you have to meet quality standards," he says, adding that there are 309 items on the tests for pesticide residue that ginger has to pass before entering the Japanese market.

Only organic and biological fertilizers are acceptable, says Wang Yuexiu, one of hundreds of technicians hired by Manhing to train farmers and provide technical assistance.

"We use safe and ecological means to control disease and pests, and the farmland is irrigated only by water that has undergone purification treatment in the facilities established by us around the planting bases," Wang says.

An online quality control system has also been established, allowing consumers to monitor every step of the production process on the company's website, from planting and storage to processing and trading.

To meet the challenges of price fluctuation and the cancellation of export tax rebates for some primary agricultural products, Manhing has extended its industrial chain and created more processed products with high-added value.

It has developed more than 100 products, ranging from sushi ginger, garlic granules and powder, to ginger oil, wine and ale, as well as related cosmetic and healthcare products.

"This kind of healthcare product made of garlic can be exported at a price of 14,000 yuan per ton, about 40 percent higher than the price of raw garlic," says Manhing president Liu.

A 213,440 sq m food industrial park is being built at a cost of 1.5 billion yuan. It will be home to research centers, logistics bases, and advanced processing facilities, such as fully automated dehydration and quick-freeze production lines introduced from the United States.

With the project due to be completed next year, the company is expected to produce a total of 15,000 tons of dehydrated agricultural products and 40,000 tons of quick-frozen ones annually.

"By then, highly processed products will account for half of our total product lineup, which will help improve the annual export volume to $300 million," Liu predicts.

wangqian2@chinadaily.com.cn

(China Daily Africa Weekly 01/10/2014 page16)