Workers tend to vegetables in Yimutian, a 47-hectare farmland located in Chongming island, Shanghai. The farm provides 77 different vegetables to customers. Shi Yingying / China Daily

Farmers cut out middlemen with direct sales

Jiang Lili hardly goes to supermarkets these days to purchase her vegetables.

The 42-year-old housewife from Shanghai instead gets her supply of organic carrots, tomatoes and lettuce delivered to her house on Monday, Wednesday and Friday at 7 am from a nearby farm.

With food safety slowly becoming an important concern for Chinese citizens, many like Jiang are embracing organic products as they blend healthful eating with convenience.

That in turn has opened up new vistas for organic farmers who had earlier seen their profits crimped by middlemen like big supermarkets. Most of them have set independent supply chains to directly reach out to customers.

"I don't have to waste time in the long lines at the supermarket for my daily vegetables," says Jiang, who became a member of an organic farm called Yimutian six months ago.

"Now I know who's growing my vegetables and who's delivering them, unlike those available from the market. I feel like I have this little farm in Chongming (where Yimutian's farm located) that I can trust."

Urban organic vegetable farms cut out the middlemen and sell their produce directly to the consumers through a digitized system that helps buyers track their food products till delivery.

Set up in March 2009, Yimutian currently provides 77 different kinds of vegetables to 20,000 families and 3,000 members in downtown Shanghai from its 47-hectare farmland in Chongming.

The farm, however, has one unwritten rule. It accepts orders only till 12 pm to guarantee the freshness of the vegetables.

"We will not have enough time to pick the vegetables if the orders are received late," says Zhang Huan, chief executive officer (CEO) of YMT Organic Farm Co Ltd.

"Customers are able to get the vegetables by early morning as most of the vegetable picking is done during the afternoon between 2 to 4 pm. We pack the vegetables from 3 to 7 pm and complete the logistics procedures from 8 to 10 pm. We conduct the home deliveries between 11 pm to 7 am," Zhang says.

According to Yimutian's logistics schedule, every package of vegetable is harvested a day before it is served on the dining table.

Some housewives like Yang Ying had tried Yimutian's vegetable on a few occasions, but were not too sure about committing themselves. Last fall, Yang decided to take a trip to see the farm and its activities.

"I went to the farm and found they (the farmers) were picking my orders," says the 39-year-old Yang. "That was when I decided to become a member of Yimutian."

With an 11-year-old boy in her family, Yang says she has to pay extra attention to food safety.

"I have noticed in the vegetable market, especially during the summer months, that vendors soak the vegetables with unclean water to make the produce look fresh," Yang says.

"Since it passes through several hands before it reaches me, how am I supposed to know that the vegetables in my basket are safe to eat?" she asked.

In Yimutian, the problem is solved with the help of an electronic bar code attached to the vegetable packets. Consumers can check online to find out the entire production process information, including the date of picking, location of the farmland and the person responsible for picking and deliveries.

"Consumers have the right to know what happened to their vegetables before they are cooked," Zhang says. "In the past, consumers could not contact vegetable producers directly as there were many middlemen involved in the process. In the organic farm, however, things are much more transparent."

By skipping the middlemen like supermarkets and vegetable marts, the organic farms can also offer their products at relatively cheaper prices.

Farm owners like Zhang have another take on why they decided to give up the settled platform and approach customers directly.

"I don't trust these supermarkets," Zhang says. "They (supermarkets) just manage you in the way they want. If they are willing to sign a contract with me on the standards necessary for stocking the vegetables, I am willing to work with them. But at the moment, I can't find any."

Interestingly enough, City Shop's CEO Cui Yixiong says his supermarket chose to grow its own organic vegetable eight years back as they could not find trustworthy suppliers.

"We have farmlands in Jiading and Minghang spread over 15 hectares for growing organic vegetables," Cui says. "We have so far not been able to find a creditable supplier."

City Shop offers eight kinds of organic leafy green vegetables, but at prices higher than that of Yimutian.

However, both Yimutian and City Shop have higher price tags for organic vegetables and are struggling to stay in the black.

Typically, housewives like Yang and Jiang spend about 700 yuan every month on organic vegetables.

"We are not targeting rich or expatriate clients, but normal families who can spend at least 400 yuan every month and are keen to invest on their health and life quality," Zhang says.

"Families that drink water from dispensers are also our potential customers."

To promote their cause, Yimutian has so far given out free organic vegetable samples worth more than 2 million yuan (228,000 euros). "We are going to keep doing this," Zhang says.

"We have a cultivable area of about 47 hectares. But only one-seventh of this is enough for our current customers."

"Organic vegetable are twice as expensive as normal ones and we can hardly make any money out of it. It just doesn't work in the way that you harvest whatever you grow," Cui says.

"We had a problem with the organic potatoes we offered last March as they were pitted with holes due to insect attacks. We could not get rid of it as we used the organic method of cultivation. The customers did not even look at the product."

Yields from organic farms are 30 percent less than normal farmlands as they do not use chemical fertilizers and are subject to natural calamities. More than 50 percent of the investment is used for work that is done by the hand.

Organic products currently account for less than 1 percent of the total retail sales of farm produce in Shanghai, compared with 8 to 10 percent in Hong Kong and Taiwan. But farms like Yimutian are slowly driving home the point that it pays to invest in one's health.