Why Export Garlic, Chosen for Quality, Was Returned
Recently, a batch of garlic from Shandong exported to South Korea was returned, and the garlic farmers suffered huge losses. So what exactly was the reason for the return? When facing South Korea and other countries with similarly high standards, strict requirements and severe trade protection, how should garlic farmers control risks?
The 2,200 tons of garlic returned by South Korea this time came from Lanling County, Shandong, the "Hometown of Chinese Garlic." The county is a premium garlic-producing area in China, and this batch exported to South Korea was chosen as the best of the best; the garlic farmers had already gone through one round of selection when sorting it.
But even though it was China's highest-quality garlic, after arriving at the port of Busan, South Korea, it was still forced to be returned because the quality did not pass. After a quality inspection, South Korea's Agricultural Products Management Institute determined that "seriously defective garlic exceeded the standard, and the goods were required to be sent back." "Seriously defective garlic" refers to garlic with pests or diseases, damage, poor shape, mold or rot.
It turned out that South Korea imported garlic from Lanling County through bidding, and the tender documents required that "seriously defective garlic should account for less than 5% of all garlic." During spot checks, South Korea's Agricultural Products Management Institute found that "seriously defective garlic" exceeded 5%. Liu Su, executive deputy director of the Vegetable Quality Supervision, Inspection and Testing Center of the Ministry of Agriculture, explained that in China there is not yet a concept of "seriously defective garlic"; a similar concept is "defective garlic." For example, for first-class and premium vegetables, the proportion of "defects" cannot exceed 1%.
The garlic farmers, however, had many doubts and raised the following: First, before shipment, according to the tender requirements, the Korea Agro-Fisheries & Food Trade Corporation had already carried out a quality inspection of the garlic, and only after the quality inspection passed was it packed and transported. But after the goods arrived at the port of Busan, South Korea's Agricultural Products Management Institute determined that the quality was unqualified. Why were the results of the two inspections inconsistent? Second, according to the tender documents, the body qualified to inspect goods at the port and require their return was South Korea's Food and Drug Safety Ministry, but the reason given by the South Korean side for the return was that the quality inspection by South Korea's Agricultural Products Management Institute was unqualified. Why did the body qualified to require the return change from South Korea's Food and Drug Safety Ministry to South Korea's Agricultural Products Management Institute?
The South Korean side said that the reason the quality inspection results before shipment and after arrival at the port were different was that the two inspection methods were different. The inspection method of the Korea Agro-Fisheries & Food Trade Corporation was that before inspection, fewer than 3% of whole heads of bad garlic could first be removed from each bag, and then the inspection would be carried out. But the inspection method of South Korea's Agricultural Products Management Institute was to take out one quarter of the garlic from each bag for inspection, without removing bad garlic in advance; therefore, the detected proportion of "seriously defective garlic" became higher.
In addition, for this export of garlic, South Korea's agency company was Han'guk Daenong Nongsan, and the tender documents the garlic farmers received were also translated by Daenong Nongsan. The tender documents originally provided by the Korea Agro-Fisheries & Food Trade Corporation ran to more than 40 pages, but when translating, Daenong Nongsan translated only the basic content and important information. According to the original tender documents, South Korea's Food and Drug Safety Ministry was responsible for animal and plant quarantine of the garlic, while the Agricultural Products Management Institute was responsible for quality inspection. The two institutions had different divisions of work, could both inspect the goods at the same time, and could both require returns. This error was caused by the South Korean agency company, and was not an administrative overreach by South Korea's Agricultural Products Management Institute. Therefore, China's Ministry of Commerce stated that this return incident was a contract dispute.
In fact, South Korea lacks agricultural resources and relies heavily on imports for agricultural products, which creates a contradiction: it cannot avoid importing agricultural products, and at the same time it cannot avoid protecting South Korean farmers. South Korea's solution is to impose large tariffs on imported agricultural products in order to maintain the competitiveness of South Korea's domestic agricultural products. Taking garlic as an example, in 1998 South Korea announced a tariff of as high as 315% on Chinese frozen and vinegar-pickled garlic. It was not until last November, after President Xi Jinping met with South Korean President Park Geun-hye, that it was decided to exempt a variety of agricultural products from tariffs, including garlic.
South Korea has always been conservative and cautious in its imported food policies. South Korea has nearly ten thousand clauses and standards restricting the import of agricultural products. This kind of precision testing makes it very difficult for agricultural products to pass once they have quality problems. According to data from the General Administration of Quality Supervision, Inspection and Quarantine, in 2013 alone, the Ningbo port received as many as 131 batches of agricultural products returned from South Korea, with a value of 9.34 million US dollars.
Experts believe that when facing countries with strict quality inspection such as Japan and the United States, quality issues are of paramount importance. The main factors hindering China's agricultural exports are that the quality of agricultural products does not pass, production methods are traditional, management standards are not strict, and farmers' hygiene habits and safety awareness are relatively weak.
According to the secretary of the Lanling County Party Committee, this was the first time the garlic farmers had done foreign trade, and they had no experience. Garlic export trade involves all links including garlic production, processing, packaging, storage and transportation, and export trade, and is a systematic project. Among these complicated links, the only one the garlic farmers could understand clearly was "processing at the Chinese place of origin"; the remaining links had to be entrusted to the South Korean agency company.
Experts suggest that familiarity with the procedures can make clear which are "uncontrollable factors," including quality spot-check methods, trade protection policies, market changes and so on. Lessons should be drawn, and timely predictions and responses should be made. A oversight in any link may lead to major losses.