A study of Agricultural Produce Logistics Park Development in

Heilongjiang Province

WEI Heng1, MENG Die2

1.2. Management Science and Engineering Postdoctoral Station, Harbin Engineering University,
1. School of Economic Management, Northeast Agriculture University, Harbin, P.R. China, 150030
cici567@sina.com

Abstract: As one of China’s leading agricultural bases, the research into the construction of agricultural
produce logistics parks in Heilongjiang will be of great significance in the process of modernizing the
province’s farming undertakings. This paper expounds the feasibilities of constructing farming produce
logistics parks in Heilongjiang Province as well as analyses the problems that should be avoided in this
area. Meanwhile, the paper proposes some solutions to dealing with the possible problems with a view
to giving constructive suggestions to the development and construction of such parks in this northeastern
province.
Keywords: Heilongjiang Province, Agricultural produce, Logistics park

1 Introduction
With the further development of logistics industries, particular logistics parks will come into being.
And the designs and construction of such parks will gradually become one of the important factors to
constitute modern logistics industries.
Since the construction of logistics parks in foreign countries aims at alleviating traffic burdens, the
relevant departments attach great importance to the consequences caused by transportation and
environment in the parks building process. And the scale benefits of such parks are obtained through the
improvement of fundamental service facilities and favorable policies carried out by the governments
( Wu Wenbing , 2006).
Many of the domestic scholars and logistics parks designers are brainstorming certain modes fit for
China while drawing on experiences from their foreign counterparts. Meanwhile they are becoming
more and more aware of the parks’ intensive functions and scale benefit effects.
However, short history of logistics parks in China resulted in unclear positioning, improper layouts,
redundant construction and resources wastes (Lu Yubo & Wei Fang, 2006). The suggestions concluded
in the contemporary researches that deal with the barriers mainly include the predictions of needs,
scientific location selection, market operation and supports from the governments (Chen Daifen &
Zheng Hongjun, 2007). But the current researches are shy of suggestions such as comprehensive
management means, the training of professional staff members and risk prevention. Heilongjiang is one
of China’s most important grain producers and the development of agricultural produce logistics parks
in the province is of great significance in promoting the modernization of the region’s agriculture.
The agricultural produce logistics parks are composed of centralized farming products logistics
organizations and facilities and multifunctional grain processing enterprises that could realize the
intensified shipment and processing of agricultural produce. Heilongjiang is one of China’s most
important grain producers and the development of agricultural produce logistics parks in the province is
of great significance in promoting the modernization of the region’s agriculture.

2 The feasibilities of constructing farming produce logistics parks in Heilongjiang

2.1 Rapid agricultural development, high rates of market grains

Heilongjiang is rich in agricultural produce. (See tablet 1) Little proportions of the annual grain
output could meet the province’s self-needs, and the rest will be delivered to the markets. Large quantity
of agricultural products needs improved and modern logistics infrastructure. Meanwhile the

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phenomenon makes the intensive effects of logistics parks possible.

Tablet 1: Outputs of HLJ’s major farm produce in 2006, (Unit: 10,000 tons)
grain bean oil flax beet vegetable Melon & meat milk
fruit
3780 689.3 63.1 20.5 205 1135.6 366.6 319.6 464.6
(Source: Heilongjiang Statistical Almanac 2007)

2.2 Improved infrastructure

The rail lines, roads, inland river routes and civil air routs in Heilongjiang Province extend 5,503
km, 139,335 km, 5,528 km and 138,845 km respectively.
An initial comprehensive communication network with Harbin as the centerpiece that radiates the
whole province and links the other provinces and the Northeast Asian countries has been formed.
In addition, modern telecommunication, TV and radio and computer networks have been formed.
They include the public networks and the auxiliary special information networks. Convenient
communication networks and improved telecommunication facilities help lay foundations for the
construction of Heilongjiang’s agricultural logistics parks.

2.3 Favorable policies

The strategy of revitalizing the old industrial bases in northeast China brought historic
opportunities to the economic development in this region as well as created a favorable environment for
the rapid development of logistics here. The Outline for Heilongjiang’s Logistics Development in the
11th Five-year Plan gives the details of the province’s logistics layouts and major development
directions.
Meanwhile, the Development Outline in Harbin in the 11th Five-year Plan also put forward the
construction of a city logistics system. The encouragement and support from the governments will do
speed up the development of Heilongjiang’s agricultural produce logistics parks.

2.4 Stable development of market circulating system of agricultural produce

So far 142 agricultural wholesale markets have been established throughout Heilongjiang Province
with 34 of which could realize over 100 million Yuan RMB in trade volume annually. Meanwhile the
province also has 1,744 urban and rural fairs.
Agricultural produce export platforms, with Harbin Hada Fruits Wholesale Market, Qiqihar Farm
Produce Wholesale Market, Heihe Vegetable and Fruit Export Trade Center, Beian Exporting Farm
Produce to Russia Market as carriers, have came into being.
A stable developing agricultural produce circulating system created a favorable environment for
the operations of agricultural produce logistics parks on a certain scale.

