China’s response to dynamic change in agrifood markets

China&rsquo;s economy has experienced remarkable growth since economic reforms were initiated in 1978. Importantly, the growth rate of the agricultural sector has exceeded that of the growth of China&rsquo;s population by nearly five times, transforming the country's food economy. This paper argues that while China&rsquo;s food and agricultural products will continue to be produced by millions of small farmers, there are great challenges in modernising the grassroots production and marketing systems. <br />The author notes that markets at all levels are competitive and food is being provided to the cities in an efficient and inexpensive way. However, in a system is made up of 240 million small farms with an average land holding of less than 0.6 hectares, there will be great challenges to transform the system into one that is modern, vertically integrated and able to meet the nation&rsquo;s increasing demand for safe, traceable and reliable food. <br /><br />In facing these challenges, the paper describes how China&rsquo;s government is beginning to work on ways to transform China&rsquo;s food system in all segments of the supply chain. The Organisation of Agricultural Vertical Integration Management (OAVIM) is a comprehensive system aimed at improving the income of farmers and raising the profits of food-related enterprises by integrating production, processing and the marketing of agricultural products. <br /><br />In their drive to promote OAVIM and more general agricultural development, the author notes that government has adopted a number of innovative approaches. These are identified as: promoting agricultural vertical integration, including measures such as financial support and preferential tax policies promoting farm professional cooperatives or associations, through the enactment of new laws, improvement of policy support systems and a number of pilot experiments and demonstrations facilitating agricultural product safety development,&nbsp; through the enactment and implementation of a new law: The &ldquo;Agricultural Product Safety Law&rdquo;