BEIJING |
BEIJING (Reuters) – Want a slice of the billions of dollars China spends each year on farm subsidies? Become a middleman and open a toll road.
Operators of the vast network of roads that connect China’s fields to cities can earn gross margins of up to 90 percent, making them the most profitable of the supply chain middlemen who reap the most from China’s harvests.
So while food prices soared 11.8 percent and China spent more on farm subsidies in 2011 than ever before, the 18 percent rise in average rural incomes still left farmers like Jiang Bo lagging badly behind their urban cousins.
“Even when our vegetable prices are at their highest levels, we still do not make much money because there are too many middlemen in the supply chain,” said Jiang, a farmer in eastern China’s Shandong province, who told Reuters she is weighing whether to quit the fields for factories this year.
Cutting logistics costs — 10 percent
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