3 Problems that should be avoided in the process of constructing agricultural

produce logistics parks in Heilongjiang

3.1 Avoiding lack of scientific outlines and blindly construction

Currently, most of the regions fail to take the radiate effects of the parks into full consideration that
results in redundant construction. If short of comprehensive analyses of logistics needs, inappropriate
positioning, redundant construction and resources waste will appear.

3.2 Avoiding governments’ over-interfering

The construction and operation of agricultural produce logistics parks are indispensable to the
participation of governing bodies. Affected by the traditional systems, governments are prone to play a
double-role, “owner and operator”, in this area. The over-interfering from the governments frequently
makes logistics parks fail to bring their full initiatives into full play. As a result, the guiding role of
markets will not be obvious. Therefore, over-interfering from governments should be avoided in a bid to

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let “markets” control the parks.

3.3 Avoiding the inexplicitness of parks’ concept and function

Heilongjiang only has a short development history of agricultural produce logistics parks and is
uncertain about the concept and function of such parks. Usually, logistics parks are wrongly considered
as logistics centers. As a matter of fact, logistics parks are a combination of resources, management,
techniques and other factors in different logistics centers. The inexplicitness of parks’ functions will lead
to the irrational construction layouts, irregular operation and incomplete services. To be honest, this
should be avoided in the process of the provinces’ agricultural produce logistics parks construction.

3.4 Avoiding low-level logistics services

Currently, the agricultural produce logistics in Heilongjiang Province are merely in the phase of
simple storage, transportation and processing. The self-operated logistics enterprises only eye the daily
production but ignore the circulation. The province boasts a number of general warehouses but is short
of low-temperature and refrigerator warehouses specially designed for farming produce.
The level of mechanization is low and most of the work is completed through manpower. In
addition, E-commerce witnesses a slow development in the province in this area. Broadband network
has not been widely applied.
The circulating processing and packaging should be strengthened. To sum up, Heilongjiang
Province should give priorities to the development of regulated, information-oriented, standardized and
comprehensive agricultural produce logistics parks.

3.5 Being aware of the importance of the parks’ integrity

Currently, the investments in infrastructure are advocated but the management within the
administration is ignored. The enterprises in the parks mainly involve storage and transportations that
ignore the cooperation with insurance and financial institutions. Driven by self-interests, the enterprises
are prone to put the parks’ overall interests aside. As a result, low-level services, incomplete functions
and ragged service standards will appear in the parks, which hinder the further and rapid development of
Heilongjiang’s agricultural produce logistics parks on a certain scale.

3.6 Avoiding being empty of professionals

A lack of logistics specialists is the major reason that the logistics parks’ services feature low levels.
Currently, the province is short of high-level logistics professionals. Only the HIT, Harbin University of
Commerce, Heilongjiang Bayi Reclamation University and Heilongjiang Institute of Engineering have
opened logistics management courses, however, the students of the higher-learning institutions only
major in industry-related logistics. Therefore the professionals who have good commands of agricultural
logistics operating procedures, parks’ construction, E-commerce and information management are in
great need in this northeastern province. Meanwhile, it is difficult to attract such professionals to work
in Heilongjiang. All the status quo hinders the development of Heilongjiang’s farming produce logistics
parks.

4 Solutions to constructing better agricultural produce logistics parks in

Heilongjiang

4.1 Being clear of the parks’ orientation

Scientific market investigation and research must be done prior to the designs of any logistics parks.
The location setting of the parks should be in line with the practicalities of supply and need. The
orientation setting of the agricultural produce logistics parks in Heilongjiang should be considered based
on the economic development level of the province. The detailed analyses into the service value-added
potentials should be made. All the preparations should be able to bring the initiatives of the parks into
full play. Meanwhile the parks should be able to further stimulate the development of agriculture and
logistics industry.

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4.2 Scientific location selection, rational layout
The construction of logistics parks is a complicated and large project and the site selection and
layout should be given priority. The principle of adjusting measure to local conditions should follow in
site selection and layout. Implementation plans should be made prior to the parks’ general designs.
Meanwhile, it is necessary to set targets in different phases and establish assessment mechanism in a bid
to make sure the smooth development of the parks’ construction. Also the construction of the parks
should be in line with the practical needs of the modern agriculture in Heilongjiang.

4.3 Setting clear strategic plans

The marginal areas of Harbin, Qiqihar, Mudanjiang and Daqing could be chosen as agricultural
produce logistics park sites. Within one to five years, one or two farming produce logistics parks could
be constructed and a number of logistics agricultural processing and trade enterprises could be attracted
there. The initial services of the parks cover storage, transportation and distribution.
Within five to ten years, three or four large-scale modern multi-functional agricultural produce logistics
parks could be constructed. The administrations could bring various enterprises and services institutions
to their parks. And closer partnerships with financial, communications, customs, industry and commerce
and taxation departments should form. The parks will integrate the functions like packaging, circulating
processing and assemble and distribution as a whole.

