How livestreaming, online sales are helping China’s farmers build trust with consumers

How livestreaming, online sales are helping China’s farmers build trust with consumers

Staff Writer
Staff Writer
Pinduoduo Content Team
May 12, 2020
  • China emerging as global leader in developing sustainable food systems
  • Farmers of organic crops still face “critical challenge” of building consumer trust

Pinduoduo (PDD), China’s largest online platform for agricultural sales, has pioneered the livestreaming of farming communities in China to its almost 600 million users to demystify how food is produced. Through the use of e-commerce and a team purchase model, PDD has cut out many middlemen and layers of distribution costs, ensuring lower prices for consumers and higher prices for farmers.

In this episode of PDD Podcasts, podcast host Kavita Chandran Budhraja speaks to experts in Waterloo University, Canada, about China’s organic farming capabilities and sustainable initiatives, based on research they conducted across 13 different Chinese provinces.

Interview with Steffanie Scott, Prof of Geography and Environment Management, and co-author of the book, Organic food and farming in China, and Zhenzhong Si, research associate and researcher on China’s emerging ecological food sector, urban food security and COVID-19 impacts in China. Below are edited excerpts from the interview.

KCB: To start off, what is it that the world should know about China’s organic farming capabilities?

Steffanie: Well, what we’ve been observing in our field work, and in this research that we’ve been doing over the last decade, is that China appears to be emerging as a global leader in developing sustainable food systems. There’s a lot of different kinds of state support, and we also looked at the role of farmers and community organizations and other people supporting from the grassroots to help the sector develop. Especially for me, living in Canada and kind of observing the organic sector in North America and more broadly around the world, it does seem really striking — the range of policy support that China has for sustainable agriculture, and then specifically for the organic and so-called green food certified sectors. For people who are familiar with China it’s not really a surprise, but what’s different from what some other countries have been going through in terms of developing this sector is that China has, for a couple of decades now, a whole series of food safety crises that has really been a driving force for consumers to be seeking out for healthy and safer foods. So, those are two important factors, I think, that have been shaping this sector. The smaller scale producers are largely unable to get certified, but they’re still connecting and selling their food as uncertified organic and there’s plenty of consumers that are keen to connect with them and buy that food and develop sort of trust with those farmers. So, again, there’s a range of different pieces that’re very, very, interesting.

An organic farm in China.

KCB: Are sustainable agricultural practices and organic food production increasing in China? If so, why?

Zhenzhong: I think the total area of certified organic agriculture cultivation increased more than fivefold between 2005 and 2018, that’s the most recent updates we have in relation to the total area of farming of organic agriculture. I also want to say that, in addition to Steffanie’s points, there’s the growing demand driven by the interest in safe and high quality food in China in the past decade or so because of the food safety crisis. China’s agriculture sector has also been at the critical stage of ecological transformation. After several decades of agriculture modernization and the rapid growth of the organic sector, and also the non-certified ecological agriculture sector, it is also driven by the government’s goal to reduce the pollution from the agriculture sector. So agricultural pollution reduction has been one of the top priorities in recent years. Developing sustainable agriculture, including organic and green food production, in the Chinese context is a critical strategy for the state to reduce agricultural pollution. I don’t know if you’ve heard of this policy called “1 Control 2 Reductions and 3 Basics policy” proposed by the then Ministry of Agriculture, now the Ministry of Agriculture and Rural Affairs, in 2015. It has been the priority and also the objective of China’s agricultural pollution reduction campaign. So, these policies focus on controlling the total water usage of agriculture and also reducing the usage of agro-chemicals, including synthetic fertilizers and pesticides, and also the recycling and treatment of livestock and crop stocks. So, this policy has been the priority of the Chinese government. And in order to really put this policy down to the ground and also make big changes in agricultural sector, the government has been, you know, investing a lot in supporting the development of the sustainable agriculture sector. And that’s also a major reason that we’ve seen the rapid growth of this sector in the past 10 years.

KCB: You’ve used the phrase “Top-down Bottom-up efforts” when referring to China’s farming initiatives. Please explain.

Steffanie: China has its own National Organic standard that was developed in 2005 and revised in 2012, and then in the early 90s and late 90s it developed standards for green food and for hazard-free foods. The state development of those standards is one important aspect of developing that sector. Also, there’s a whole series of other kinds of supports that we’ve seen — like providing or facilitating land access. So, sometimes helping small farmers to build agreement for them to lease out larger areas of land to investors — that’s another aspect of the “top-down efforts”. There are all kinds of training programs and help assistance with marketing, sometimes even a regional plan, like there’s a couple of places in Jiangsu province where there’s a whole county that’s designated as an organic county. So again, they set quite substantial supports and a range of other financial and technical kind of supports. And then also the “bottom-up efforts”, we look at various ecological farmers markets, like Beijing has one that’s been fairly successful over the last nine years. There are Food Buying clubs that are organized by households that are seeking to connect with farms in different places and seeking out good quality food that they trust. There are CSA farms — Community Supported Agriculture farms — where people can buy directly from farmers and get weekly deliveries. And then there’s like recreational or rental gardening, which is another way of people to connect directly with opportunities to grow food. So, I think those are other aspects that kind of reinforces and complements in different ways the state’s efforts to help build that sector.

KCB: What does your research reveal about the rural reconstruction movement in China?

