China’s problems in the food bank business 07-12-2017

China’s food banks are developing rapidly. However, this emerging new sector is still facing several problems, which need to be solved in order to enable a smooth and valuable service for the industry.


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China’s food banks are engaged in providing services for agriculture, rural areas, and farmers and storing food, by favourable price, quality products and chain-store operation with the goal to improve risk response ability in agricultural production.  

Along with the continuous development of food trade in China, food banks are getting more popular in the country. Particularly, in the domestic corn industry, food banks become crucial to provide services for the temporary storage system. The banks provide free storage service for farmers, which can effectively solve the problems in daily food storage such as land occupation.  

According to market intelligence firm CCM, the State Administration of Grain issued the Opinion of Actively Progressing the Healthy Development of Food Banks, which indicates that the country will focus on developing this business model in the near future to get it mature. By signing contracts, the banks will protect farmers' food ownership, and transfer the food operational right to enterprises. Farmers then can withdraw the food or discount them to present value as contracted. However, the development of food banks in China faces some problems.  

Problems of China’s food banks

The subjects of food banks are enterprises owned by the central government, state-owned enterprises and private companies with a reliable foundation. However, there are no uniform standards for the definition. Some non-grain enterprises also participate in this business, which results in greater risks for the participants.  

Furthermore, most Food banks in China are illegal currently. According to CCM, Chinese food banks are still "three-no-enterprises" which means that they have no capital, no plant, and no administrative structure. Although food banks develop rapidly, most are still illegal in China, which can lead to a shut down at any time.  

Besides, most domestic food banks are unable to attract quality grain resources due to capital shortage and poor storage capability. Of course, as an emerging business, they have a long way to go. Anyway, food banking is a promising development direction for some grain industries that are in the process of reform, and it may see explosive growth in the future.  

Also, some companies in China are worried about the shelf life of food donated, which may undermine the corporate image, or raise serious existence of concerns about food security. Companies hope to change that notion, put food donated to a food bank, to give people who are genuinely in need.  

The first food bank in China, the Green Food Bank, was established 2012 in Shanghai.  

China needs to develop its food banks and transform the industry to modern standards, in order to prevent any kind of food shortage in the near future. Owing to its fast-growing middle class, the country will likely account for half of the global increase in annual beef and poultry consumption and over three-quarters of the rise in fish consumption between now and 2030.  

Food banks, like the Green Changshou Community Food Bank in Shanghai, offer food for disadvantaged groups, like yoghurt, rice cakes, canned food and other snacks. This food can be picked up by the residents for free and is donated by local restaurants and supermarkets.  

About CCM

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets.  

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