Monday, May 9, 2011

Pork at Luxury Prices

These pigs graze on grass and wild fruit all day, listen to music, and their meat sells for 160 yuan per jin

As China's food safety scandals rock the industry, entrepreneurs are jumping in to supply high-priced foods designed to win the confidence of health-conscious consumers looking for safety and certainty.

A recent commentary on the new phenomenon of "sky-high pork," discusses some important changes in the Chinese food system. In past years, "green" and organic food came on the market at premium prices, but now a whole range of foods produced in various ways with safety and health benefits are available at sometimes outrageous prices.

The article describes the experience of Ms. Liu who went to a shop to redeem a 500-yuan gift certificate and found she could only buy about 2 jin of hormone-free spare ribs and a couple of small kidneys for that amount. Other examples are pork from pigs fed "ecological" tea leaves and Chinese medicinal herbs.

The author asserts that consumers' food safety fears distrust of poultry, egg, and meat products is "a breeding ground" for this kind of high-price pork, and it will "ultimately destroy China’s livestock industry."

The author laments that there is no assurance for consumers that these "sky-high" prices are really warranted. He asks, rhetorically, "How can you tell there are no antibiotics or hormones in 'green pork' or 'organic pork'? Is it really more healthy than common pork?"

There is no reliable government oversight of merchants offering these products. He says, "merchants use consumers' worries about pork to hype their 'concept,' ... reaping huge profits. Whether it’s really green, organic only the merchant really knows." When consumers have doubts about the products the only information they receive is promises from the merchants.

The author is also concerned that the rich may be able to pay for food safety while the common people are left to eat unreliable food supplied by "black-hearted" merchants. He worries, "I’m afraid it will be the special privilege of the rich to eat green and organic products."

Then the author asks why hormone-free pork should be more expensive in the first place. He points out that this is going back to the way pork is naturally produced, so why should it be more expensive? "Natural" should not equal "sky-high price." He points out the irony of a natural product being used to create a profitable "consumer novelty." "Who will walk the path of man-made pork," he asks.

A separate article discusses the high-tech Netease Company's plan to open a massive pig farm that the CEO, Ding Lei, has called a revolution in the industry. The Netease plan is an odd combination of high-tech industrialization and "back to nature." Pigs will be fed organic feed and taught to excrete precise amounts of manure daily in certain locations.

The Internet company plans for complete transparency and extreme traceability by putting the entire hog production process online. Farmers will be able to learn all their techniques and consumers will be able to log on to a web site to track the life of a pig from birth to slaughter. The Wall Street Journal called it a Facebook for pigs.

People in the pork industry don't think much of the plan. Professor Liu, the vice chairman of the animal husbandry association, doubts that many people really want to know that much about the life of a pig. "Even the strictest traceability systems in northern Europe don't trace individual pigs," he says. And the cost is too high.

Netease brought in a human habitat design team from the elite Tsinghua University to design the pig farm to achieve precise control of temperature and humidity, and "let pigs live a comfortable life."

The plan aims to develop Chinese breeds of pigs to break the cycle of importing European and North American breeding hogs. However, Netease is beginning with specially-selected breeds imported from Japan.

Professor Liu, who has designed 60 or 70 pig farms, is puzzled by Netease's approach. He says habitats for humans and animals are completely different. He says, "No one breeds their own hogs any more."

The Netease farm, to be opened in Zhejiang Province's Anji County, will sell pork at premium prices. It is another project aimed at testing the high end of the market.

Is Internet engineering ingenuity what the pork industry needs, or is the old-timers' skepticism justified?

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