Crossroads for farm exports
By Dai Yan (China Daily)
Updated: 2004-02-24 16:17

Chen Feng is at a loss.

The fisherman, 33, who has been in the shrimp business for a decade, is confused by the word "dumping."

"They told me it means we are selling the shrimp below the cost. Who would be so foolish? It is funny," Chen said, when he heard the news from the company which buys his shrimp.

The US International Trade Commission (ITC) on February 17 gave the go-ahead for an anti-dumping charge filed by the US Southern Shrimp Alliance on December 31 of last year, which is seeking tariffs of up to 264 per cent on Chinese imports. As captain of a mid-sized shrimping vessel in the city of Zhoushan, an island city in East China's Zhejiang Province, Chen and his 10 colleagues harvest 12 tons worth of shrimp every year.

"We sell the shrimp to a processing factory at 10 yuan (US$1.21) per jin (half-kilogram)," Chen said.

The income is enough for Chen to support his family, as his wife is a housewife and his son is in primary school. Still not understanding the word dumping, Chen began to worry about it.

Farmers work in a greenhouse in Ningbo, Zhejiang Province. The city is an export base for vegetables. [newsphoto]

"The company told me they would collect less if they cannot continue to export," Chen said.

The anxious and confused Chen is just one of 80,000 shrimp fishermen in Zhejiang Province.

Their 8,000 shrimping boats will lie idle ashore if the United States rules the Chinese industry is dumping. Their shrimp exports to the European Union have also been stopped because of its bar on products of animal origin from China.

Even more knowledgeable than Chen, Fan Guofeng, boss of the Zhoushan-based Xifeng Aquatic Products Co Ltd, who is collecting shrimp from Chen, said he cannot understand why they were being accused of dumping.

The company, owned by Fan, processes the collected shrimp into frozen shelled shrimp.

"In the United States, our products are sold at a price at least six times the collecting price we offer to Chen," he said.

But Zhang Zhibiao, deputy secretary-general of the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-Products (CFNA), will never fuss over the word.

"I'm used to it," said Zhang, who has handled anti-dumping charges involving various types of Chinese farm produce in the past four years, including honey, crayfish, garlic, apple juice concentrate and canned mushroom.

Besides dumping, technical barriers are another word Zhang always has to face.

"You can recall the same sort of period in 2002, when it seemed hard for Chinese people to find the right things to eat," Zhang said.

Chinese vegetables were barred from being exported to Japan for what it claimed to be containing too much pesticide. Also, Chinese aquatic products such as eels as well as livestock exports to the EU and Japan suffered owing to quality concerns, Zhang said.

But finally, people calmed down and decided to buy what they had always bought in the past, he said.

China's farm produce exports stood at US$21.43 billion last year, up 18.1 per cent year-on-year; imports were US$18.93 billion, soaring by 52.1 per cent.

The results would have been better if exporters had not faced so many obstacles, Zhang said.

A report from the Ministry of Commerce concluded that 90 per cent of the country's exported farm produce and foods encountered technical barriers last year, with losses of US$9 billion.

The outlook for this year is also not good, Zhang said, as technical standards are becoming tougher and their scopes are widening.

Japan is going to implement its revised Seed and Seedlings Law in April this year.

The revised law extends the scope of punishable offences to include not only the handling of seeds or seedlings without the breeder's permission but also the sale of crops grown from such seeds or seedlings, according to Zhang.

It will be a fresh move to bar farm produce imports, since it is time-consuming to argue over the origin of seeds and seedlings, Zhang said.

The law is also tough on the infringement of breeder's rights by companies, raising the maximum fine that can be imposed on a company from 3 million yen (US$28,500) to 100 million yen (US$950,000).

The ban on pesticide imports by European Union will also deal another blow to Chinese exports, Zhang said.

EU has announced formally to forbid the use of 320 kinds of agricultural chemicals in its region this year, which will affect the exporting of more than 60 types of agricultural chemicals made in China.

But a worse effect from the regulation is the prevention of the country's farm products from entering EU markets, Zhang said.

The banned chemicals are widely used in growing farm produce around China, such as apples, oranges, tomatoes, cucumbers and grains.

US anti-terrorism policies, which make customs procedures more complicated, are also causing slowdowns for exports, Zhang believed.

In order to be fully prepared for bio-terrorism, the US Food and Drug Administration required all foreign companies that make, process, pack or warehouse food for export to register with the FDA before December 12 of last year.

These companies will also be required to notify the FDA by noon the day before their goods arrive at the US border, which definitely has a great impact on food trade, Zhang said. "More countries will follow suit and Chinese farm produce will be surrounded by barriers."

But Cheng Guoqiang, an agricultural expert from the Development and Research Centre under the State Council, said the Chinese side does have things to improve when complaining about strict standards.

For example, some farmers favour the use of pesticides, and some companies are not thorough in their food processing practices.

But Cheng said they are learning from all of these lessons and are moving in the right direction.

The government has also lagged behind in setting up a comprehensive system of food safety inspections and national standards.

"They are especially absent in making laws and rules to protect domestic industries," Cheng said.

He took Japan's Seed and Seedling Law as an example, which does not exist in China. Japan pays considerable attention to the issue, and sets up a system to register their seeds and seedlings as intellectual property rights.

To protect the breeders, they even planned to install DNA analyzers at the customs, Cheng said.

However, when making these improvements, Cheng suggested the government will have to take a hard line when facing unreasonable technical standards.

China should set up a comprehensive network of technical standards for farm produce imports, Cheng proposed. Sometimes foreign countries are just looking for excuses involving technical standards to block Chinese imports, he added.

"If China also has a strict system, they will be more prudent in their actions and study the possible Chinese retaliation carefully," Cheng said.

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