State Council announces reforms to stimulate seed industry

On 25 Dec. 2013, the State Council of the People's Republic of China issued an announcement on its portal, titled "Opinions on Deepening the Reform of Crop Seed System to Increase Innovation Capability" (the Opinions). The statement is expected to mature into specific guidelines for the future development of China's seed industry.

The Opinions emphasize the following aspects: allowing complete market determination in resource allocation; providing support to seed enterprises by introducing talented workforce, technology and resources; protecting the legitimate interests and rights of scientists over their inventions and creations; improving companies' innovation capabilities; and establishing a commercial breeding system.

Six measures proposed by the Opinions

To strengthen seed enterprises' leadership in technological innovation

Seed enterprises are encouraged to increase investments in R&D and establish joint-stock R&D institutes; scientific research institutes and institutions of higher learning (including universities and colleges) deemed of public interest shall be separated from seed enterprises established by them by the end of 2015, and other scientific research institutes shall be gradually transformed into enterprises (after reforms, the researchers' years of work in their original institutes shall be counted towards their pensions); new innovation platforms of seed industrial technology, such as national and provincial technical research centers, enterprise technical centers, and key laboratories, will be preferentially established in seed enterprises qualified for operating in the breeding, production and promotion fronts; among others.

To stimulate researchers' enthusiasm

Breeding materials, techniques, new varieties, and technological achievements in general developed by research centers and other institutions of public interest (including universities and colleges) with the use of national funds, are eligible to apply for intellectual property rights, and may be assigned monetary value and count as investment shares in seed enterprises; public trading platforms for technological achievements in the industry will be established; regulations for the transactions will be enacted, with private deals prohibited; cooperation between research institutes and enterprises is to receive full support; and researchers are encouraged to join enterprises and engage in commercial breeding; among others.

To intensify efforts to tackle problems in national crop breeding

Five-year plans for the breeding of major crops, such as rice, corn, rapeseed, soybean and vegetables will be designed. The aim is to improve the industry's scientific and technological innovation capabilities, by achieving core breakthroughs in key areas, such as germplasm, new varieties and the efficient propagation of seeds; the country shall help further companies' commercial breeding through various research programs and special projects, and attract social capital to participate in and emphatically foster seed enterprises that incorporate the three levels, breeding, production and promotion; research and breeding platforms shall be created, cooperation between enterprises and research institutes shall be closely established; and so on.

To improve basic and public interest research

Study fields related to the seed industry shall be strengthened; research centers and institutions of higher learning shall receive support to engage in basic and public interest research in areas such as breeding theory, general technology, and innovation of seeds, with the aim of developing modern molecular breeding technologies and methods, and creating new cultivars featuring high resistance, quality and yield; national research funds for these objectives shall be increased, while investments in the commercial breeding of hybrid rice, hybrid corn, hybrid rapeseed, hybrid cotton and vegetables conducted by research institutes and universities shall be gradually decreased; the preparation for and conduction of a national medium-to-long term plan for germplasm conservation and utilization of crops and forests shall be accelerated; and so on.

To accelerate the construction of seed production facilities

Policy support to major seed production facilities shall be increased and infrastructure for the construction of seed and seedling production facilities shall be laid down; a series of policies shall be implemented, such as insurance on seed production, subsidies on fine wood seeds and seedlings, and awards for major grain crop seed producing counties; the transfer of land-use rights to large seed producers and farmer cooperatives through land shares and land lease shall be promoted; among others.

The news sourced from Seed China News released by CCM in January.

Table of Contents of Seed China News 1401:

Key events in China's seed industry in 2013, part 1

State Council announces reforms to stimulate seed industry

Five changes in the Examination and Approval Measures for Main Crop

Origin reports profit growth in FY2013

Heilongjiang tomato seed market improving

Oversupply of hybrid rice seeds to continue in 2014

Terminal sales: new marketing trend for corn seeds

Beijing Shenzhou: space mutation breeding to boost agricultural development

Heilongjiang soybean market still depressed in 2013

Autumn planting of rapeseed in Anhui in 2013/2014

Seed China News, a monthly publication issued by CCM at the end of every month, mainly covers a diversity of topics, including market dynamic, company dynamic, crops, seed market, etc. With the latest news in seed industry and in-depth analysis on government direction and market competition, Seed China News can provide you with valid information which would help you make rational decisions in investment, production, marketing, etc.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and Consultancy Service. 

