Is China's pig sector developing too fast?

The Xinguangan site will cover 73 hectares and will house more than 10.000 sows by the end of the year. They must then produce 280.000 piglets or 20.000 tons of pork annually. A project that is quite large even by American standards.

Not the only project
The project in Xinguangan is one of many large-scale projects being set up in China this year. The country wants to get rid of 'small family farms', where the pigsty is in the backyard. Instead, automated, intensive and modern pig farms similar to those in the United States should be established.

Some analysts expect China to set up several hundred companies this year. The number of sows in each of these stables will be between 5.000 and 8.000. This development (of larger agricultural companies) opens the door to a more advanced market. In response, China approved a pig contract earlier this week (week 6) to help farmers hedge price risks.

(Text continues below the photo)It is expected that China will set up several hundred pig farms this year.

Doubts about switching
However, there are certainly doubts about the speed at which China is moving from age-old traditions to advanced industrial production. This is because there is a shortage of experienced employees in China and because there is a high risk of diseases. “Industrialization has never been so great,” says Martin Jensen of Carthage & MHJ Agritech Consulting. Channel News Asia. This company manages a number of large-scale farms in China.

The choice for this development is made because 'small family businesses' cannot meet the new environmental standards. Large-scale, modern pig farms are a solution for this. With the help of new methods and genetics, productivity can be increased and costs can be reduced. Experts say that increased productivity will tame the volatility of pork prices in China, raise food safety standards and help improve the environment.

In the long term, it could improve the position of Chinese pork producers in the international market. This is because they can compete in terms of quality, price and food safety standards. "As the number of large companies increases, food safety standards will increase and costs will decrease. This will increase China's competitiveness and the country is likely to enter the export market," said Fang Shijun, chief researcher at research firm Huitong Data. On Channel News Asia.

New policy
Modernizing China's pig sector is a major undertaking. More than half of the nearly 700 million pigs are produced on family farms, which slaughter fewer than 500 pigs per year. Although most companies have already switched to protein-rich feed products, a large proportion are still lagging behind Western companies. This is mainly because the costs for this feed are high, because the country is dependent on imported soybeans.

(Text continues below the photo)A large proportion of family farms lag behind Western pig farms.

In 2017, the policy on environmental pollution from the agricultural sector was intensified. As a result, hundreds of thousands of pig farms had to close their doors. Many of these were small farms, which had no opportunity to build waste processing plants.

Genetics is becoming more important
The imported genetics also contribute to productivity. The country imported breeding pigs from the United Kingdom, Canada, France and the United States. These pigs produce a higher number of piglets per litter. In addition, they have more lean meat and grow faster than the native breeds.

Genus, which sells its pigs to companies like those in Xinguangan, reported seeing an 2017% increase in profits in 80. This only concerns the Chinese market. For example, in 2017 it acquired a customer who wants to build a number of sow farms this year, for which he needs 35.000 young sows. This gives a clear picture of the development that is currently taking place.

Many pitfalls
The speed at which China is currently transitioning creates many potential pitfalls. Preventing diseases is a major challenge. Diseases that have long been eradicated in other countries still appear in China. In addition, the risk of infection is higher due to the large number of animals living in close proximity to the population. Once such an animal disease enters the farm, it can kill hundreds of animals in just a few days.

The company in Xinguangan therefore takes extreme measures to keep animal diseases at bay. One of these measures is that employees spend 48 hours in quarantine before they are allowed to enter the pig farm. The employees live at the production location for days at a time, so as not to become infected outside the workplace.

The shortage of skilled workers was already mentioned earlier. This is perhaps the biggest pitfall for the country. “Most employees at the company in Xinguangan have graduated from university, but awareness of animal health is still low,” Hong Haozhou, veterinarian at Carthage & MHJ Agritech, told Channel News Asia.