Community Supported Agriculture (CSA) in China is Developing its Own Characteristics

 

In honor of “CSA Day” today February 22, I thought I would share some observations from my recent exploration into the community supported agriculture movement in China. I am familiar with trends in Japanese agriculture related to ecological agriculture, organic farming, rural community development and alternative food movements, and have had the opportunity to do many deep dives into various aspects of the US organic industry.

However, when I learned that the number of CSAs has been exploding in China, amid increasing discussions of environmental issues and food safety concerns, I was interested in understanding how community supported agriculture was developing in China, in a country with strong state-directed agriculture policy and weak tradition of civil society and community engagement in urban areas. My chance came at the 10th China Community Supported Agriculture Conference held in Chengdu, Sichuan Province in December 2018.

The conference attracted over 1,000 attendees including CSA farms, academics, politician and government staff, farm tourism and education business operators, agritech & food tech companies, certification agencies, architects as well as international guests from France, Netherlands, Canada, the US and Japan.

In China, where farmland is still collectively owned and the majority of farmers are smallholders, China’s CSA movement tends toward developing commercial-oriented agricultural business opportunities through the establishment of environmental-friendly agricultural practices as well as trustworthy distribution channels to consumers. To be honest, I felt that the current Chinese CSA approach is quite different from the original CSA concept of ‘maintaining and developing small-scale organic family farming and of achieving local food sovereignty,’ and there is less sense of ‘community.’

However, with CSA developing in this direction and seemingly embraced by the State government as one tool for improving food safety and building confidence among consumers. CSA could have a large social and political impact in China’s future agricultural scene. It makes Chinese CSA an important movement to watch.  Here are some main observations.

1.CSA Projects are Rapidly Expanding but In a Different Trajectory than the US or Japan

CSA, as defined by the International Network for Community Supported Agriculture (URGENCI) is the concept of partnerships between producers and consumers to maintain small-scale organic family farming and of achieving local food sovereignty for communities, as a solution to the problems associated with global intensive agricultural production and distribution. These partnerships of course will take different forms around the world, depending on social, political, economic or agricultural realities.

The CSA movement was born in the US on two farms during late 1980’s in response to an increasingly industrialized food system, marked by large private farms, retail supermarkets and top-down food safety laws and standards. CSA in the US has expanded to 5,000-6,000 programs and more than 12,000 farms are involved in CSA now. Today, you can see various styles of CSA, and the farms working with CSA programs are not only organic but also conventional.

CSA was originally an economic risk-sharing system whereby (mostly urban) consumers signed an annual subscription contract with local small-scale organic farmers before the planting season. The system often includes labor sharing and educational meetups to strengthen the ties between member farmers and consumers. A concept similar to CSA was also seen in Japan and other countries, from the early 1970’s. In Japan, this system is known as teikei (literally ‘partnership’), and it emerged from an awareness of increasing health problems caused by agrochemical usage, during the course of rapid economic development in Japan. Teikei aimed to create relationships between small-scale organic farmers and urban consumer communities.

The concept of Community Supported Agriculture (CSA) was introduced in China almost 10 years ago. In China, one challenge was already that the word used for “community” (shequ) is a word adopted by the Chinese government in 1980s to describe administrative units that took on the welfare and community services role that had previously been carried out by the work unit (danwei) under the communist planned economy system. This word did not necessarily include the broader concepts the word “community” as used in other countries. Together with the lack of a tradition of participatory self-governance in urban cities and the rapid expansion of massive population influx to urban areas, it has been difficult for a broader concept of community to take root in Chinese cities.

Prof. Wen Tiejun of Renmin University described the expansion of the network of CSA farms in China.

The pioneer CSA in China was a farm called Little Donkey Farm in Beijing, which was set up in 2008 as a Renmin University project by PhD student Shi Yan, who had learned about the concept from a small CSA farm in Minnesota. In 2009, a year later, Professor Wen Tiejun, one of the most influential agriculture economists in China, organized the Chinese federation of CSAs with 9 CSA farms, and started to lead the CSA initiative in China. Since then, the little seed sown by the Little Donkey Farm in Beijing has now sprouted to over 1,000 CSA projects all over China and over 100 ,000 farmers and consumers are involved in these projects. The CSA farm concept is attracting highly-educated young Chinese people to start their own farming businesses.

