China should focus on agricultural cooperatives to ensure better food safety and quality, industry experts said at a meeting on Wednesday.
Partnerships between farmers and firms can ensure product safety and quality via agricultural cooperatives, said Yin Chengjie, head of the Chinese Association of Agricultural Economics.
China has more than 980,000 agricultural cooperatives involving more than 74 million farming households, or around 28.5 percent of the country's total.
Currently Chinese agricultural cooperatives lack financing, technology and management as well as services, and their quality and efficiency need to be improved, Yin said, suggesting to learn from the practices of Netherlands' cooperatives.
The Netherlands boasts high-quality dairy products despite its limited natural resources. Its dairy sector boom is attributed to its unique cooperative model between farmers and firms, according to Atze Schaap, Director Dairy Development China at Royal FrieslandCampina, a Dutch dairy company.
Under the cooperative model, farmers and dairy firms share risks and profits throughout the industrial chain. Farmers are obliged to ensure high-quality milk and firms have to buy it all at a fixed price according to the contract, and share dividends with the farmers if they make profits.
"This model gives farmers a higher share of the value added, improving their bargaining power and reducing market risks, meanwhile it guarantees quality, safety and sustainability," Schaap said.
China has an annual growth rate of about 6 percent for dairy product consumption while production expansion lagged behind to be around just 2 percent, said Bi Yu'an, a senior official with China Food and Drug Administration.
The demand-supply gap for safe and high-quality dairy products has widened because of the lack of incentives for dairy farmers and loose cooperation between firms and them, Bi added.
Chinese consumers prefer foreign dairy brands due to a lack of confidence in domestic products. This is a hangover from a trust crisis in 2008 when a dairy firm was found to have added cancer-causing melamine in baby formula.
Zheng Xinli, vice executive secretary with China Center for International Economic Exchanges, a leading Chinese think tank, believes one key problem compromising the country's food safety is the lack of a share-holder mechanism to drive farmers to ensure food quality.
"Firms and farmers should work together for mutual benefits, and cooperatives can pave the way for developing reassuring made-in-China products," Zheng added.
