Monday, December 30, 2019

80% Decline in Pigs in County Survey by Journalist

A journalist found swine inventories were only 5-to-20 percent of normal in 7 of 10 Chinese counties visited this month. This and several other surveys dug out of the Chinese internet reveal the degree to which hog numbers were decimated by African swine fever and the real challenges facing recovery. Facts on the ground are in sharp contrast to propaganda about rebounding production being trumpeted by Chinese news media.

The article, "Inventories have fallen again in 10 major nationally-known swine-raising counties! At the end of the year inventories have fallen 75% since June in Xiangtan, Longyan, and Qionglai" was originally published by Nong Cai Bao Dian's (农财宝典) livestock news based in Guangdong Province (the site now appears to be inaccessible). The journalist followed up an earlier report on swine numbers in these counties by checking official statistics and interviewing local industry people. The journalist described her data as "rough" estimates and emphasized that they were only for reference.

A summary of the journalists' findings are shown in the table below. Bobai county in Guangxi and Gao'an City in Jiangxi Province were hit hardest, with the stock of finishing hogs just 5-10% of normal in Bobai and 10% of normal in Gao'an. Sow numbers were just 5% of normal in those two regions. Fujian's Nanping City was least-impacted with its inventory at 70-80% of normal. Shandong's Ju'nan County has 20-50% of its normal hog inventory. Seven of the ten counties had hog inventories at 20% or less of normal. These translate to declines in swine numbers of 80-95% in most of the counties, more than double the 40-percent national decline reported by the Ministry of Agriculture and Rural Affairs.

Estimated swine inventories in 10 Chinese counties/cities, December 2019
Previous annual production (head) Current inventory as percent of normal
Province County/city Finishing hogs Sows
Guangxi Bobai County 2.2 mil 5-10% 5%
Guangdong Sihui City 1.2 mil 10% 10%
Guangdong Huazhou City na 10-20% 10-20%
Guangxi Luchuan County  1 mil 5-20% 20-25%
Shandong Ju'nan County 2 mil 20-50% 20%
Jiangxi Gao'an City 2.66 mil 10% 5%
Sichuan Qionglai City 1.38 mil 10-20% 20%
Hunan Xiangtan County 1.75 mil 20% 20%
Fujian Longyan City 4.5 mil 20-40% 20-30%
Fujian Nanping City 1.45 mil 70-80% 70-80%
Estimates by Nong Cai Bao Dian journalist Zeng Huiling.

The counties are not nationally representative. Most are in southern provinces which appear to have been hit hardest by the epidemic. Only one county in Shandong was north of the Yangtze River.
Swine-producing counties surveyed by Nong Cai Bao Dian journalist:
Numbers are current swine inventory as percent of "normal"

The reporter found that hog production has failed to revive or has even deteriorated over the last six months in a number of counties. In Guangxi's Bobai county the reporter heard that farmers were hesitant to resume pig production due to fears of a second outbreak, lack of financing, and inability to buy breeding pigs due to strict approval requirements. In Guangdong's Sihui County, the reporter heard that some farmers were receiving help from big companies in restoring production, but recovery was judged to be "not optimistic" with less than 10% of sows remaining. Huazhou in western Guangdong used to have 1,000 sow farms, but only 100 are "testing the water" with a "gambling mentality." Pigs have survived so far in Huazhou, but farms are not expanding as they maintain a cautious attitude.

In Guangxi Province's Luchuan County recovery of production is active among scaled-up farms. In Ju'nan County of Shandong Province, recovery is also limited to large-scale farms, as small and medium farms have largely quit the market due to lack of financing and inability to resist disease. In Gao'an County of Jiangxi farmers are deterred by the high price of sows and may resume production after the spring festival. In Qionglai City, Sichuan Province a pair of 2000-head farms encountered problems when they restocked their farms. The high price of piglets and fear of disease outbreaks are also cited as deterrents to farmers in Qionglai. In Longyan City, Fujian Province, there has been a lot of activity, but no real success in restoring production. In Nanping City, Fujian, the decline in production was less severe than in the other counties surveyed, but most farms have kept their herds stable between June and December.

An Internet search verified several inventory numbers reported by the journalist and one apparent error was discovered, but no official statistics could be found online for most of the counties. China conducted an agricultural census in 2017 that would provide a baseline for evaluating the impact of African swine fever, but no detailed data have been published nationally or by provinces. One exception is Longyan City's statistical bureau which published a detailed report with several tables about local pig farms.

Xiangtan County's statistics bureau surveyed the local swine industry and reported a 20-percent year-on-year decline in hog numbers and a 23-percent decline in sow numbers in the third quarter of 2019--much slower than the 80-percent declines reported by the journalist. The bureau noted that its decline was slower than an 87-percent decline in sow numbers contained in a report by a Tsinghua University professor (from 40 million at the beginning of 2018 to under 5 million in July 2019). The bureau said Xiangtan's supply and demand for pork were "balanced," but it also described local production capacity as "seriously deficient." The report said hog prices were up 230 percent from a year earlier, piglet prices were up 300 percent, and pork prices were up 270 percent. The bureau said medium and small farmers were deterred by disease risk, environmental pressures, and risk of price fluctuations. Backyard farmers had basically quit the market under disease pressure, the Xiangtan report said. Farms with 200-500 head mostly could not afford required manure treatment equipment, and larger farms needed to upgrade old facilities. Land is an obstacle to expansion. Some abandoned industrial sites are available to build pig farms, but the cost of cleaning up the sites is often prohibitive, the Xiangtan report said.