For more information, please visit http://www.cnchemicals.com.

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Pharmacy starts trial sales of infant formula

Historically, China’s pharmacies have not sold infant formula. This reflected a regulatory situation in which they needed a Pharmaceutical Trade License from the local Food and Drug Administrations, while retailers selling food required a Food Circulation Permit from local government. Few applied for both, especially as Chinese consumers were accustomed to buying infant formula from supermarkets. Recently, though, some pharmacies have started to sell infant formula in some cities, such as Guangzhou, Shanghai and Qingdao. However, there are still obstacles in the development of this channel.

 

A case in point is LBX Pharmacy, a well known national pharmacy chain, which held an event on 10 July to formally announce that it is focusing on promoting formula sales. The chain has established special counters for infant formula in 3 of its flagship stores in Guangzhou;10 brands of infant formula are sold, including Abbott, Wyeth, Biostime etc. Most of those stocked are multinational brands, but the company intends to introduce more domestic infant formula brands. In fact, LBX Pharmacy began to sell infant formula as long ago as 2009 in its flagship stores nationwide, although at that stage it sold only one brand –Biostime. Sales through pharmacies accounted for about 8% of Biostime’s total sales in 2012 and Biostime believe this channel will contribute significantly to its business in the future with more government promotion in this sector.

This trend is indeed promoted by government policy. According to Dairy Products China News issued by CCM in August, on 20 June, 9 ministries including the Ministry of Agriculture and the China Food and Drug Administration (CFDA) released Suggestions on Further Strengthening Infant Formula Safety and Quality. One of the measures requires trying out special counter sales of infant formula in pharmacies – this attracted the public’s attention and led to requests for further information about the policy. In this context, the CFDA released further details, indicating that the idea of trying out sales of infant formula in pharmacies is based on the experience from overseas markets, where pharmacies provide a key sales channel for infant formula.

The channel is expected to better guarantee the safety of infant formula because of the strict management system (with Good Supply Practices for Pharmaceutical Products, “GSP”) under which pharmacies operate. The details noted that the CFDA would gradually carry out a pilot program in this sales channel, and that any pharmacy which receives a circulation license for infant formula can set up a special counter in this way. Based on the pilot results, the CFDA would formulate related management measures and supervision systems to refine the approach.

 

Some pharmacies see this as an opportunity given government promotion of the channel and their GSP management, which is stricter than supermarkets, and the presence of nutritionists to provide nutrition services and professional advice to consumers, rather than simply sales staff in supermarkets. However, there are obstacles in promotion of this sales channel.

Customers are still used to buying infant formula through traditional channels in China, especially in supermarkets, so it may be hard for them to change this habit. Supermarkets sometimes run sales promotions on infant formula, which are attractive for customers. In addition, some pharmacies are unwilling to try the new approach; one factor is that, unlike with infant formula, pharmacies typically get discounts of 30-40% on the prices of healthcare products, making them more profitable for them. It’s expected that more regulations will be issued to lay out how formula sales though pharmacies will work in practice.

 

A number of pharmacies are also likely put off because in the past some such chains have tried this channel before and then given it up or ended up struggling to make enough sales. For example, Da Shen Lin Pharmacy, another well known national chain pharmacy, has been selling just 2 brands of infant formula (Mead Johnson and Abbott) in some of its flagship stores since 2010, but with only low sales to date.

Table Contents of Dairy Products China News 1308:

Prospects for Jiyuan Yili Dairy

Infant Formula Prices Decrease

Milk Supply Shortfall Debate

Pharmacy Starts Trial Sales of Infant Formula

Dairy Imports Increase in H1

NZ Starts Infant Formula Brand Register

Government Boosts Livestock Subsidy

Yili Partners with Dairy Farmers of America

Hunan Dakang Targets Dairy Business

Huishan Dairy Expands Farming Activities

Tianyou Dairy Launches New Yoghurt

QHT Performs Well in GOS

Dairy Products China News, a monthly publication issued by CCM on 15^th, offers you the latest information on new market dynamics, company development, new products, technology, packaging and raw material supply, etc. It also focuses on the government’s direction and polices, helping you get the whole picture of the industry. 

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and Consultancy Service. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

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