China's ongoing official austerity campaign has hit some producers of organic goods, after government departments and State-owned enterprises cut orders for expensive produce.

The glut of organic products, including fruits and vegetables, has forced some farmers to explore market channels in Hong Kong and inland cities, such as the southwestern municipality of Chongqing, said Xin Wendong, director of the Agriculture.

Forestry and Water Resources Authority in the Xiashan Ecological and Economic Development Zone in Weifang, Shandong province.

"The gift market used to account for a huge number of orders from farmers. Some orders also came from enterprises and government department who purchased organic produce as staff benefits," he said. "But now that's no longer the case."

However, he isn't lamenting the loss of the gift market channel for farmers. "It wasn't sustainable. Demand in supermarkets has been relatively slow to develop, but it will benefit the industry in the long run," he said.

Xiashan is home to 26 agricultural parks that produce organic products, and has 4,700 hectares that have been certified, or are awaiting certification, to produce organic agricultural products.

Distributors have also felt the icy wind of the anti-graft campaign. A market manager with Beijing Dingsheng Haoyun Trade Co, who declined to be named, said the market for organic produce has been sluggish this year.

"Farmers are no longer willing to put their products in the gift market because of sluggish sales. That's why the prices of these products are rising," he said.

Zhang Ke, manager of Xinbeihai Modern Agriculture Co, an organic vegetable producer in Weifang, said he sees the anti-graft campaign as an opportunity to diversify market channels. Zhang's company has developed a membership system whereby households pay about 3,600 yuan ($588) per annum to have 2 kilos of various organic vegetables delivered to their door every week.

"Indeed, the government departments and State-owned enterprises have been cutting their orders. But that has enabled us to sell our products to individual households," he said.

By Xu Wei ( China Daily )