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Japanese firms to start organic farm in China

With rich Chinese city dwellers discovering a taste for the finer food in life, a group of big Japanese companies plan to start a farming business there using organic methods, a spokesman said yesterday.

Asahi Breweries, Japan's top brewer, is to team up with trading company Itochu Corp and Sumitomo Chemical to lease 100 hectares of land in Shandong, one of China's "breadbasket" provinces on the east coast.

Vegetables and fruits such as lettuces, corn and strawberries will be grown under the guidance of Japanese agriculture experts.

Wind, solar power

The farm will also rear dairy cattle for milk and use manure for crop cultivation. Wind and solar power will also be employed as part of the environmentally friendly approach.

"With the improvement in Chinese living standards, particularly in cities, demand for better-tasting and safer food has been increasing," said Yasuhiro Nakahara, a spokesman for Asahi Breweries.

"We would like to propose a new business model to meet their demands. It would also be ideal if we could contribute to the improvement of Chinese agriculture, eventually," he said.

First of its kind

The new corporation aims to grow annual sales to ¥700 million to ¥800 million (US$6 million to US$6.9 million) within a few years once operations are up and running properly. It is believed to be the first operation of its kind by foreign firms in China.

The venture will start from April with funds of ¥1.5 billion (US$13 million), of which ¥1.1 billion will be provided by Asahi Breweries, ¥250 million by Sumitomo Chemical and ¥150 million by Itochu.

Asahi Breweries, which has already built alcoholic beverage alliances in China, expects to expand its presence in the country through the agriculture business.

China's government has signaled that rural development is now a top priority, reflecting official concern over the rapidly widening income gap between urban and rural Chinese.

The average city dweller now earns 3.22 times more than his rural counterpart, up from 2.57 times when reforms first began to take off in the late 1970s, a Chinese government official told a briefing in Beijing this week.
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