The Hidden Price of Food from China

'You Get What You Pay For'The Hidden Price of Food from China
In recent years, China has become a major food supplier to Europe. But the low-cost goods are grown in an environment rife with pesticides and antibiotics, disproportionately cited for contamination and subject to an inspection regime full of holes. A recent norovirus outbreak in Germany has only heightened worries.

October 17, 2012  

Qufu, the city in China's southwestern Shandong Province where Confucius was born, isn't exactly an attractive place. But its fields are as good as gold. A few weeks ago, a shipment of strawberries left those fields bound for Germany.The air above the cities of the Chinese heartland is blackened with smog, as trucks barrel along freshly paved roads carrying loads of coal from the mines or iron girders from the region's smelters. Fields stretch to the horizon, producing food to feed the world's most populous country.

The chili pepper and cotton harvests have just ended, the rice harvest begins in two weeks, and garlic will be ready in April. Thousands of female farm workers are kneeling in the fields planting the next crop of a particularly profitable plant in the international food business.

"Garlic is eaten everywhere," says Wu Xiuqin, 30, the sales director at an agricultural business called "Success." "We sell garlic all over the world, and increasingly to Germany." The going price of a ton of white garlic is currently $1,200 (€920). The Germans, says Wu, insist on "pure white" product, and they want the garlic individually packaged.

Well over 80 percent of the garlic sold worldwide comes from China. The "Success" farm produces 10,000 metric tons a year. Based on what she's seen at food conventions in Berlin and elsewhere, no country on Earth can compete with China. Her company supplies peeled, flaked, granulated and pulverized garlic, says Wu, and it has now added ginger, chili peppers, carrots, pears, apples, sweet potatoes and peanuts to its product line.

China, which already sews together our clothes, assembles our smartphones and makes our children's toys, is now becoming an important food supplier for Germany. Since China, as a low-wage country, doesn't exactly have a good reputation among consumers, the food industry usually doesn't mention the origin of the products it sells. Many Germans only realized how much of the food on their plates is harvested and produced in China when thousands of schoolchildren in eastern Germany were afflicted with diarrhea and vomiting two weeks ago in an epidemic thought to have been triggered by Chinese strawberries contaminated with norovirus.

A Growing Global Supplier of Food

There are some bizarre aspects to the global flow of food products. In some parts of China, the population still doesn't have enough to eat. To address the problem, the country is buying up farmland in Africa and importing massive quantities of powdered milk, chicken and pork. EU-based companies sold 393,000 metric tons of pork to China last year, an increase of 85 percent over the previous year. Food companies see China as an attractive growth market.

Conversely, China is also selling far more food products to Europe than it used to, as the world's top exporter recognizes a profitable growth market in Europe. From 2005 to 2010, the value of Chinese food exports worldwide almost doubled, increasing to $41 billion. And Germany, which imported €1.4 billion worth of food from China last year, is becoming an increasingly important customer. Although the country only accounts for about 2 percent of all German food imports, "China has moved into this market with surprising speed and momentum," says a food industry expert.

As always, the country has quickly adapted to the market's needs. While it was mostly Chinese specialties that were sold in German grocery stores in the past, there is now a growing market for cheap staple goods and prepared ingredients, such as the sliced strawberries in 10-kilo (22-pound) buckets that ended up in German school cafeterias.

Two things make China appealing for large companies such as Nestlé, Unilever or Metro: price and volume. "Of course we could buy our onions or mushrooms from 10 different suppliers, but that would entail a huge effort," says a food industry executive. Food companies have to familiarize each supplier with the market and then manage and monitor them.

China's farmland is as vast as its supply of cheap labor. "Picking, washing and cutting up strawberries is labor-intensive because using machines is almost impossible," says Felix Ahlers, the head of Frosta AG, a German frozen food company. This makes it more expensive to buy fruit from Europe, as his company does. But, as Ahlers points out, there are producers that only pay attention to price.

The diversity of products China has to offer also seems to be unlimited. For example, the country has become the world's largest exporter of honey. It is also starting to produce more and more finished products, a market with even bigger profit margins than food commodities. A significant portion of the world's salmon haul is processed in China, into smoked salmon, for example. The country famous for Peking Duck is now making frozen pizzas for the global market -- at a fifth of German prices.

Farmers Who Don't Eat Their Own Food

From an environmental standpoint, the production of pizzas on a global scale isn't all that worrisome. According to calculations by the Institute for Applied Ecology in the southwestern German city of Freiburg, shipping frozen products has only a minor adverse effect on our environmental footprint. Of course, it's "always best to eat regional and seasonal food," says Moritz Mottschall, a researcher at the institute. But if someone has a taste for strawberries in the fall, he adds, transporting 10 tons of product by ship from China generates only 1.3 tons of CO2 emissions. When trucks carry the same amount of product from the Spanish city of Alicante to the northern German city of Hamburg, they emit 1.56 tons of CO2 into the atmosphere.

The biggest problem with Chinese food products is the local production environment, which includes the excessive use of toxic pesticides for crops and of antibiotics for animals, sometimes coupled with a complete lack of scruples. In 2008, some 300,000 infants in China were harmed by milk and baby formula products adulterated with the chemical melamine. Chinese producers had added the substance, which is especially harmful to the kidneys, to powdered milk.

Chinese producers have also sold peas dyed green, which lost their color when cooked, fake pigs' ears and cabbage containing carcinogenic formaldehyde. Then there was the cooking oil that was captured in restaurant drains, reprocessed, rebottled and resold. The government newspaper China Daily has even reported on fake eggs.

Wu Heng has risen to become a prominent food-safety advocate in China. Last spring, Wu read about a strange powder that dealers were adding to pork so that they could sell it as beef, which is more expensive. Wu quickly developed an aversion to noodle dishes listed as containing beef.

He put together a website that includes a map pinpointing Chinese food scandals reported in the media. Wu called his website "Throw it Out the Window," an allusion to former US President Theodore Roosevelt, who is said to have thrown his breakfast sausage out the window in disgust after hearing about the appalling conditions in Chicago's slaughterhouses.

Animal products are the most questionable, says Zhou Li, a lecturer at Beijing's Renmin University who studies food safety. Meat is more profitable than vegetables, which only increases the incentive to maximize profits.

Zhou notes that farmers used to eat the same foods they sold. But now that they are aware of the harmful effects of pesticides, fertilizers, hormones and antibiotics, they still produce a portion of their farm products for the market and a portion for their own families. The only difference is that the food for their families is produced using traditional methods. In fact, many wealthy Chinese have bought their own farms so as not to be dependent on what's available in supermarkets. There are also reports of special plots of land used to produce food exclusively for senior government officials.