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900 Million Farmers in China

The history of reform and opening up has witnessed three calls for the development of rural markets. 900 million farmers constitute the world's largest group of consumers and have created the biggest business opportunity in China.

In the face of the dual competitive pressure posed to China by the hi-tech advantage of the developed countries and the price advantage resulted from the currency devaluation in surrounding countries, China has clearly indicated: From the long-term point of view, while actively exploring international markets, it is essential to actively develop the domestic market, particularly the rural market. This is a strategic choice in conformity with China's national conditions.

The rural market is the most dynamic, practical pivotal point in expanding domestic demands and boosting economic growth. Inadequate effective demand has become the greatest hindrance to China's current economic development. In the series of macro-control measures to be adopted in the second half of this year, exploring the rural market is regarded as "a rope for capturing the tiger". Experts' estimation indicates: Every 100 billion yuan worth of final consumption realized in rural areas will generate 235.6 billion yuan worth of consumption demand for the entire national economy.

It is also a brand-new starting-point in the readjustment of economic structure and the readjustment of product mix. Today, the buyer's market has penetrated to every corner of China's economy. Of the 900-odd important industrial products, the utilization rate of over half of the production capacity is less than 50 percent, structural readjustment is thus imminent.

In the effort to successfully open up the rural market, industrial enterprises must produce commodities geared to rural demands; and commercial enterprises must skillfully build smooth and swift marketing channels.

There are many difficulties confronting the effort to explore rural markets. Reasons for this are many. For example, some local governments have inadequate understanding of the importance and urgency of exploring rural markets, fear difficulty and lack confidence in accomplishing this task; quite a number of industrial and commercial enterprises still harbor the concept of "valuing cities while belittling the countryside", this is manifested in the fact that the product mix is incompatible with the rural market demand, the variety of commodities on sale is single and farmers find it inconvenient to buy.

In fact, the rural market has enormous potential and there are many favorable conditions for developing the rural market. So long as industrial and commercial enterprises really attach importance to the rural market, carefully study farmers' demands, exert great efforts to do a good job in the work of exploring the rural market well, they can definitely achieve the anticipated results.

Industrial enterprises stress production of commodities geared to market needs, while commercial enterprises emphasize smooth and fast marketing channels.

Efforts should be made to develop new sales methods, such as chain-store, agency and distribution center and to establish various forms of sales networks wherein industry and commerce, commerce and commerce, town and country, state-owned commerce and individually-run and privately-run commerce join hands. Chinese business people will have ample scope for their abilities in rural markets.

The key to success in exploring rural markets lies in increasing farmers' income. It is necessary to open up the rural consumer goods market to allow farmers to buy things; and it is also necessary to first open up the rural agricultural produce market, so that farmers' purses will be bulging

Farmers' income is stepping into the period of a new round of growth at reduced rate.

Slow increase in farmers' income is the greatest factor thwarting efforts to explore rural markets. When farmers' purses are not so bulging, increase in actual consumption demand will be slow. To increase farmers' income is, in essence, to enhance the rural economy's adaptability to the socialist market economy. In the opinions of authoritative persons, it is essential to get hold of two links: one is "what to grow". Farmers have to grow farm crops easy to yield added value.

To do so, it is necessary to readjust and optimize the agricultural structure, develop high-efficiency and high-value-added characteristic agriculture. Second is "how to sell the produce". To increase farmers' income, it is essential to solve the problem concerning ties between the farmer and the market, farmers should be enabled to smoothly enter the big, ever-changing market. This requires development of industrial management of agriculture, and cultivation of a wholesale market system, intermediary service system and information service system.

Cultivating a wholesale trading market system by making use of the advantages of tradition, regional location, resources and industry is an important aspect in invigorating the flow of agricultural produce and industrial products. This has been proved by the experience of many localities.

China May Hold Future of Food Technology

By Dennis Avery
Senior fellow and Director, Center for Global Food Issues at the Hudson Institute 

Is it possible the First World will give China a virtual monopoly in agricultural biotechnology, destined to be one of the most valuable technologies of the 21st century?

Have the United States and Europe thrown away billions of dollars in agriculture-related biotech earnings and hundreds of thousands of clean, high-tech research and support jobs?

