Raising China’s PIgs

“You stand to lose if you’re in the business,” says Mr. Liu, owner of Fu Hang farm, a medium-sized pig farm located in the Northeast part of Zhejiang Province.

The farm has twenty sheds with a total of 158 rooms, each of which holds eight to nine pigs, making a total of around 1,300 pigs. “It used to be common practice to discharge waste into waterways. But now, nobody dares to do so! The local environmental protection authorities are fairly strict. You will get huge fines!” says Mr Liu, throwing his hands in the air. Instead of disposing of the waste, the family collects the pig manure to use as fertilizer on the fields, and the urine for biogas to cook.

Mr. Liu, who started with two sheds two decades ago, managed to keep and expand his business despite drastic changes in the industry and Chinese economy. “I love pigs. Raising pig is my family tradition,” Mr Liu replies with a smile, when asked his motives for maintaining his business in these tough economic times.

In 2007, the government initiated a policy of subsidizing 100 yuan (approximately $14.6) per sow in an effort to boost supply and drive down the price of pork. The policy attracted a great number of farmers into the business. “I made a great fortune in 2007. But now…” Mr. Liu shakes his head, “there’s too much competition. When it’s really bad, I lose on average 100 yuan per sow.” Besides the intense competition, decreasing demand in the local markets and rampant disease also contribute to these losses.

According to the China National Bureau of Statistics, pork consumption, both in urban and rural areas, has been on the rise since the 1980s, reaching its peak in 2005 and hovering around that point ever since. The gap between urban and rural consumption is narrowing which, by official interpretation, means plenty of room for growth in rural consumption. The proportion of pork in overall meat consumption, however, is decreasing due to the development of poultry-based fast food industries, among other factors. Nevertheless, pork consumption is predicted to pick up because of its low price and traditional role as the most popular meat in China.

While pork was 28 yuan (approximately $4) per kilogram in 2008, current prices hover around 20 yuan (approximately $3) per kilogram. However, Mr. Liu does not believe that the price reflects the real cost of safe and good-quality pork. “Foot and mouth disease, which we call No.5 disease in China, is a big problem that has not been taken seriously by the government. The government speaks high-sounding words, but the Japanese government killed and buried sick pigs. In China, they (pigs with diseases) all end up in the market. If the Chinese government was to take these diseases seriously,” Mr Liu pronounced, “the price of pork would add up to around 40 yuan ($5.86) per kilogram.”

Photo courtesy of Stella Zhou