Ho Ai Li – Straits Times Indonesia
Beijing. In Hot Spring Village in Beijing’s north-west, farmers are leaving rows of leafy green vegetables to rot in the fields.
They see no point in harvesting them for the market. Their wholesale prices have plunged nearly 90 percent, to 30 fen (50 cents) a kilogram.
A farmer who gave his name only as Wang said: “Those you cai [oily vegetables] over there, we are not collecting any. We can’t recover costs, so we dump them. Anyone who wants them can help himself.”
It is even worse in eastern Shandong province, one of China’s key agricultural producers. There, dealers are throwing cabbages into drains.
While the prices of vegetables usually fall in warm seasons when the supply goes up, the situation this year has been made worse by the unusually warm weather and fears of radiation from the crippled nuclear plants in neighboring Japan.
So much so that local governments took urgent action this week to get supermarkets, schools and companies to go green, in a manner of speaking, by buying as much of the vegetables as they can.
The prices of 18 staple vegetables, such as green peppers and lettuce, dropped an average of 16.2 percent in the three weeks before April 17, said the Ministry of Commerce last week.
The price decrease comes at a time when inflation is still a huge concern for Beijing, which has to strike a balance between ensuring stable food prices and protecting the farmers.
Ironically, a bumper crop does not always benefit farmers.
This year’s relatively warm weather has hastened the harvests of vegetables in north China, coinciding with the marketing of crops from the south.
This has led to an unusually large supply of green produce in the country, causing the free-fall in vegetable wholesale prices.
Miscalculations are also to blame. For instance, some farmers grew more cabbages after prices went up last year, helped by exports to South Korea, which did not have enough cabbages for kimchi.
Declining demand is also a problem. Vegetable hawkers say fewer consumers are buying leafy vegetables, fearing that the big leaves — which mean bigger surface area exposed to air — will expose them to greater risk of radiation contamination from Japan.
“It’s all because of the big earthquake,” said hawker Shi Haiyan, 38, who blamed the slow sales on radiation fears.
The price collapse has left many farmers despondent. One Shandong farmer Han Jin killed himself on April 16 after the value of his crops plummeted.
One would expect consumers to gain from the cheaper prices, but many say they have not.
At a fruit-and-vegetable retail market near Beijing’s Drum Tower, physician Wang Jian, 48, said he still spends roughly the same amount on vegetables and fruits. “Food costs have gone up because of inflation,” he said. “The drop in the prices of some vegetables is a very small percentage of overall spending on food.”
He is right. Last month, China’s consumer price index went up by 5.4 percent year-on- year, the steepest rise in nearly three years. Food prices rose 11 percent.
Savings from lower wholesale prices rarely get passed on to consumers.
By the time vegetables reach people’s grocery baskets, prices can be as much as 10 times the amount paid to farmers.
While farmers received just 20 fen per kg for cabbages, consumers paid an average of 1.79 yuan per kg for them in 50 cities tracked by the National Bureau of Statistics from April 11 to April 20.
This is a result of costs in areas like logistics, manpower, packing, distribution and rental. Recent hikes in fuel prices have also increased costs.
Researcher Li Guoxiang, from the Rural Development Institute of the Chinese Academy of Social Sciences, told the China Daily newspaper that government curbs on vegetable retail prices have also pushed down wholesale prices.
Farmers also have little power individually to negotiate prices with distributors.
Some have resorted to peddling produce on their own, often doing so illegally outside housing districts in the city.
Said a farmer selling vegetables by the road who declined to give his name: “The authorities should let farmers have a place to sell vegetables and residents have a place to buy them.”
Rentals in markets, which can cost 1,000 yuan or more a month, were out of his reach, he complained.
Wang from Hot Spring Village is resigned to making a loss. “What solution can we come up with? We just have to wait for the state’s policy.”
Reprinted courtesy of Straits Times Indonesia. To subscribe to Straits Times Indonesia and/or the Jakarta Globe call 2553 5055.