Guidance and Planning for Processed Agricultural Products

Guidance and Planning for Processed Agricultural Products

Yun-Shan Huang (China Productivity Center Agriculture Innovation Department)

In recent years, the New Farmers’ Cultivation Program has been providing assistance to not only primary agricultural production, but also secondary and tertiary agricultural productions. To improve the development of agricultural product processing and manufacturing of processed goods that abide to food safety standards, the Plan provides guidance on establishing the processing facility site, improvement in food processing, registration for factory, and sales counseling which will help small farmers in both fields of production and sales; this will consolidate growth in the agricultural sector.

To create an environment that provides safe farming and stable income, the government amended the Regulations for Examining the Application of Structuring Farming Facilities on Agricultural Land. The set of Regulations establishes clear guidelines for the processing facility site on farmland and allows farmers to have an easier time understanding the agricultural industry chain, which in turn results in better operation and sales.

Due to processing regulations, when the government is helping farmers with processing facility site planning, the government needs to establish an understanding with the farmers and think from the farmers’ perspective with these following points:

Hardware and Equipment: In the beginning, the farmer needs to create an inventory of the farm's equipment and usage condition, including area and tools. This will ensure smooth development and testing in the future.

Conditions for Production: crop cycle and yield, yearly sales, condition of off-grade products, and production yield for products meant for processing.

Conditions for Processing: Evaluate whether farmers' agricultural produce is suitable for agricultural processing and the status of agricultural processing (whether self-processed or outsourced). In the case of self-processed goods, confirm the legality of the processing facility site.

Facility Site Condition and Financial Planning: Understand the construction area of future processing facility site, land status, and investment plans. Most importantly, calculate the walk-away point by financial planning to avoid excessive investment which leads to financial imbalance.

Planning for Processed Products: Understand the product’s market assessment and analyze similar products’ features on the market and their market share. In the case of rice bran product development, one can consider entering the general market which includes homogenous products by small-, medium-, and large-scale competitors. However, while a niche market such as rice cereal for infants might present less competition, it is important to consider problems such as product distinction from other firms.

It is more advantageous to take time and plan thoroughly when assisting farmers with plans for product processing. Only encourage farmers to commence their development-related operation when their game plan is ready to avoid the possibility of future setbacks.

We can see that rules regarding the agricultural product processing room (agricultural product processing related facilities) under the Farm Produce Transportation and Processing Facility provision of the Regulations for Examining the Application of Structuring Farming Facilities on Agricultural Land are listed below:

Land Use and Geography:

(1) Farmlands and cultivation lands (with the exception of industrial and river zones) within the non-urban land zones, or agricultural zone and agricultural conservation area within urban planning areas.

(2) Avoid farmlands within the special agricultural zone; if unavoidable, land adjacent to buildings or the zone perimeter will be used.

Construction Area: Floor area up to 988.43 square meters.

3 Rules Pertaining to the Facility Site Construction Zoning: It must include: (1) Management zone, (2) Refrigerator/Freezer storage area, (3) Processing and packaging zone, (4) Shipment storage contamination prevention area and other facilities. In addition, raw processing materials for agricultural goods (including silkworm and bee-related materials) require connection with agricultural production operation, as well as being a component of raw processing materials.

Thus, we hope farmers consider the above points and self-assess before initiating agricultural product processing. Regardless of the setup or plans for future processing facility site, the amount of raw processing materials, and plans for products to be developed or processed, agricultural product processing can be broken down into four general types:

Self-assessment for new product development: Assess the attributes of raw agricultural materials, processing methods, and the market.

Standardization of the process of material processing: Utilize existing technology for agricultural product processing, including raw material attribute analysis, facility usage, material usage, and steps of production.

Processing factory/room planning: Guidance for processing factory/room planning and set up, including procedures such as confirmation of land category, explanation of permittance regulations/building license application, and hardware planning.

Shelving Preparation: Assess the market, packaging label, cash flow concept, and selection of logistics/sales channels to ensure proper shelving.

Farmers have always prolonged the expiry date and increased the added value of agricultural products in order to increase income. Agricultural product processing has continued to be a highly discussed topic. In response to recent discourse’s heavy emphasis on food safety, farmers need to familiarize themselves with their own products’ characteristics such as post-processing taste and quality change, and, assess whether the product is suitable for processing. Also, farmers need to understand whether the processed product abides by label, additive, or packaging standards established by the government before delivering a product that responds to market demand.