Zhenzhong: Regarding “bottom-up initiatives”, what we found in our field work is that many of these ecological farmers are what we call ‘new farmers’ because they are different from traditional farmers as they are well educated farming people with urban background, and are also getting involved in farming as entrepreneurs. A lot of these people have connections with the Rural Development Initiative, which is a national network of academics, new farmers and social organizations, to promote different ways of rural developments by supporting the ecological food productions as well as farmers’ cooperatives. They also support migrant workers living in cities. So, this rural development initiative or network is known as rural construction network, and are an important part of our study when it comes to “bottom-up efforts” in China.

KCB: How have things changed post COVID-19 in China when it comes to farming sector and sustainable produce?

Steffanie: So what we’ve heard over the last few months, especially through the lockdown, was interestingly that a lot of CSA farms that tend to sell directly to customers were seeing skyrocketing sales. People were seeing it as a safe option as it wasn’t being handled by too many people, it was a short food supply chain, and they were able to arrange delivery despite the constraints. That was an encouraging and rising opportunity for those in smaller scale organic farms. The second factor was the rise of online sales, whether it’s from CSA super supermarkets, the rise of online sales has been huge. And finally, the importance of the local food system. I think all over the world, people are reflecting on this more and more. For example, in North America, we’ve heard a lot about a growing trend of people wanting to grow their own food in their backyard or indoors, wherever they can. Our study has really highlighted the importance of balancing — not being over reliant on imports, and being able to have a strong kind of domestic and local food system to supply people particularly in times of tumultuous economic crisis.

KCB: Your report mentions that $65 billion worth of agri food commodities are exported from China each year, and that total organic sales in China ranked fourth in 2017 behind the United States, Germany and France. Is that still the case?

Steffanie: So those are the latest statistics that we were able to get our hands on, and we don’t have reason to believe that it’s shifted a lot to our knowledge at this point.

Zhenzhong: I have some numbers in relation to the sector of organic agriculture in China. So, the domestic sale increased by 4% from 2017 to 2018, and the total value of organic food exportation in 2018 increased by 2 million tonnes compared to 2017, and China has been ranking the fourth at least since 2016 in terms of the total organic sales. The total sales also has experienced an increase of about 400 million US dollars in 2018. So it’s a rapidly growing sector and it’s not only driven by exportation but also increasingly by growing domestic demand.

Selling tea via livestreaming on Pinduoduo.

KCB: What about certifications and trust when it comes to regulations around farmers to ensure the produce is organic and reaches the right market? What are the challenges?

Steffanie: Small scale farmers in China are largely unable to get this organic certification, partly it’s prohibitively expensive. I’m not sure why, but the proportional difference between Canada for a small scale farmer versus a large scale farmer to get certified, there’s a lot bigger difference, and in China, even for small scale farmers it’s just very expensive. And then there’s all the hassle of the paperwork and documentation that needs to go with it which requires a lot of training for people to figure out if they haven’t done it before. So that’s unfortunate. Still, a lot of them seem to be able to find to find markets. But there’s probably a lot more potential for other small scale farmers to tap into that and to be able to sell their goods, their quality food, at a premium price if they could find out a way to either reduce or subsidize the cost of certification more, or to do something like a group certification which happens in some other countries. That’s one factor I think that limits the expansion of this sector. Another one is that traditional farmers have tremendous knowledge about traditional farming practices and how the agro-ecology works, but their knowledge is really overlooked by researchers, by state planners and by society overall. I think there’s potential to sort of try to encompass and give opportunities for their knowledge to be valued and for their food to be valued. Those farmers are unable to earn price premiums even though they’re growing without chemicals. Another difference that we see from most other countries compared to China is the lack of organic sector support organizations which play a key role in networking farmers and also giving a voice for them to advocate to government. Despite all the support from government, they’re disproportionately targeted to larger scale farms, and so it that support is really skewed. I think a diversity of farm scale and style of farming is really important as well. And finally, there’s a real skepticism about organic farming having low productivity.

Zhenzhong: I want to say that trust is a key issue, and also the key to success for organic farms. A lot of the organic farms that we interviewed said they could sell only some, not all, of their produce at a premium as organic food. That’s one of the reasons that the price of organic food is so much higher compared to conventional food. It is because of the issue of trust as they couldn’t find customers who really trust their practices as many people are most skeptical about their way of farming and because of the lack of communication, and social environment in China. So I think the issue of trust is one of the critical challenges farmers are facing when it comes to growing organic crops. One of the examples to rebuild the trust is through alternative food initiatives that connect consumers with producers. One way, as Steffanie just mentioned, is community supported agriculture and it has been rapidly developing in major Chinese cities. There are 500 Community Supported Agriculture farms in China now, when there were none in 2011. I believe live streaming and selling food online is also another approach to bring consumers and producers closer, and also to provide more information of the food.

KCB: If there was one positive solution that could come from the world to help China’s sustainable agricultural practices, what do you think that would be?

Steffanie: Well, I think one point that we have really been pushing hard is the recognition of the value of small scale diverse farms because the Chinese government has been pushing more towards a large scale, high tech version of organic and ecological agriculture and the robotization as well as fancy smart greenhouses and everything else.

Zhenzhong: I want to emphasize the importance of supporting organizations for the development of the sector. One of the critical challenge is a lack of support for farmers as they do not have access to the technology or the information about the market. The social organizations could play an essential role to provide more support to these farmer.

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