While approaching the end of
2012, Government purchasing has again become a hot topic at many agricultural
means of production conferences. Many pesticide enterprises, especially those
missing the government purchasing this year, expressed that they will continue
to lay great efforts to prepare for the government purchasing battle in 2013,
according to CCM’s
November issue of Crop
Protection China News.
Since the Ministry of Agriculture
of China (MOA) released the agricultural subsidy policy on 6 April, 2012,
USD254.37 million (RMB1.6 billion) of subsidy has been allocated to 11 winter
wheat planting provinces and areas in China to subsidize farmers' use of
pesticides and foliar-fertilizers on winter wheat, with total planting area
reaching 21.33 million ha. Adding up the subsidies allocated on rice,
vegetable, tobacco, cotton, etc., the whole government purchasing capital of
agricultural means of production in 2012 is estimated to reach USD317.97
million (RMB2 billion).
Government purchasing is now
called as a double-edged sword because it brings both advantages and
disadvantages to domestic agricultural means of production industries. As the
capital of government purchasing gradually grows in recent years, more and more
domestic enterprises are attracted to scramble for the bid inviting of local
governments and those enterprises who win the bid enjoy good profit. Take
Jiangsu Anpon Electrochemical Co., Ltd. (Jiangsu Anpon), a typical enterprise
in domestic government purchasing of agricultural means of production for
example, it won the bid of 300 tonnes of pymetrozine in the government
purchasing of Jiangxi
Province Jiangsu
Province
The government purchasing not
only benefits the performances of the enterprises who win the bid, but also
promotes their products for free. Owing to domestic chaotic pesticide market,
domestic farmers with low educational level usually can't tell counterfeit
agricultural means of productions from good quality ones. When the government
purchases agricultural means of productions for them, they believe that these
products from government purchasing are reliable and show great loyalty to the
brands of the products when they buy them by themselves.
Moreover, government purchasing
not only helps farmers to save a considerable spending on agricultural means of
production, but also ensures farmers to use the right pesticides and
fertilizers which are the main cores of Chinese Central Government to carry out
the policy of government purchasing.
However, except for those
enterprises who enjoy benefit from government purchasing, others and those
traditional dealers of agricultural means of production, on the other sides,
complaint that government purchasing is unfair to some extent and has affected
greatly the traditional sales channels of agricultural means of production.
Owing to the cumbersome
procedures of the bid inviting, lots of pesticide enterprises lack experiences
of preparing bidding materials. As many pesticide enterprises located in
different provinces need to travel to other provinces for the bid inviting,
they are forced to give up when they find that it is impossible to fetch the
materials needed in a short time. In addition to the cumbersome procedures and
lots of bid materials needed, the high threshold of the enterprise's registered
capital set by local governments is also a big pressure to the pesticide
enterprises who want to gain the bid inviting, especially those medium and
small sized ones. Some provinces which invite public bidding by provincial
authorities only allow large and famous pesticide enterprises to participate
in.
Traditional pesticide dealers
feel great pressure in government purchasing activities as well. As those
government purchased products are distributed to farmers for free, the sales
channels of pesticide dealers continue to shrink. Moreover, some of these
products will not be used in the right year due to different planting
conditions and outbreak conditions of pest and diseases but will be used next
year, thus affecting the sales of pesticide dealers.
Although many enterprises
complaint about the unfair rules in local government purchasing, they still
believe that it represents the third kind of sales channel in domestic
agricultural means of production industry. The only way to get involved in the
activity is no other than better preparing and actively participating.
Source: Crop Protection China
Content
of Crop Protection China News 1222：
Nantong Jiangshan to acquire Thai agrochemical enterprise
Ningbo Tide achieves remarkable performance in international market
Anhui Guangxin tries IPO again
Government purchasing: a double-edged sword
Lier Chemical shuts down chlorpyrifos production lines
Gofar Bio-Pesticide's production halts
Huilong sets foot in micro-credit industry to promote its development
Crop Protection China News, a monthly
publication issued by CCM on 15th&31th of every month, offers timely update and
close follow-up of China
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CCM
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market research in China
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