Shanghai's production and distribution system of fruits and vegetables has gone through three stages of development since the foundation of the People's Republic of China. The "market economy forming stage, "since the mid-80's, is the third stage. The vegetable and fruit production and distribution systems are changing due to two factors: movement towards market economy, and a large-scale development in the east coastal district of Pudong which diverts suburb farm-lands to industrial and housing areas. Until recently, China's socialist economy centralized the production and distribution of fruits and vegetables and aimed for self-sufficiency within the provinces. The consequence of this economic policy was a food shortage which lasted from the late 50s to the early 80s. The revision of the faulty policy lead to a long awaited reform. At present, in Shanghai, vegetables are distributed either to wholesale markets or directly to retail stores. The wholesale markets are either state-owned and private. Recently, vegetable distribution by private wholesale markets has been increasing. Nevertheless, the "Shanghai Vegetable Corporation," which once had monopoly on Shanghai's vegetable distribution, still carries 900,000 tons which account for 60% of Shanghai's annual vegetable consumption. There are twenty one state-owned wholesale markets in Shanghai (as of August, 1995). Four of them are large-scale markets dealing in vegetables which come from outside the province. The other seventeen are small-scale markets, dealing in fresh soft-leaf vegetables from suburban farms around Shanghai. While Shanghai's fruit and vegetable distribution system has gone through several stages and is rapidly changing, its market system is in an initial stage. Consequently, it is the market system which Shanghai must urgently develop so that its market mechanism can work properly.
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