Since the Ministry of Agriculture
of China (MOA) released the agricultural subsidy policy on 6 April, 2012,
USD253.16 million (RMB1.6 billion) of subsidy has been allocated to 11 winter wheat
planting provinces and areas in China to subsidize peasants' use of pesticides
and foliar-fertilizer on winter wheat, with total planting area reaching 21.33
million ha., based on CCM International’s latest issue of Crop
Protection China News.
The main reason for allocating
such large amount of subsidy by the MOA in just two months is to ensure the
high and stable yield of the winter wheat this year.
Although the subsidy seems to be
a tip of the iceberg of Chinese Government's agricultural budget made at the
beginning of 2012, over USD194.41 billion, it is still a big cake for domestic
pesticide enterprises.
Driven by the large profit in the
subsidy, many domestic pesticide enterprises scrambled for the bid inviting of
local governments. Some pesticide enterprises in other provinces and areas even
made great effort to go cross-regional bid.
"We have paid great
attention to the dynamic of government purchasing. We set the goal of achieving
an order worth USD12.66 million when we got the information that the Henan
Government was planning a government purchasing of USD63.29 million. Aiming to
get the order, we set up a special team to prepare all the documents needed in
the bid and tried our best to make all the procedures right," said a
manager from Guoguang Agro-Chemical Co., Ltd., a large pesticide enterprise
located in Sichuan Province.
However, even if enterprises are
very excited about government purchasing and put a lot of enthusiasm on it,
many of them still can't get involved, even for some large pesticide
enterprises.
Owing to the cumbersome
procedures of the bid inviting, lots of pesticide enterprises lack the
experiences of preparing bid materials. As many pesticide enterprises located
in different provinces went to other provinces for the bid inviting, they were
forced to give up when they found that it was 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 set by local
governments was also a big threat to the pesticide enterprises who want to gain
the bid inviting, especially those medium and small sized ones.
Take the threshold of the bid
inviting of pesticide purchasing by governments in Shandong
Province and Henan Province
Suppliers should be independent
legal entity with registered capital no less than USD1.58 million. Owing
pesticide production license, pesticide registered license and product standard
certification should be one of the main requirements and all these licenses
should be valid. Pesticide products should get registered on wheat. Enterprises
should issue qualification test report of provided products. Enterprises should
own the quality control lab and five years of production experience of related
products. And the capacity of the related products should exceed 1,000t/a.
Some provinces which invited
public bidding by provincial authorities only allowed large and famous
pesticide enterprises to participate.
Facing the high threshold set by
governments, small-sized pesticide enterprises have to find their own ways to
attend the bid. Aiming to meet the requirements, many small enterprises choose
to co-found pesticide enterprises with manufacturers, large pesticide dealers,
etc. Forming coalition bidder with qualified enterprises also can help them to
participate.
As Chinese government's focus on
the governments purchasing of pesticides increases year by year, domestic
pesticide enterprises start to realize the importance of anticipating and
achieving the bid inviting. It not only provides great profit but also a good
marketing measure for a company's products due to the government's credibility.
However, different from normal marketing channels, government purchasing seems
to be a tough task for most of domestic pesticide enterprises. How to overcome
the problems of less experience in dealing with governments, knowing well all
the cumbersome procedures during government purchasing is now become the first
puzzle for most domestic enterprises to solve.
Content of Crop Protection China
Government
purchasing: excited but hard to involve for most pesticide enterprises
Glyphosate
price rises against market trend
Large
area in China
Full
implementation of new pesticide policy in Hainan
postponed again
MIIT
releases new policy for renewal of pesticide production licenses
Zhejiang
Wynca to set foot in seed industry
Shandong
Dacheng ready for being backdoor listed
Jiangsu
Kuaida to largely expand phosgene capacity
Jiangsu
Lanfeng puts some new projects into production
Crop Protection China
About CCM
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