A Study on the Cost Increase of Quality Control Systems in a Chinese Frozen Vegetable Venture

Abstract

Cost increases in frozen vegetable processing ventures have arisen due to new quality control systems established in response to the pesticide residue problem in China. This paper focuses on the main factors of these increased costs and the measures to absorb these by business ventures. First, the research notes that while quality control systems have been implemented by vegetable producing ventures in the Laiyang region of China, some ventures still collect vegetables through village committee systems in a manner similar to that preceding the pesticide residue problem. Second, the research identifies the increased costs arising with the quality control systems as centered on personnel expenses, inspection costs, and plantation management. In order to absorb these increased costs, ventures have cut the self-control plantation by changing them to contract plantations, enlarged their exporting scale and developed new foodstuffs, especially seasoning products.