Litchi

In China, Farmers' Labor Bears Too Much Fruit By KEITH BRADSHER

As in many industries, from television sets to washing machines and now to cars, early success by a few producers led to a flood of investment, overproduction and the evaporation of profits.

While business success often draws new competitors in Western countries, the effect is outsize in China.

Each state-owned bank branch tends to funnel huge loans at very low interest rates to investors in any industry that seems profitable, almost regardless of whether other lenders are doing the same, bankers said. And with a long tradition of news media censorship and a distrust of official pronouncements, business executives and peasants alike tend to barrel ahead, leery of believing admonitions against over-investment - until prices plunge.

Among litchi producers, the problem was not so much loans, though these played a role, but rather a kind of folk wisdom that litchi trees would always be a good investment for families' savings...

After three years, the trees were three feet tall and producing five or six pounds of fruit apiece. After six years, the trees are expected to be double that height and would yield 35 pounds of fruit apiece if all the litchi were allowed to mature, Mr. Zhao said.

In another decade, his trees will be fully grown, more than 10 feet tall and each producing up to 170 pounds of litchis, swelling the oversupply.

The Chinese government has banned the planting of any more litchi trees, and banks have stopped lending to litchi farms. But the current glut is not only going to grow worse as more trees mature, but is also likely to last a long time.

Once a tree reaches full size, it can continue producing litchis for centuries, although the poundage does decrease somewhat with age. Detailed production records show that a few litchi trees in western Guangdong Province are 1,200 years old, and they are still bearing fruit, [according to a professor of horticulture]...

A lack of a futures markets for commodities in China has made it hard for farmers to foresee the long-term direction of prices. Some litchi growers associations now allow the trading of rights to future deliveries, but only up to six months ahead, and the availability of these trading rights comes too late to stop the soaring output now.

Fresh litchis are something of an acquired taste in any case, as they are time-consuming to peel for the modest fruit they contain, especially in the case of heiye litchis. [hence the name black leaf litchis; they bear fruit with a blackish-red peel, and the seed is so large that there is little flesh. The meager flesh is watery and nearly transparent, and has a weak flavor.]

Yet the litchi, long a symbol of China, is in danger of becoming passé in its home country. A canned litchi-flavored drink sold across the nation for many years has been losing sales lately, as young people choose newer and more fashionable drinks, like Coca-Cola.

An acquired taste? That means he doesn't like them. And as for cola, I suspect that's a temporary phenomenon exacerbated by the lack of marketing know-how. In Japan and Taiwan, it hardly has the market for drinks cornered. Anyway, what he means by a symbol of China may have something to do with the Emperor's concubine Yang Guifei 杨贵妃 (719-756) and her legendary fondess for litchi 荔枝 from Lingnan 岭南.