The Research On The Implementation Of Quality Standards In China’s Agriculture Value Chains

The main aim of this article is to find finding solutions of Agriculture safety and farmers’ income issues from the perspective of value chain. The main body of China’s agricultural value chains are in small scale, with a low market concentration; and the link between different bodies was mainly loose market-based governance; with a large loss in circulation China’s agricultural value chains had a weak system integration ability, had not yet formed a symbiotic value chain; China’s agricultural value chains had low degree of standardization with a weak motivation to implement standard. Our current agricultural value chains are difficult to guarantee basic food safety, not conducive to the upgrading of agricultural products and the improvement of farmers’ income. As a result,we must solve the existing problems from the perspectives of agricultural value chains.Reviewing the history of agriculture in developed countries, it can be concluded that standardized agricultural value chains could solve problems above, the analysis of standards’ influences on value chain governance structure and its performance justify our view.China’s current public standard degree is low, lacking of private standards, the implementation process is slow, we examines the building,implementation process of standard, and the welfare effect of quality standards to solve the problem. Through theoretical model analysis on the formulating of public standards by government, we found that a low government financial input, a low level of consumer income, the high cost for government to formulate standards, for enterprises to executive standards caused the low level of public standards. And the lax government supervision with the current development situation of social organization led to lacking of private standards.The evolution of standardized agricultural value chain was a result of gaming between the bodies of value chains, with every bodies willing to implement standard. Only in the case that the premium consumers are willing to pay for a standardized product is larger than the cost increase in implementing standards, plus,enterprises are willing to drive farmer.Through theoretical modeling we found that the actors influencing the standardized agricultural value chains are: consumers’income levels, government’s regulation level, capital supply, transaction costs between different actors, knowledge level of residents; the higher the consumer income level, the more stringent of government regulation,the more abundant of capital supply, the lower of transaction costs, the higher the educational level of residents, the more likely for the evolution of the standardized value chains in a areas.Through the implementation of standards, exporters met the requirements of international buyers, broke through trade barriers, achieved product upgrading, process upgrading, and part of functional upgrading. However the added value of agricultural products did not show a significantly improvement, resulting a strange phenomenon of "high quality and low price" for china’s export agricultural products. The main reason is that China’s domestic agricultural value chain is not perfect. First, the low quality of products in domestic agricultural market affecting the overall image of China’s agricultural products. Second, domestic high-quality products couldn’t achieve a reasonable prices in domestic markets, forcing domestic enterprises to take the road of export, relying on scale instead of quality competition; last, enterprise lack the capacity of exerting function upgrading with a paucity of innovation mechanism in domestic markets. As a result, the key to upgrading in global value chain is doing good job in domestic value chains first. The implementation of standard could produce the crowding out effect on small and medium enterprises, farmers. Through the horizontal cooperation of value chain the crowding out effect could be alleviated. The final measurement analysis verified the promoting effect of standardized value chains on agricultural labor productivity and farmer income.The main innovation parts of this paper are to examine China’s current agricultural product quality safety issue and farmers’ low income issue from the perspective of the value chain; analyzing standards’ influences on value chain governance model and its performance; examining the generating process of public and private standards, with which explaining the reason of China’s low level of public standards and the paucity of private standards; constructing theoretical models from both supply and demand sides to examines the evolution of agricultural value chain and find factors influencing the evolution of standardized Agricultural Value Chain; examines the welfare effects of standards in agriculture.