Chinese path to stability

The strong fluctuations in the pork market in China in recent years, with unforeseen consequences for market supply and prices in the future, will become a thing of the past. With the approval of the Party Central Committee and the State Council, the Ministry of Agriculture issued a "Statement on Promoting the Sustainable and Healthy Development of the Pig Sector" in early August. This charts the path to the desired sustainable production based on five basic principles.  

First, the pork sector must be "market oriented" and strong cyclical fluctuations must be mitigated through counter-cyclical measures such as maintaining supply volumes or changing stocks. The goal is to create a high-quality pig industry within five to ten years with high productivity, product safety and competitiveness while conserving resources and the environment. For reliability of supply, a self-sufficiency level of at least 95 percent is planned.

The second principle was, first of all, promotion policy measures. Banks, for example, should support the expansion of pig farming through loans and offer producers insurance policies or income insurance. 

The counter-cyclical regulatory mechanisms described in the third principle of sector development should play a central role in sustainable pig production. For example, if the monthly number of sows deviates by 5 percent compared to the same month of the previous year, an early warning must be given, after which appropriate measures are taken to maintain the number of sows. Pig farms with more than 500 pigs should be included in the provincial monitoring system to better estimate production capacity. Large farms with more than 10,000 animals must be registered at the national level. If the number of sows falls by more than 10 percent compared to the level of the previous year, provinces can help large farms with one-time temporary grants to restore production. In this regard, the People's BankChina should support local financial institutions with loans to help manufacturers.

In order to monitor production fluctuations, the fourth section of the statement calls on the provinces to create an information platform for the entire pig value chain. The resulting data should be published as an early warning and emergency system and thus "govern" the market. This database should also include the results of monitoring measures to control animal diseases such as African swine fever (ASF) or foot and mouth disease. Important measures to stabilize the market in the fourth stage also include the purchase and sale of pork from the state reserve and storage facilities, which are designed to mitigate market price fluctuations.

Ultimately, the further modernization of the pig industry is the stated goal of the Beijing government. The fifth principle includes measures such as replacing traditional methods of pig breeding with modern production methods on small farms, promoting the purchase of agricultural machinery or automatic feeding systems, and measures to optimize the slaughter and processing of pigs. Sales as well as refrigeration and supply chains for pork should also be improved so that fewer live animals are moved around the country for disease prevention reasons.