by Credit Suisse

How blueberries are lifting people in rural China out of poverty

Traditionally, farmers in poor rural areas of China grew crops with relatively lower economic value such as rice, corn, and tea. The lack of access to markets where they could sell their harvest compounded their problems.

Coming from a poor village himself, Yang Shufang, the founder and CEO of Zhejiang Lanmei Agriculture (“Lanmei”), knows first-hand the hardships that this life entails. His experience motivated him to do something that would help lift his fellow villagers out of poverty.

Since 1987, when blueberries were introduced in China from the US, the fruit has been increasing in popularity, particularly among the middle and upper classes in first and second-tier cities. Since 2001, blueberry cultivation scaled up, with Shandong, Jiangsu and Jilin being the first provinces to introduce blueberry plantation at scale. Demand for blueberries outstrips supply, so prices are healthy. In this trend, Yang Shufang saw a way to boost the incomes of Chinese farmers.

For the past eight years, through development of the blueberry farming industry, Lanmei has established a path to greater prosperity. It sells nursery stocks to farmers, offers training programs and seminars, monitors plant growth, and solves technical issues that farmers may have. It has brought up to an 185% increase in incomes for farmers in poorer regions, and with it greater security of livelihood and, ultimately, a blueprint for sustainable rural development within farming communities.

Partnerships for success

Collaborating with local farmers has been critical to improving incomes and standards of living. Through the development of well-acclimatized seedlings and active engagement with farmers, Lanmei has been able to create a robust market for blueberry cultivation, attracting more participation from low-income farmers.

So far, it has helped more than 12,000 farmers to increase their personal annual income by at least 50%, to RMB 30,000 for each farmer. Blueberry farming has also become a critical source of job opportunities for farmers over the age of 50, who are less competitive on the job market. As land under cultivation grows, ‘cultivation leaders’ in local communities require additional help, hence need part-time, flexible labour to work in fields several hours a day. This provides older workers with extra income. As a result, grandparents have been able to provide additional financial support to the household while looking after their grandchildren in the afternoon.

Earning prospects from blueberry farming alone are not enough to prevent migration to cities, but with Lanmei’s sustainable approach in blueberry value chain development, combined with the productivity contribution of grandparents, families in some regions will be able earn more than city jobs pay.

Local blueberry consumption is also helping to improve the nutrition of poorer, local farmers whose diets are restricted by price and choice of food.

Cultivating connections

To manage the cultivation and sales across the 12 provinces it covers, Lanmei has more recently entered into a strategic partnership with Zhejiang Supply Company (ZSC). As part of the China Co-operative Network (CCON), ZSC can use its relationships with farmers at the grassroots level to integrate Lanmei into its networks and provide support across its operations.

Apart from working with farmers, Lanmei has also co-operated with the governments of more than 10 state-level poor counties to promote and develop the blueberry industry and improve the livelihood of local residents.

Collaborations are also crucial when it comes to funding Lanmei’s operations. Financial support comes from many sources, including significant investment from Credit Suisse’s Asia Impact Investment Fund, and government subsidies for new and high-technology enterprises and other research projects.

“It has brought up to an 185% increase in incomes for farmers in poorer regions, and with it greater security of livelihood and, ultimately, a blueprint for sustainable rural development within farming communities”

Developing high-value blueberry breeds

Since its establishment in 2011, Lanmei has invested RMB 6-7 million annually into developing new blueberry breeds better suited to the Chinese climate. It has cultivated more than 200 blueberry species, including its “star breed”: Lanmei No.1, which has seen yields increase by 2 to 2.5 times compared to other breeds. Combining Lanmei No.1 with other breeds in some regions has helped extend the harvest season, which has stretched the income-earning period, too.

Additionally, it sells frozen blueberries, which are mainly exported and used as raw material for fruit fillings and other blueberry processed products. It is also looking to extend its product line with dried blueberry, tarts and bakery products, jam and juice.

“Our aim is to strategically develop the blueberry industry value chain in China, through the cultivation of the nursery plants at the upstream, and the creation of blueberry products and applications at the downstream, ensuring product quality from the start and adequate demand quantity at the end,” says Mr. Yang.

Lanmei has received government certification and licenses confirming its status as a producer of high quality.

Becoming the largest blueberry producer globally

As a result of consistent investment in R&D, Lanmei has positioned itself as a leader in blueberry industry development and social innovation through sustainable rural development. It shows the social and commercial value of supplying the domestic market with safe, sustainably produced food.

Mr. Yang sees a lot of potential for Lanmei in the future. “By leveraging the national policy on “Targeted Poverty Alleviation” we want to achieve a cultivation base of at least 380,000 mu (25,000 hectares) over four years. This will make Lanmei the largest blueberry producer globally,” he says.

Cultivating a community

Shang Xia Wen Village is in the southwest of Zhuji city, Zhejiang province. It is also the
hometown of Lanmei’s founder, Mr. Yang. In 2009, Lanmei, in cooperation with local
government, began a pilot blueberry project and planted over 300mu of blueberries in the
village. Over the next three years the impact was dramatic: annual income among local
residents increased from RMB 8,000 per person to RMB 15,000 per person.

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