Chinese officials have been struggling to bring order from "chaos" in the hog slaughtering business for many years. An article posted on several electronic bulletin boards describes the situation in Ye County, a major hog production area in central Henan Province. I haven't been able to discover the original source of the article, so it's veracity may be questionable--but there seem to be a lot of articles referring to chaos in hog slaughtering.
The article says there has been a lot of attention to food safety in recent years as living standards have risen. Pork is one of the main food safety concerns. It's by far the most commonly-consumed meat and the government has been struggling to control several persisent problems: (1) selling pork from sick pigs, (2) pumping water (potentially contaminated) into pigs to increase their weight before slaughter, (3) other substances or feed additives like veterinary drugs and steroids in the pork.
Regulations now try to concentrate hog slaughter in fewer, larger, cleaner designated slaughtering plants, preferably with shiny imported automated production lines. The article says that local regulations have done a fairly good job at this in cities, but this approach doesn't work well in the far-flung rural areas.
In August 2008, Ye County shifted its slaughter house oversight from the county animal husbandry bureau to the commercial bureau, which set up a county slaughter management inspection team, implementing the “one point for each county, unified distribution” slaughter management plan. However, since the county is so big (18 townships, 578 administrative villages) and the inspection team is too small (10 people), there are still many incidents where merchants violate the law, and administration and enforcement is very hard.
The reporter learned that most rural townships in Ye County do not have designated slaughterhouses. Townships close to the county seat have a single distribution center for pork. But most townships are too far from the county seat for timely delivery from the designated slaughter points.
He discovered that pork merchants in distant counties slaughter pork themselves at home. None of the pork for sale in those places has passed through a designated slaughterhouse, nor has it gotten a stamp from animal health inspection officials. The reporter heard from a pork merchant at Denglixiang: “In my home I had more than 10 sick pigs recently, all of them will probably die soon and I will have to sell them at a low price.”
According to this merchant: “As long as pigs are not dead, they can be sold, just at a relatively low price. As for pigs that are nearly dead--you take them home, use a knife to bleed them out, then the meat is not so red.”
The reporter asked, “How do you deal with sick pigs you have bought?”
This merchant replied, “It’s mixed together with good meat and sold. After cooking it, people generally can eat pork from sick pigs with no problem.”
The reporter recounts visiting a slaughterhouse called the Ye County Food Co. and seeing a man bringing a sick pig into the factory on the back of his three-wheeled bicycle. He asked the company how such a pig could pass official health inspection. But company officials said they turned the pig away and told the man to take the pig back home.
In another township a dealer told the reporter: “In fact, we don’t want to butcher the meat at home. It’s dirty and hard work and doesn’t earn much money. Pork delivered from [legitimate] wholesale food companies costs less than 6 yuan per 500g. but that pork arrives with water constantly dripping off it. People are afraid to eat such pork because the pigs may have had water pumped into them.”
The reporter found that slaughter houses ignored regulated prices. The local price and finance bureaus set the price for slaughtering hogs at 21 yuan (about $3) per head within the county city limits and 27 yuan (about $4) in rural townships. The reporter found that the Ye County Food Company charges 40 yuan and keeps the entrails (It's common practice for the butcher to keep entrails). Moreover, they don't issue receipts. The underground butchers said it costs them 6 yuan per head to slaughter at home.
A 2004 article from "Anhui Economic News" says slaughter houses are still just “one room, one pot, one knife.” This article complained about a practice called "Yi bao, dai guan" (“以包代管”--please let me know what this is if you know) which seems to entail local regulators letting companies enforce regulations on themselves. In Anhui, it involves paying a fixed amount of tax monthly without tying it to the number of hogs actually slaughtered. In Bozhou City, most slaughter points use this method, which leads to underreporting of pigs by slaughterhouses and loss of tax collection [but doesn't explain why]. In one county, the article estimates that 8 million yuan in tax revenue are lost annually.
Under "Yi bao, dai guan," slaughterhouses turn in a single receipt to township tax authorities monthly that has no indication of the number of head slaughtered. There is no way for health inspectors to verify whether pork came from an authorized slaughterhouse or an underground butcher.
In Bozhou, few slaughterhouses can meet the requirements to be a designated slaughterhouse. Most are just one room, one pot [for collecting blood?], and one knife. Only a few slaughterhouses in the prefecture are semi-mechanized. Hardly any can meet the requirements: cement floor, tiled walls, separate holding rooms for live pigs and slaughter, separate rooms for "emergency" and isolating sick pigs, a collection pool for waste, water treatment equipment, and "showers and disinfecting equipment are out of the question."
The Bozhou City trade commission organized a city-wide health, commerce, agriculture, and police joint inspection team which concluded that the market was extremely chaotic, and the central government’s 16-character “designated slaughter point, centralized inspection, unified tax collection, decentralized management” guidelines have become empty words.