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Electronic Auction House Benefits Chinese Farmers
A new computerized auction house is revolutionizing the way vegetable farmers in China's Shouguang City sell their produce.

The electronic auction debuted in east China's Shandong Province on Tuesday, at the Shouguang Vegetable Wholesale Market.

The whole system is computerized and fully automated, and purchasers can enter bids on computer screens while vegetable samples pass on a conveyer belt.

Sellers can clinch the deal at the touch of a button if satisfied with an offer.

Local farmer Wang Jicheng said he was delighted by the auction, the first of its kind in the country, because he no longer needs to ship his produce to the market by himself.

Now a local farming service group which acts as farmers' representative at the auction arranges the vegetable shipping.

Wang said that he got a good price in the auction for his peppers, which sold for 3.4 yuan (US$0.4 US) per kilogram, 60 fen (7 US cents) higher than before. He made 2,000 yuan (US$240 US) more than he had previously from his half hectare pepper greenhouse.

Middlemen used to grab the most profit formerly, he said.

In China, vegetable produce accounts for some 40 percent of the world's entire supply but vegetable dealing was still carried out in the traditional way of face-to-face bargaining.

Yang Dongxu, an official with the wholesale market and board chairman of the Greenstuff Industry Group in Shouguang, said that traditionally vegetable sales went through at least three stages. Produce finally reached a buyer after passing through the hands of a farmer, to a wholesaler in the producing area, to a wholesaler in a selling area and finally a retailer.

At each step of the process the lowest possible price was offered, Yang said, and the expense in the complicated distribution process was usually shared by farmers and consumers, so both farmers and buyers would complain.

"In the past, we had nothing to do but complain when we felt the situation in the bargain was usually controlled by middlemen," Wang said. "But now the local farming service group will help arrange for the electronic auction. The auction also cuts short the distribution process, which means we farmers will share less cost in the process."

Wang said now he could concentrate on farming work and was no longer bothered by shipping and bargaining.

Wholesale purchasers also benefited from the electronic auction.   

Cui Jindong, a vegetable wholesaler from northeast China's Heilongjiang Province, said that traditional dealing methods could no longer meet the demand in modern times.

"It always wasted a lot of time when we had to bargain with farmers one by one. The slow bargaining process would inevitably affect the freshness of the goods, which would in turn affect the price when we sold them. However, all we have to do at an electronic auction is to press some keys."

Cui said he clinched a deal at Tuesday's auction in just two minutes.

Market official Yang Dongxu described the electronic auction in Shouguang as China's first step towards modern methods of farm produce dealing.

Though the electronic auction of farm products was still at a fledgling stage in China, it was an irreversible trend.

"We have to face competition from the outside world," he said.

He Qiwei, an expert with a provincial agricultural consulting service in Shandong, said that the electronic auction could also help develop a tracing system for farm produce.

Zheng Wenhui, a manager of a supermarket in Beijing, said that when a quality problem such as pesticide residue was found in vegetables it was difficult or even impossible to find the person responsible, as there were so many participants involved in the process.

"But now a wholesaler at such an auction usually has a fixed number of farmers who provide him vegetables."

"Checks on pesticide residue are usually made prior to an auction, so it is quite easy now to trace where liability lies."

He Qiwei said that the tracing system would inspire Chinese farmers to shift to organic or poison-free farming, which would help sharpen their competitive edge in the world market.

(Xinhua News Agency May 28, 2003)

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