Tuesday, January 20, 2015

Chinese Livestock Industry: 7 Challenges

At a recent meeting of China's livestock industry association, a Ministry of Agriculture official proclaimed that the industry faces seven challenges as it enters a critical period of upgrading.

Vice Director Wang Zongli of the Ministry's livestock industry office offers a candid assessment of the livestock industry that mostly echoes the party line of upgrading and modernizing agriculture. His first challenge is the "tight supply-demand balance" for Chinese livestock products. He says improvements in living standards, urbanization, and population growth are boosting demand for livestock products. Production of livestock is outstripping the country's water, land and feed resources. Wang highlights an insufficient supply of high-protein feeds, reflected by soybean imports which surged to 63 mmt during 2013 and accounted for 80% of the Chinese soybean supply. He says the growth rate of livestock has accelerated, putting more and more pressure on supply.

Challenge two is cost pressure. Labor costs, raw material prices, water and electricity costs are all rising.

Third, Wang says the animal disease prevention and control situation is still "grim." There are still many disease outbreaks. Disease prevention and control organizations are not good enough. Disease problems affect consumers and hurt the confidence of livestock producers, says Wang.

Fourth, there are persistent hidden dangers in livestock quality and safety. Quality and safety is a major responsibility that influences public health. Wang says there have been exaggerations in the news media and "malicious speculation", but the news reports do reflect problems in the industry. Wang sees the low education, low awareness of laws and regulations and lack of integrity among livestock industry workers as a core problem. People employed in livestock farming, Wang asserts, are mainly low-educated laborers who are unable to distinguish fake feed and veterinary products. He says enforcement of regulations is poor and some people knowingly manufacture, sell, and use substances that are expressly forbidden by the government. Wang complains that there are still 54 million hog producers and 61% of hogs are supplied by small operations producing 500 or fewer head. The United States has only 70,000 hog farms, he says, and just 3.5% of hogs come from small farms.

Fifth, Wang worries that the Chinese breeding system is lagging behind. Quality breeds of swine, dairy cattle and poultry nearly all depend on infusions of imported breeding stock. He says one sow can supply 1800 kg of pork in developed countries, but only 1016 kg in China. Wang calls for linking up companies with research institutes as soon as possible to improve China's ability to supply breeding stock.

The sixth challenge is the increased prominence of environmental pollution. Wang identifies three problems. The number of livestock farms exceeds environmental capacity, crop and livestock production are not linked closely enough, and technology for waste treatment is lagging. He cites statistics from the 2007 national pollution census which showed 41.9% of chemical oxygen demand (water pollution) came from livestock and poultry waste. Now regulations governing livestock and poultry waste emissions are more strict.

Seventh, Wang is concerned that science and technology does not make a large enough contribution to livestock output growth. He says China has done pretty well at importing better breeds and adopting general science and technological achievements to increase output. However, China is weak at improving quality, lags behind in technology for environmental protection, doesn't develop indigenous technologies and fails to make scientific breakthroughs. Furthermore, Wang complains that scientific research is not linked with extension, so achievements are not disseminated to producers.

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