The United States and Europe have spent billions of dollars doing basic research in genetically modified crops and animals to make foods that are better-tasting, more nutritious and kinder to the environment.

Will China now step in and charge the United States and Europe steep royalties for the right to grow the new organisms that result from this research?

Those are all strong possibilities, in the wake of the environmental group Greenpeace's stunningly swift and successful campaign to ban genetically modified foods and crops.

First World investors were afraid to be caught in another controversy like tobacco, or another set of baseless class-action lawsuits like the controversy over silicone breast implants.

They've bailed out on agricultural biotechnology long before governments dared act. To duck the controversy, Monsanto's orphaned agricultural biotech unit will be dumped into a hostile stock market along with its multibillion-dollar laboratories and patents.

Ditto for the big agricultural biotech units of Europe's Novartis and Zeneca. Look for layoffs from all three. And don't expect the laid-off scientists to land jobs at public research institutions.

The publicly funded research labs will be even more gun-shy of agricultural biotechnology now than the private sector. The erstwhile scientists will have to lay aside their doctorates and start new careers.

A lucky few may find jobs in human medical biotech, which the environmental movement has not attacked yet. This has nothing to do with risks to people or the environment. Despite media hype, no real dangers related to biotech foods have ever been documented.

But Greenpeace seems to want a smaller, poorer human population, so they're willing to frighten the world back into the scientific Dark Ages. The one thing certain is genetic engineering in food production will not disappear.

When the astronomer Galileo published his proofs in 1632 that the Earth revolved around the sun, the Catholic Church put him under house arrest. The church had declared the Earth the center of the universe. But people could never look at the sun in quite the same way again. They had new knowledge.

The First World may be so comfortable it can afford to pass up biotech foods. But the Third World is still struggling to provide adequate diets for its growing population.

For the developing world, the choices are stark. The can either use biotechnology to raise yields, grow more low-yield crops by clearing tropical forests or import food from the West. Given those choices, biotech foods look awfully attractive.

Most Third World countries are too small or poor to advance agricultural biotechnology on their own. Countries like Brazil and Argentina could assemble the scientific resources but they're afraid of losing their export sales to nervous European and Japanese consumers.

India might like to develop high-yielding biotech crops to ease its cropland shortage, but its own prickly activists are still arguing over hybrid seeds. They're likely to hamstring Indian biotech into the near foreseeable future.

China is the one country in the world with the scientific power to carry biotechnology forward in agriculture, the urgent need for massive amounts of additional food and feed and no need to allow unfounded food scares to be published in its newspapers.

China already has over 1 million farmers growing genetically modified cotton, corn and soybeans because of lower costs. Anyone who doubts China's ability to carry forward good science is ignoring the country's fabulous history and its recent ballistic missile tests.

"Golden rice" by itself may be enough to secure genetically engineered foods' reputation among Chinese consumers. Asian women are at high risk of birth complications because of iron deficiency due to the phytate in the rice they eat.

Golden rice counteracts the phytate and provides ample dietary iron. It also contains plenty of Vitamin A, also lacking in many rice-culture diets.

The International Rice Research Institute is already breeding golden rice genes into popular rice varieties for the people of Asia and Africa. Is Greenpeace callous enough to try to frighten poor rice-culture consumers away from golden rice and back to childhood blindness?

Using biotechnology, China should be able to produce highly attractive foods, such as healthier fats for cooking, allergy-free nuts, more tender steaks and, at last, a tasty off-season tomato.

Every vitamin and mineral needed by the human body could be engineered into our foods, saving consumers billions of dollars in food supplements.

When First World consumers find out about such goodies, China can export them or charge farmers in other countries a fee to grow them.

The biotech crops will also feature sharply higher yields, especially on marginal farmlands where drought and acid soils currently limit production. Greenpeace should cheer this, since it will directly help save Asian tropical forests.

First World farmers will lose a significant part of their export potential, of course, if Third World farmers can produce higher yields and more desirable specialty foods through biotechnology. At the moment, that seems to be the price they pay for farming in a rich, overfed country.

**Dennis T. Avery is based in Churchville, Va., and is director of global food issues for the Hudson Institute of Indianapolis.

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