4.4 Sticking to market-oriented principle

The provincial government should convert their functions and strengthen services and turn the
logistics parks into a fair, just and open competing platform for the logistics enterprises. In the
construction and operation of the parks, the government should be well aware that the enterprises are the
“actors” and they are only a “guide”. A market-oriented logistics park mode is necessary.

4.5 Strengthening the construction of “software” and “hardware”, improving service levels
First of all, an improved agricultural produce logistics storage and transportation system should be
realized. More efforts should be made in the construction of heat preservation and refrigerator
warehouses. Temperature control and anti-damp devices should be installed. All the efforts aim at
reducing the circulating costs of the agricultural produce.
Second, modern management systems in the parks should be established. Services should be paid
more attention. Meanwhile, the staff should further regulate the parks operations and improve the
standardized levels.
Third, the information network within the parks should be formed. An internal network will be of
great significance in the real-time tracking and whole-process management to the enterprises in the
parks.

4.6 Paying more attention to the training and attraction of processionals

Logistics professionals are crucial to the development of the special parks. Thus, Heilongjiang
Province should step up efforts to the training and nurturing of such professionals. The capabilities of
the logistics parks’ planners need improving. The efforts made by governments, higher learning
institutions and enterprises could help fulfill this goal. The professionals should have good commands of
agricultural produce logistics, parks designs, E-commerce and info-management. Meanwhile, the
educational and training programs arranged by the parks should be encouraged. A series of
talents-attraction systems should be established in order to meet the short and long terms’ needs of the
province.

4.7 Introducing more favorable policies

Since the construction of agricultural logistics parks require long Cyc and huge investments, the
authorities should introduce necessary favorable policies in land use, financing and tax levying. The
governments should create a better environment for the parks’ development and investment-attraction.
The governments should introduce detailed standards for the land remising funds and the validity and

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offer certain favorable policies. Meanwhile relevant departments can give discount loans and
money-lending vouching to stimulate the construction and development of the farming produce logistics
parks. Within certain periods, the governments can reduce or scrap the taxes levied on from the
enterprises operating in the parks. For instance, in the first two years after the operation of the parks, the
taxes could be exempted. And in the following three years, the enterprises can enjoy tax reduction
favorable policies. All aims to push for the parks’ development.

4.8 paying more attention to risks

Since the investments are huge and the operating duration is long (30-50 yrs), it is difficult to get
the returns in a short period and the short-term profits are difficult to calculate. As a result, the operating
risks of the parks are relatively high. Therefore, the relevant departments should pay more attention to
the predictions of logistics needs. Long-term development plans that cover within-garden resource
conformity should be introduced. Meanwhile warning and risk-avoiding mechanism should be
established. The administration should try to reduce the operating risks of the parks to the minimum
levels.

5 Conclusion

The agricultural produce logistics parks have intensive and overall planning functions that are able
to offer comprehensive services, link up the business circulation and radiate the economic development
of the adjacent rejoins. Therefore, strengthening the construction of such parks are of great significance
in modernizing Heilongjiang’s agriculture.
The thesis is the phase achievement <Integrating the Construction of Farming Produce Marketing
Service Platforms in Heilongjiang>, a postdoctoral fund program in the province, as well as the doctoral
fund launch subject < research on building agricultural product marketing system of intermediary
organizations of Heilongjiang province>.

References
[1] Wu Wenbing , Long Wei. A Research into the Development and Orientation of China’s Agricultural
product Logistics Parks. Logistics Technology, 2006(5), p3 5; ～
[2] Chen Daifen , Zheng Hongjun.The Development Modes of China’s Agricultural product Logistics
parks and its Researches.Guangdong Agricultural Sciences, 2007 (6):p 91 94; ～
[3] Lu Yubo. Scientific Planning of Logistics Parks. Commercial Business, 2006 (1): p16 17; ～
[4] Li Xiaoqian , Mu Yi. A Consideration of Construction of Logistics Parks in China,.Logistics Science,
～
2006 (1):p 113 115;
[5] Zhang Ping ,Tang Libing .The Status Quo and Countermeasures of Agricultural product Logistics in
Heilongjiang.Modern Agriculture, 2008 (2): p1 4. ～
Brief introduction to the authors

Wei Heng: Female, Management Dr., Post-doctor of Management science and engineering postdoctoral
station of Harbin Engineering University, MA tutor and associate professor with the School of
Management, Northeast Agriculture University
Research topic: Logistics management, Marketing
Meng Die: Female, MA student of the School of Management, Northeast Agriculture University
Research topic: Agricultural produce marketing and trade

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