A May article in Economic Information reported that many Chinese hog farmers throw away free vaccines distributed by the government because the medicines often don't work and have bad side effects. Instead, farmers who want to protect their hogs from disease buy vaccines from the black market.
A technician working on a hog farm told the reporter, “Free distribution of foot and mouth vaccines to hog farms is a very good thing for us. However, the free vaccines are either never received or thrown away."
The technician explained that the quality of the vaccines is poor. They don’t protect the pigs and they have bad side effects, inducing abortions by sows and sometimes even spreading blue ear disease.
The Chinese government requires farmers to vaccinate their pigs against foot and mouth disease, blue ear disease and swine fever. The government procures these vaccines from companies that bid to become suppliers to the program. The vaccines are distributed free of charge to farmers, passing through a multi-level distribution system: from province to county to township to village to farms.
There are at least three reasons for the poor quality of the vaccines. One is that companies who win the bidding contest earn low profits, so they reduce the amount of active ingredient in the vaccines or use shoddy ingredients to cut costs. A second reason is that vaccines can deteriorate in the long distribution chain from factory to farm. It takes a long time for vaccines to reach the farmers and there are no proper refrigerated storage facilities at some steps of the distribution chain. A third reason is that companies producing the free vaccine follow government standards. These are often outdated and not effective against new strains of virus that are appearing.
The boss of a hog farm in Henan told the reporter about an industry meeting last year where one farmer loudly complained that his hogs were always sick and dying; he asked in exasperation whether there are any effective vaccines.
Foot and mouth is one of the most feared diseases on hog farms because it can easily spread to the entire farm with devastating losses. Farmers told the reporter that some large and medium-scale hog farms buy smuggled foreign vaccines that cost 10 times more.
The boss of one large hog farm in Beijing said he spent 1 million yuan on black market vaccines last year. He explained his predicament: "What could I do? The free foot and mouth vaccines are not effective and they have many side effects. Farmers would like to use free vaccines, but they buy black market vaccines to avoid the heavy losses from a disease outbreak."
Another farmer in Guizhou said he was initially afraid of buying black market vaccines that could be fake, but he was so worried about the cost of a disease outbreak that he spent over 100,000 yuan to buy black market vaccine from Guangxi Province which was clearly much more effective than the free vaccine. He later went back to the agent to buy more.
In Guizhou, a farmer said that agents selling black market vaccine call up farmers. When farmers hear that a particular vaccine is effective it spreads rapidly and farmers pay a premium to get it. Some can't get it even at a high price.
Some hog farmers think the black market in vaccine is running rampant. Foreign vaccine comes into China through three routes: Hong Kong-Guangdong, Vietnam-Guangxi, and Taiwan-Zhuhai.
In a Southern Rural News article earlier this month a reporter interviewed the vice chairman of a company that sells two types of vaccine for the Myanmar 98 strain of foot and mouth disease. One type is sold to the government, but another type sold directly to large hog farms has a higher concentration of the active ingredient and more advanced technology.
The government's vaccine program operates like the old central-planning system. The government designates 7 companies to produce foot and mouth vaccine. The entire production and sales process is planned. Companies report up to each level of government the volume produced, and products are then passed down level by level to veterinary stations.
The central government subsidizes 80% of the cost for western provinces, 60% for central provinces, and 30% for coastal provinces. The rest of the cost is picked up by the province or local government. Vaccines and subsidies are distributed based on the number of hogs reported by local authorities.
Regions where the central government pays most of the vaccine cost naturally tend to over-report the number of hogs to get more subsidies. In places where local governments pay most of the vaccine cost (like the area surrounding Guangzhou), the number of hogs reported is understated.
One city official in Guangdong said, "We all generally take last year's statistics and reduce them by one-third."
The result is that free vaccines are under-supplied to regions where local governments pay most of the vaccine cost, and there isn't enough vaccine to go around. In regions where the central government pays most of the cost, there is more vaccine than farms can use.
In Guangdong, where local government pays most of the cost, industry people estimate that the government-procured vaccines meet about 40% of the province's need for foot and mouth vaccinations.
According to one veterinary station, they distribute free vaccines mainly to small-scale farmers. Many of the large farms receive the vaccines as a "political task," then throw them away.