Behind the difficulty of selling agricultural products lies insufficient product development

“The red dates knocked down from the trees cannot be sold, and the money from selling dates is not enough to pay the workers for knocking them down; it would be better to leave them hanging on the trees.” The helplessness and anxiety are written all over the face of Du Zhonggui, a villager in Lianhuachi Village, Kehu Town, Linxian County, Shanxi Province.

After the Start of Winter, on the Lüliang Mountains, red dates hang from the branches all over the hills. Once a sight to behold, they are now a source of heartache. A recent investigation by reporters in the county found that the deep-seated reason why cheap dates hurt farmers is that the supply of date products remains at a low level, and insufficient product development has led to a relative surplus of red dates in the county, which has also become a bottleneck for red dates in Linxian and even Lüliang.

Fresh dates used to sell for 5 yuan per jin, now they cannot even fetch half that price

Du Zhonggui contracted 50 mu of date groves, and this year's output could reach 50,000 jin. The dates he knocked down piled up more and more, but very few could be sold, so he had to dismiss the hired workers and first deal with the dates in his yard. He is not the only one. The Hongjie Red Date Professional Cooperative, to which Du Zhonggui belongs, currently has more than 20 members, with a date grove area of more than 1,000 mu, and most of them face the problem of difficult sales.

Red dates from Linxian, Shanxi, have advantages such as small pits, thin skins and thick flesh. At present, the county's red date area has exceeded 850,000 mu, covering 17 townships, more than 400 villages and more than 370,000 date farmers. Income from the date industry already accounts for nearly half of the county's total agricultural output value, and more than 70% of farmers' income comes from the red date industry.

Du Zhonggui said: “In the past, fresh dates with good appearance sold for 5 yuan per jin, and dried ones sold for more than 8 yuan, but now they cannot even fetch half that price.”

Du Zhonggui did an account for the reporter: a worker costs 100 yuan a day, and drying one jin of dates requires 0.7 yuan. Adding the earlier pruning and agricultural input costs, selling one jin of dates for 1 yuan cannot even recover the cost. According to data analysis provided by the county's Date Industry Bureau, this year's output is expected to reach 360 million jin, a new high in the past 3 years.

On one side there is reluctance to sell, on the other side there is selling at a low price. In 2011, Shanxi's red dates were also battered. Three years later, the Lüliang Mountains are once again covered with red dates.

170 operating entities have 170 red date “brands”

“There are more than 170 red date processing enterprises and cooperatives of various sizes in Linxian, and there are more than 170 red date brands, without forming a regional image brand, so market competitiveness is not strong.” said Miao Chengbing, deputy production manager of Shanxi Tianyuan Date Industry Company.

“Achieving year-round supply is too costly for date farmers.” said Xue Hailiang, head of the Hongjie Red Date Professional Cooperative. In terms of red date storage, date farmers in Linxian can dry them themselves and store them in their yards, or rent controlled-atmosphere cold storage.

“Once they enter cold storage, you lose money. The cold storage fee for one box of red dates is one yuan, and the cost is very high.” Du Zhonggui said.

To make matters worse, Postal Savings Bank cancelled the loan to the Hongjie Red Date Professional Cooperative. The cooperative had no choice but to borrow 300,000 yuan at 3 fen interest to start machines for drying and processing.

Fresh-eating dates cannot be sold, making it difficult to form a year-round supply chain. Then what about processing capacity?

In 2009, Kehu Town, a major red date production town, built the Jin-Shaan Red Date Professional Cooperative Park, forming an industrial chain of red date production, processing and trading. It includes 20 processing workshops, with an annual processing capacity of 5 million kg.

“The cooperative park mainly carries out primary processing such as red date drying. Judging from the current market situation, this year it will barely maintain half its processing volume.” said Li Baoming, deputy mayor of Kehu Town.

In 2012, Linxian established a red date industrial park, attracting and investing in the start of more than 10 red date processing projects, with a designed annual processing capacity of 280 million jin, accounting for 60% of the county's red date output, with products involving categories such as medicines, health products and food additives.

As the first processing enterprise to settle in, Tianyuan Date Industry has 5 production lines for red date beverages, preserved fruits, concentrate extraction, dry powder and fruit pies, with more than 50 product varieties. Its current annual processing capacity reaches 2,000 tons, converting 2,500 tons of red date raw materials. “But due to a shortage of funds, the infrastructure in the park has not yet been fully invested in and completed. Red date processing remains in the former small workshops, and processing capacity is very limited.” Miao Chengbing introduced.

The concept of product supply urgently needs upgrading

At the government's invitation, the famous e-commerce figure Wang Xiaobang held a presale in his Taobao store. Later, at the call of many media outlets in Shanxi Province, public welfare charity sales were also held, but the effect was minimal.

After learning about this, Hao Zhuanxian, chairman of Huilong Market, Shanxi's largest agricultural products wholesale market, took the initiative to connect with the relevant county departments and offered to let Linxian red dates enter the market with 3 years of rent waived, but this was also politely declined.

Consumers buy on rising prices and not on falling prices. Coupled with a lack of product marketing concepts, extensive products relying on e-commerce and traditional commercial channels have also failed to untie the dead knot of difficult red date sales. This means that the main reason for difficult sales is not information asymmetry.

Li Jie, director of the Pomology Institute of the Shanxi Academy of Agricultural Sciences, said that the market positioning of Lüliang jujube needs to be re-examined. Objectively speaking, jujube is not an excellent variety among red date varieties, and under the impact of Xinjiang jujube it has even less advantage. The larger the planting scale of 2 million mu, the more unsalable the crop becomes in a bumper year.

A considerable portion of the workforce in Xinjiang's jujube industry is also from Shanxi. While they fight among themselves on price, the concept of jujube as a woody grain has been proposed by Zhengzhou's “Haoxiangni” Date Industry for many years. What needs to be noted is that Shanxi, as a kingdom of minor grains, has not made achievements in deep processing through nutritional combinations and multi-species stacking; red dates are also a medicinal and edible variety, and Shanxi, the birthplace of traditional Chinese medicine, has developed very little in this regard.

Shanxi also does not lack support for technological innovation. The National Jujube Germplasm Resources Nursery of the Pomology Institute of the Shanxi Academy of Agricultural Sciences is a jujube germplasm resource platform of the Ministry of Science and Technology and the Ministry of Agriculture. Their patented technologies for deeply processed products such as red date vinegar drink and red date brandy have so far attracted few inquiries.

This also confirms that saying: demand is never lacking, but the eyes to discover demand are lacking. When problems arise in the market, entrepreneurs must first discover market demand, improve and research and develop products around that demand, and raise the level of market supply. This is both the path of industrial upgrading and the way to end difficult sales.