LAIYANG, China, Nov 13 (Reuters) Strawberries have just begun to ripen in this high-tech greenhouse in northern China, their large, thick green leaves shining in the autumn sun.
Across a hill, cows roam, equipped with tags that measure their exercise, health and milk output.
This is a model farm being developed by Japan's Asahi Breweries Ltd <2505.T> at the request of the government of Shandong, China's top producer and exporter of farm products ranging from grains to chicken.
With a spate of scandals sparking a global outcry over the quality of Chinese products, Beijing is cranking up efforts to improve safety not only for exports but also for products sold at home.
''In the past, the work of farmers has been evaluated merely by the weight of their products,'' said Masaya Inui, president of Shandong Asahi Green Source High-Tech Farm Co Ltd in Laiyang, about 100 km north of Qingdao.
''They are far removed from the consumers in China, who are increasingly interested in food safety and are willing to pay more for quality products,'' he added.
Together with Sumitomo Chemical Co. <4005.T> and Itochu Corp <8001.T>, Asahi invested 13 million dollars last year to set up the 100-hectare farm, which supplies cities including Beijing, Shanghai and Qingdao.
While Asahi Green does not expect to break even until 2011, it hopes the Japanese technology will help farmers improve efficiency, food safety and income as well as repair soil damaged by years of heavy chemicals use.
''One of the things that stood out was overuse of chemicals, despite fertile soil,'' said Inui. ''The soil has deteriorated as a result. Farmers pay little attention as the land does not belong to them.'' Japan, which bought more than a quarter of China's 2006 31.03 billion dollars agricultural exports, has enforced strict controls since the discovery five years ago of high levels of pesticide in Chinese frozen spinach.
The project also comes as Beijing tightens its grip on food safety. In the past few weeks it sent several teams to Shandong to check on the use of chemicals, hitting raw nerves with many that focus on the domestic market and are not used to such controls.
Last month, China's Agriculture Ministry said it would ban production of five highly toxic pesticides as part of its campaign on food safety and product quality.
Though Beijing has banned the use of such pesticides from January, it has allowed production for exports and emergency use, which experts say has led to leaks into the domestic market.
''Every day we see residues in food,'' said a senior official at an independent food safety laboratory in Qingdao. ''Farmers are unaware of food safety concerns.'' VICIOUS CIRCLE Angus Lam, a environmental campaigner for Greenpeace, said traders often sold pesticides blended with illegal toxic chemicals. Farmers were keen on strong pesticides as pests had developed resistance after decades of heavy chemical use.
They were also anxious to use chemical fertilisers to make up for soil deterioration -- which in turn created a vicious circle, he said.
''The law is good if implemented,'' said Lam, who is also a food scientist. ''There is huge incentive to sell these pesticides. They account for 30-40 percent of the current market.'' The experts also agreed it was possible to buy safe food in China, though it cost money and required caution. Japanese were successful as they had worked on management controls for years.
''Among food exporters to Japan, China has the lowest violation rate on food safety,'' Masaaki Araki, director at Japan External Trade Organisation in Qingdao, told Reuters.
''Things that have passed the tough tests are of the world's top quality ... They may be safer than vegetables produced in Japan, which do not go through such rigorous tests.'' Now, many food exporters are shifting to the domestic market, especially as the scandals had cut into their foreign sales. They were also confident after heavy investment for sales to Japan.
''This is a business opportunity for those, like us, that have a strict safety standard,'' said Yu Jianping, president of Qingdao Chia Tai Co. Ltd, a unit of Thailand's Charoen Pokphand Foods
''We have accounted for about 20 percent of Chinese poultry exports, which mainly go to Japan,'' he added.
Bumei Mera, president of frozen vegetable manufacturer Qingdao Komey Trading Co, agreed, saying: ''We are now planning to start sales at home.'' ''In the past, you could not survive the domestic competition if you spent money on management controls.'' REUTERS SV DS1305