2. The Concept had evolved from ‘Community Supported Agriculture’ to ‘Ecological and Social Agriculture’

Throughout my discussions, it became clear that the CSA movement in China is trying to position itself as much broader concept, encompassing all business opportunities that can strengthen ties between farmers and consumers while ensuring eco-friendly agriculture and food safety.

Concern about food safety, as well as concerns about the environmental impact of farming, are drivers of many Chinese agriculture policies and movements. The idea of organic agriculture (youji nongye), in China, is strongly associated with certification systems and is commercially driven by more by consumer’s food safety concerns than by an underlying political or social philosophy. There is already a growing market for organic labelled foods, with well-recognized corporate players and government support. Shentai Nongye (Ecological Agriculture) is the farming concept promoted in government policies China since late 1980s, meaning eco-friendly sustainable farming model integrating crop and livestock operations.

In order to emphasize that CSA also includes the concept of “society”, the Chinese CSA federation decided to change the Chinese translation of CSA several years ago from “Shequ Zhichi Nongye (literally, Community Supported Agriculture)” to “Shehui Shentai Nongye (Socio-Ecological Agriculture)”. By adding the aspect of Society (Shehui), the CSA Federation emphasizes the importance of ties between farmers and consumers and builds on the already familiar concept of “ecological agriculture”.

3. China’s CSA initiative has strong political and academic support

Academics have played an important role in the CSA initiative in China, from the very first CSA farm. Furthermore, academic-led initiatives are seeking more policy and government involvement in order to broaden the concept and their practices.

For example, the opening event of the conference was a joint signing ceremony for various large-scale government agricultural investment projects in the region, and in the first panel session, several Chinese agricultural economic professors discussed the need for political support for CSAs.

This is strikingly different from the US and Japan, where originally the CSA movement started as voluntary networks of farmers and consumers who shared a philosophy of seeking alternative ways of farming as a counter-movement against intensive, commercial large-scale farming.

5. Technology is being introduced especially in food distribution, payment, traceability and certification.

The event also had a farmers’ market. High-quality honey could be bought using the cashless WeChat Pay app.

Technology was extensively covered in the conference, especially various technologies related to food distribution, traceability and certification. With the development of agri-tech and food-tech in China, CSA is also trying to utilize technology to find the optimal way to reach consumers and to ensure an efficient route from farm to consumers. For example, sessions in the conference introduced various cutting-edge blockchain test-cases in agriculture and food chains in developing countries, as well as a fish resource conservation program utilizing tech solutions.

4. The Chinese CSA concept is diverse and includes farmers markets, farm stays, local food branding, rural development and local seed conservation.

A native seed exchange event was hosted for farmers from various regions in China

The wide diversity of topics covered in the conference was impressive. For example, organic farm managers discussed technology in an organic farming panel: a local corn seed conservation program presented on its collaboration with a university and local villages; rural development was discussed from the viewpoint of international architects; the Sichuan government explained its local food branding initiative and its marketing and export strategy.

Professor Kazumi Kondoh from Chuo University in Japan, who presented on the Japanese teikei system at the conference, raised her concern that the Chinese CSA movement is more focused on profitable business models and is not putting enough effort into encouraging the philosophy of organic agriculture and the ultimate objective of achieving local food sovereignty. Her concern is understandable.

But, if CSA is to be influential in China, it must work with the government under the current Chinese political system and be aligned with current government policies. With growing demand for safe food and escalating concerns about environmental issues, people see clear business opportunities in developing reliable food chains as well as in agri-tourism and agri-education. The CSA movement in China will inevitably be shaped by China’s own characteristics and it remains an interesting area to watch in order to understand the bigger picture of China’s agricultural development and food systems.

 

 

 

 

 

 

Former IFC-Executive Takuro Kimura Joins Meros as Strategic Advisor

Meros Consulting is pleased to announce that Takuro Kimura, former executive at the International Finance Corporation (IFC), has joined Meros as Strategic Advisor.

