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Agriculture: Eyeing a bumper harvest in China

By Fu Jing (China Daily)
Updated: 2009-02-16 07:56

David Liu (second from right), country director of Pioneer China, DuPont China Holding Co Ltd, discusses how to improve agricultural productivity by planting hybrid corn seeds with farmers in Jilin province. Company photo

Who would be so bold as to predict their business could grow by as much as 40 percent in these days of slump and recession?

One of the brave few is Paul Schinkler, president of US-based Pioneer Hi-Bred. He said he hopes that China's massive agricultural sector will help him to harvest healthy returns this year, with the nation's farmers snapping up his company's hybrid corn seeds.

Pioneer Hi-Bred, a DuPont subsidiary providing solutions for farmers, livestock producers and grain and oilseed processors in nearly 70 countries, has already enjoyed rapid growth in the world's most populous nation.

Based on this past progress, Schinkler expects his firm's seed sales to grow by at least 40 percent in China this year.

Pioneer Hi-Bred has embraced the huge market opportunities offered as China attaches great importance to grain security by boosting yields on every plot of land.

"Within the next two years, our business in China will be equal to our size in Brazil in 2006," said Schickler. "And the fast expansion in China results from an effective market approach."

Although Pioneer Hi-Bred has been present in Brazil for over three decades, it first put down roots in China in 1997, setting up its first joint venture in 2002 and the second in 2007.

Along with the United States, Eastern Europe and Brazil and Argentina, China is one of the world's most ideally suited regions for farming.

Schinkler is unwilling to predict when his company's business will surpass that in Brazil, but pointed out that, while Brazil plants just 12 million hectares of corn, the crop acreage in China has already exceeded 27 million hectares.

Schickler expressed confidence about the firm's ability to compete with local or overseas seed firms in China, claiming that Pioneer Hi-Bred's "huge genetic base with resources worldwide can help" it take on any comers.

As vice-president and general manager of DuPont, Schickler suggested that the Chinese government should step up agricultural genetic resource exchanges with the rest of the world, as the nation has strengths in many areas such as rice and cotton.

Hybrid rice was one of the biggest successes. First developed in the early 1970s, it boosted the country's rice output by 400 million tons over the next quarter of a century. That is equal to the entire food output in a single average year in the 1980s.

Apart from its advantages in terms of research and development, Schickler said the secret of his firm's success lies in how it covers the "final mileage".

"Being together with farmers and sending our scientists and researchers to the fields is how we deliver plant genetics to farmers worldwide and in China, of course."

Since 2002, Pioneer Hi-Bred's joint ventures in China have already organized more than 10,000 seminars for Chinese corn farmers, helping them increase productivity and profitability, and develop sustainable agricultural systems.

"Our customer-by-customer and market-by-market approach is also unique compared with competitors," said Schickler, whose company was the first in the world to market hybrid seeds.

Timeline in China

Pioneer established a business representative office in Beijing in 1997. A year later, it started breeding and testing corn hybrids for commercialization in China for the summer and spring corn harvests.

In 2007, it established a joint venture with Gansu Dunhuang Seed Co, one of China's largest seed production firms, in the northwestern province. With total registered assets of $8 million, the venture is 49 percent owned by Pioneer and 51 owned by Dunhuang Seed.

China is the world's second-largest corn producer with 62.5 million acres planted, second to the US, with Gansu province responsible for over half the country's total corn yield. China is also home to half of the world's hogs, boosting demand for livestock feed.

Dunhuang Seed has 28 years of seed business experience and is one of the largest seed production companies in China. With 25 wholly owned subsidiaries and six joint ventures, its products are marketed throughout China.

This is the second joint venture established by Pioneer Hi-Bred, which set up a summer corn joint venture in Shandong in late 2002.

Growing market

China has the world's second largest seed market, behind only the US, according to the Ministry of Agriculture. And the country could become a global power in agricultural sciences by 2020 despite challenges such as climate change and resource shortages, Vice-Premier Hui Liangyu said recently.

"Only state-of-the-art scientific and technological progress will allow China to feed its growing population and ensure long-lasting grain security," he said.

Chinese agricultural scientists have played a vital role in raising the country's grain output to an estimated 500 million tons this year, from 300 million tons in 1978.

Meanwhile, scientists have cultivated 15,000 new crops over the past half-century.

But the agricultural sector faces challenges from environmental pollution, extreme weather and shortages of water, finance and labor in some regions. Arable land loss, the impact of climate change on agriculture, preventing plant and animal diseases, and food safety are also high on the government's check-list.

"China's agricultural success in the past and upcoming challenges have offered cooperation opportunities for my company, "because we have the best men in the industry," said Schickler.