Viet Nam News
These days, the term “save the pigs” has appeared in many local newspapers, as the price of live pigs has dropped to a record low, causing major losses for farmers across the country. Việt Nam News spoke with the leaders of three state management agencies about the causes of the downward pressure on prices as well short-term and long-term solutions to help the struggling pig-farming industry recover.
Nguyễn Xuân Dương, Deputy Director of the Ministry of Agriculture and Rural Development’s (MARD’s) Animal Husbandry Department:
Nguyễn Xuân Dương
It can be said that there are many factors leading to the current crisis in the pig-farming industry. However, the underlying cause is the ideology of small-scale production, mainly among the animal husbandry households.
A crucial factor is that Vietnamese pig farmers look solely at the Chinese market which accepts pigs weighing more than 120kg, bringing large benefits to the farmers. So when the Chinese halt purchases, the breeders face difficulties in exporting to other markets or even ensuring local consumption.
Even pig exports have been hit due to various challenges in recent years, but the farmers have not reduced the size of their herds, leading to an oversupply problem.
The pig-raising households assume the problem will never happen to them, even though they were warned by MARD after they produced an oversupply in the last few years.
Another issue is that we are unable to expand to other foreign markets for export.
Pigs account for 70 per cent of the animal husbandry structure in Việt Nam, while pork accounts for 70 per cent of food consumption among the Vietnamese. Meanwhile, investment in pigs is typically high. For example, a sow is priced at between VNĐ15 and VNĐ30 million (between US$700 and $1,400) and the length of productive sow life is three years.
Due to the long pig cycle, it is difficult to recover in the livestock industry, which can lead to a shortage of pork in the future.
In terms of solutions, MARD is applying several measures to curb the current oversupply. The ministry has instructed localities across the country to review pig-farming planning to meet the demand and potential of each region, asking them to not issue licences for new animal-feed procession facilities as the current production is 31 million tonnes per year, far higher than the target of 25 million tonnes by 2025.
Another radical solution is to enhance the establishment of links between farmers, co-operatives and enterprises. If these links are strengthened, food hygiene and safety can be controlled, while the demand and supply of pork can be adjusted.
Additionally, the husbandary sector in many other countries handle oversupply issues by maintaining vast cold storage units, but Việt Nam only relies on the cold storage units held by each enterprise. Recently, MARD’s minister, Nguyễn Xuân Cường, asked all cities and provinces to persuade pig slaughterhouses and processors to keep buying pigs and keep them in cold storage or process the meat.
Under the current situation, enterprises should also prepare for the potential pork market that will arise for lunar New Year (Tết) 2018, as the farmers may thin their pig herds, leading to a decline in supply during Tết.
Further, this month, MARD will send a working team to China to discuss the export quota of Vietnamese agricultural products, including pigs and pork. Since late last year, we have been working with the Chinese side to enhance the consumption of agricultural products between the two countries. However, more time is needed to reach an agreement on the export quota as China’s demands for hygiene and quality follow international standards.
Long-term solutions involve plans to reduce the livestock inventory from the current 4.2 million sows to three million by 2019 and call on breeders to raise pigs that generate high yield or special ones that suit certain groups of customers.
Trần Duy Khanh, Vice Chairman and General Secretary of Việt Nam Poultry Association:
Trần Duy Khanh
The precipitous drop in the price of live pigs shows that the supply is greater than the demand. In my opinion, the industry is facing this oversupply mainly due to the lack of a long-term production plan from the management agency. MARD has been urging the farmers to apply the latest production technology, while consumption has been assigned to the Ministry of Trade. In other words, the input and output of the industry are managed by two different ministries, which lead the households and enterprises to adjust their production by themselves.
I think the State needs to support farmers in finding new markets, as I have already mentioned that we lack market regulation by the State. That is why the price last month was VNĐ15,000-25,000 (between $0.7 and $1.1) per live pig, while pork was sold for between VNĐ80,000 and VND90,000 per kilogramme.
The live pig price has fallen from its earlier price of VNĐ31,000-33,000 per kilogramme before Tết and from VNĐ43,000-45,000 per kilogramme one year ago, while the production cost is VNĐ37,000 per kilogramme.
Tạ Văn Tường, Director of Hà Nội Animal Husbandry Development Centre:
Tạ Văn Tường
Much has been done to establish the supply chain link in the livestock industry to sell hygienic foods with traceable origins to help the farmers and bring products to consumers. We now have nine links for pork, selling dozens of tonnes of pork every day.
Thanks to the link between the farmers and the retail network, many unnecessary intermediaries have been eliminated.
Additionally, I think cold storage is very important for resolving the oversupply situation. Our centre has called on chain enterprises to introduce the products of chilled meat and frozen meat to customers.
The centre has also introduced the products from its chain to various supermarkets, street stores, canteens and food processors to find the right outlet for the farming households.
We consider this a revolution because if we can eradicate the situation of consuming pigs slaughtered daily, the animal husbandry industry will not suffer from the pressure of providing minor outlets for the traders. Instead, farmers will have the right conditions for applying technology in raising pigs, improvements in the quality and quantity of their products, and reduced costs. This is also an important condition for organising high-tech farming, as other developed nations supply their customers a variety of high-quality products. — VNS