“We are thrilled to have Takuro join our team and be able to share his extensive experience in public and private sector agribusiness investment, particularly in the context of investment in agriculture development in emerging economies,” says Meros’ Managing Director Chisa Ogura.

Takuro’s previous career at the IFC spanned two decades and included posts in Washington, Tokyo and Cairo. The IFC is the private sector arm of the World Bank Group, offering investment and advisory services to support private-sector development in emerging markets. Takuro was Global Head, Manufacturing from 2011—2014 and had previously held senior positions covering agribusiness, services and energy (oil, gas and mining) across all continents.

Most recently, after returning from Washington to Tokyo, Takuro was the Managing Director at Orix Corporation’s Global Business Development and Investment Group, focusing on investment in emerging economies with a focus on agriculture value chains, healthcare and related logistics

“We have gotten to know Takuro over the past three years, and have been impressed with his energy, insightful business perspectives and interest in developing teams and people. He brings valuable, practical insights from past investment projects, both on the factors for success and the risks to anticipate,” said Lucia Vancura, Meros’ Director of Operations and Global Markets.

“I believe food and agriculture is the cornerstone of global sustainability. Smart investments and business innovations can create significant social and economic impact, “ said Takuro Kimura. “Meros has solid sectoral experience and a strong commitment to identify business and investment opportunities for its customers. I look forward to working with Meros to support the creation of business opportunities, especially for Japanese companies, in emerging markets in Asia and beyond.”

Takuro’s experience in bringing public and private sector players together to create value for growing businesses is extensive and he is deeply familiar with the as needs and expectations of investors. Together, we will be focusing on developing strategies to strengthen global food systems and promote economic development along the agricultural supply chain in fast-growing markets, particularly in Southeast Asia, India and Africa.

Takuro is a graduate of Kyoto University’s law faculty, completed graduate work at the Ecole Superieure du Commerce de Paris (ESCP) and received his MBA from ISA-HEC in France. He began his career at Sanwa Bank in Tokyo and later joined the IFC-managed Africa Enterprise Fund, focusing on SME investment consulting in Sub-Saharan Africa, based in Abidjan, Ivory Coast.

New study projects CPTPP and Japan-EU trade agreements will reduce US dairy exports to Japan and boost competitors

A Meros Consulting study released Wednesday by the U.S. Dairy Export Council projects that the two new trade agreements made by Japan will benefit global dairy suppliers such as the EU and Oceania, while costing the US dairy export industry billions of dollars in lost sales.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entered into force on Dec 30, 2018 and the Japan-EU Economic Partnership Agreement (JEEPA) went into effect today, February 1st, 2019. All major dairy suppliers to the Japanese market, including Australia, New Zealand, Canada, the Netherlands, Germany, Denmark, Ireland and France, are included in one of these two agreements. Only the United States is missing, after pulling out of TPP negotiations in January, 2017.

Through industry interviews to assess price sensitivity and product substitutability, together with extensive historical data analysis, Meros developed a model to quantify the future economic impact of those agreements on key U.S. dairy products and ingredients over the next two decades. The study showed that the US could double its market share with a level playing field. However, without quick action by the US to regain competitiveness in the market, US dairy exports will be at a strong competitive disadvantage, particularly for cheese, whey and lactose, resulting in lost US sales of $5.4 billion over 21 years.

Now is a particularly critical time for global cheese suppliers to Japan as Japan’s cheese imports are expected to show a 1.6-fold expansion over the next 10 years under CPTPP and JEEPA. As a result, the US dairy industry is supporting further bilateral trade talks with Japan. As USDEC CEO and President Tom Vilsack commented in a January 30th news release, “U.S. dairy farmers and processors strongly support the Administration’s launch of trade talks with Japan. We hope this report provides fresh ammunition to our negotiators about why a strong U.S.-Japan agreement is so important for American agriculture.”

U.S. Dairy Export Council’s release of Meros Consulting’s Analyzing the Impact of the CPTPP and Japan-EU EPA on US Dairy Exports to Japan can be downloaded here:

Analyzing the Impact of the CPTPP and Japan-EU EPA on US Dairy Exports to Japan