China's organic vegetable market is large, but farmers need to invest with caution

The 2015 China International Food Safety and Innovation Technology Exhibition opened in Beijing on June 11. The three-day exhibition attracted nearly a hundred companies, including well-known domestic and international enterprises such as COFCO, Zhonghe, and Nestle. At the exhibition, food companies, regardless of size, without exception put up the banner of the "whole industry chain," among which safe, healthy, organic fruits and vegetables became each company's trump card.

At the exhibition, the author saw that exhibitors had brought crisp and refreshing fruit cucumbers, glossy purple eggplants, and tomatoes so green they were turning red, drawing many visitors to stop and taste them. According to the exhibitors, this is the first link in their whole industry chain, organic fruits and vegetables produced in the safest way. Apart from a portion used for sales, some of these organic vegetables are also used to produce dumplings, vegetable noodles, and so on. The exhibitors admitted that in this link of ecological fruit and vegetable cultivation, they are not making money.

Organic vegetables are called "pure and then purer" food. From base to production, and from processing to market, there are very strict requirements. In the many processes from production to processing, the use of pesticides, chemical fertilizers, hormones, genetically modified organisms, and other artificially synthesized substances is absolutely prohibited. In cultivating and producing organic vegetables, the biggest difficulty encountered is the problem of fertilizer and other aspects. For this reason, growers have no choice but to raise cattle and sheep themselves.

Because China's organic vegetable industry is in a stage of development, the number of competitors in the industry is currently not large, but product differentiation is not great, so it is more inclined toward price competition. For many companies, part of their organic vegetables is transported from nearby provinces, and costs such as freight are relatively high, so the organic vegetables consumers buy are not cheap. On the other hand, because consumers are paying more and more attention to the safety of fruits and vegetables, supply is far less than demand, so the price of organic fruits and vegetables is also far higher than that of ordinary vegetables. Taking broccoli as an example, in October last year the price of one jin of organic broccoli reached 35 yuan. Some vegetable farmers sell the organic vegetables they produce to Hong Kong, China, where the vegetable price can reach over a hundred yuan per jin.

Because the price is attractive, there are also many people optimistic about this market, and some farmer friends are eager to try. However, a relevant person in charge of the Zhonghe Group reminded that this market looks attractive, but it is not easy to do, because the preliminary work requires at least 3 to 5 years, or even longer, the amount of investment is especially large, but the benefits are not especially high. For large enterprises, deep food processing and industrial subsidies within the group can be used to make up for the shortcoming that fresh food is not profitable in the short term, but the returns carry risks, and farmer friends still need to be very cautious in investing.