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Last Updated: Thursday, 4 October 2007, 23:26 GMT 00:26 UK
Organic farming grips China
By Juliana Liu
Business reporter, BBC News, Yanqing, China

Cows at Green Yard, one of China's first organic dairies, enjoy a pampered life in the country. They take daily strolls in the pasture. For a morning snack, the cows graze on grass untouched by pesticides.

Cow at Green Yard farm
Green Yard is at the forefront of Chinese organic farming

When it's time for a more filling meal, they dine on organic hay from Inner Mongolia, or perhaps sweetcorn, grown right on the farm. When they get sick, they take only traditional Chinese medicine.

The man behind Green Yard is Wang Zhanli, a farmer born in Yanqing, about two hours' drive from Beijing. He persuaded 50 of his neighbours to invest in his business.

Mr Wang had initially started a traditional dairy, but his small farm was no match for mass-market brands such as Mengniu Dairy, based in Inner Mongolia.

About three years ago, he decided to make the switch to producing organic dairy products, because he could charge more.

"Nowadays, what we eat is important," he said. "It's important to eat food that is good for you. A lot of farmers in China use too many pesticides.

"I got into this business because I thought the dairy market would take off. It's hard to succeed in the mass market, but we're selling a better product."

Green Yard's product costs two to three times more than regular milk. With only 600 cows, the dairy supplies a small market in Beijing, but the company is keen to grow.

It may be at least another year before the dairy covers its initial investment.

Awareness low

Small volume and high growth sums up China's nascent, and still tiny, organic market. Most of the country's organic products are sold overseas to Japan, Taiwan and other Asian countries.

Chinese woman shopping for milk in Shanghai supermarket
Demand for dairy products is growing in China

Official figures show organic exports totalled $350m in 2005, up from $150m from 2004. China has about 5.7 million acres of certified organic farmland, behind only Australia and Argentina worldwide.

Green Yard's Mr Wang says much more needs to be done to raise awareness of organic food in China.

Many people are unsure about the differences between organic and so-called "green food", which has been promoted as an alternative to organic.

In a country where fakes abound, many consumers are wary of paying top dollar for food that may not actually be organic.

Still, domestic sales grew about 50% last year, though the vast majority of Chinese simply can't afford to buy organic.

Dr Eva Sternfeld, of the China Environment and Sustainable Development Research Centre, says frequent media reports about tainted food are driving the market.

"From my German experience, I would say China is maybe 20 years behind," she said. "But our experience shows us also that China is developing very fast, so it might only take five or 10 years before China catches up."

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