Local environmental authorities have blocked construction of an industrialized chicken complex planned for a rural county in China's Shaanxi Province. Since when do environmental bureaus in rural counties block big-money projects backed by the county chief? Is this China's "new normal"? Or has the company put the project on hold until the poultry industry recovers?
According to a December 2, 2014 report from China's Daily Business News, the country's largest feed manufacturer, New Hope-Liuhe Group, planned to invest 860 million yuan (about $40 million) to build a feed-chicken industrial complex in Fufeng County in Shaanxi Province, about midway between Xi'an and Baoji city. According to the county government's description, the project was to include a feed mill producing 300,000 metric tons of feed annually, a hatchery to supply chicks to farmers, a model commercial chicken-farming base, a slaughter plant that could process 36 million chickens each year, a company to guarantee loans for farmers, and a processing plant to make health supplements. This was the biggest investment attracted by the county government, the head of the county's communist party committee strongly endorsed it and promised policy support and guidance.
Daily Business News reported that the site selected for the slaughter plant was rejected by the county environmental protection bureau because of its potential effect on water quality in the Wei River. The exact reason is not entirely clear. The site was too close to water-monitoring equipment in the river. If I understand correctly, the treated effluent from the plant would not be diluted enough for the water to meet quality standards. A spokesperson for the feed company gave a conflicting explanation, saying the site was turned down because it was too close to the highway on one side, and too close to a village on the other side.
Since the rejection 20 months ago, the environmental protection bureau has not received a new application from the company for a site approval. Company officials say they are still looking for an alternate site, but none has been found. They say they are no longer promoting the project. The slaughter plant was central to the project. The feed mill has already been built, but with no slaughter plant the feed will have to be sold elsewhere.
This news that a county environmental protection bureau blocked a projected backed by the county chief is remarkable. China's environmental protection authorities are known for going along with authorities on investment projects. Normally a work-around can be found, such as moving the water quality monitoring station upstream.
Or, maybe the project is no longer feasible. Chicken demand went south after two avian influenza scares the last two year and feed prices are sky-high, so maybe environmental regulations are an excuse to cancel an unprofitable project...
The story brings into focus the conflicting priorities of the current Chinese leadership. On one hand, they are saying that they will transition from single-minded pursuit of GDP growth to a better quality of life for citizens, including attention to environmental protection. On the other hand, the authorities are beating the drum for "modern agriculture" and "agricultural industrialization" and concern about food safety is pushing poultry production toward such company-controlled fully-integrated projects like this.
If such a project can't be built in China's Shaanxi outback where officials are still eager for investment, where can it be built?