An October report by the government production cost survey team in Lin'yi Prefecture, Shandong Province found that the swine inventory in Ju'nan County had declined greatly, falling from 1 million to 526,000 hogs--broadly consistent with the journalist's report. The Lin'yi report said just 10,000 sows remained in Ju'nan County--the fewest ever.

A futures company's early-December tour of farms and slaughterhouses in Henan Province--the largest pig-producing province and a region not covered by the journalist's survey--found that small farmers had been largely forced out of business by the peak disease period between October 2018 and January 2019. The manager of a large slaughterhouse estimated that Henan's swine inventory had shrunk by 60 percent--much faster than the 40-percent reported by the province's official statistics. In some parts of Henan, inventories are estimated to have fallen by 60-to-90 percent. One 18,000-head farm lost half its herd. One nucleus breeding farm was hit hard by the epidemic and was recently bought by a farming company from south China. A manager of a large farming and slaughter company in Henan said the disease situation remained pessimistic.

Henan province experienced scattered ASF outbreaks in November 2019 that spread from north to south, wiping out about 60 percent of swine on farms with 100-to-500 head. According to the futures company report, the virus is reportedly less deadly than last year and is often mixed with other infections such as blue ear disease. Farmers in Henan are not clearing out entire farms in a panic as they did last year; instead they are culling selectively--a strategy known as "extraction." Farms have switched from grinding and mixing feed on-farm to buying complete formulated feed because they fear contaminated grain could infect their farm. noted the recent outbreak in Henan in a commentary, anticipated that disease could spread more during the winter months, and argued that extraction is only feasible for large farms while smaller scattered farms still need to be completely depopulated when there is an ASF infection.

The futures analysts' tour heard that large farms and about 20 percent of small farms have been active in reviving hog production. Small farms held about 70 percent of swine in Henan before ASF but now their share was estimated to be 30 percent. Farms began retaining gilts for breeding earlier this year and are now farrowing, but their litters are small and breeding success is about 60 percent. The success rate in restocking farms varies from 40-50 percent to 70 percent. Disease risk, cash flow, and high prices for piglets and sows are deterrents. A farm in Anyang City that lost all but 400 of its 3600 sows during the epidemic says it hopes to restore its inventory of sows and finishing hogs to 30 percent of normal in 2020. One Henan farmer said not many hog farmers have switched to raising poultry because pig farmers cannot easily adapt to the feed, techniques, and housing requirements for poultry. In another part of Henan, the futures analysts were told that 60-70 percent of farmers had switched to poultry-raising.

Slaughterhouse managers and pig traders in Henan told the futures analysts that pork demand dropped sharply as prices soared in October. One said the decline in pork price during November reflected a decline in demand, not an increase in supply. There was a bump in pork consumption as weather turned colder during December, but the slaughterhouse official is pessimistic about sales of traditional cured pork products this winter due to the high prices.

Tuesday, December 24, 2019

Poverty and Grain Concerns Top Rural Agenda

Winning the "war on poverty" is China's rural policy priority for next year, but worries about grain supplies received a surprising amount of attention at the "rural work meeting" for Chinese officials held last week. Trade with the United States does not appear to have been formally discussed, but the urgency to increase rural income and bolster profits for grain producers emphasized at the meeting appear to clash with China's commitment to import more U.S. commodities.

Officials were instructed to shore up rural infrastructure and water supplies, clean up village sanitation and housing, and improve rural education, health care, social insurance and public services. Poverty alleviation efforts are elevated as China rushes to achieve an "all-round moderately well-off (小康) society," an objective first articulated 40 years ago by Deng Xiaoping, amplified by Xi Jinping, and due to be achieved in 2020 according to communist party dogma. The party secretary of the State Council poverty alleviation office chaired this year's rural work meeting for the first time, presumably to stress the priority of anti-poverty work.

Anti-poverty efforts were prioritized in this year's "number one document" and cadres will double down on the job next year as they rush to ensure that the 2020 "well-off" objective is achieved. At a separate poverty alleviation work meeting held last week, it was reported that 2019 targets were met by reducing the impoverished population by 10 million and raising 340 counties above the poverty level. At the rural work meeting cadres were warned that they should be on guard to prevent people and places from slipping back into poverty.

Increasing rural income by moving people out of hopelessly impoverished regions and promoting rural industries are the core tasks. Companies have been instructed to help poor villagers start pig farms, fruit orchards and promote other business in impoverished areas and "actively" encourage entrepreneurs to launch business start-ups. The Agricultural Development Bank has special funds to buy up grain and cotton produced in regions targeted for poverty alleviation. Efforts will be made to create rural brands and sell products from impoverished regions via e-commerce and other new channels.

Other instructions were to "stabilize" employment of migrant workers, encourage returning migrants to start businesses and to strengthen efforts to recover their unpaid wages. These were also priorities during the 2009 economic slowdown and seem to indicate that the lower tier of workers have been hit hard by China's current economic slowdown and financial pressures on their employers.

Minister of Agriculture Han Changfu's comments on grain production at the rural work meeting suggested leaders are worried that the country's grain output is on a knife's edge. After reciting statistics about China's record grain harvest, Minister Han warned officials that grain production capacity is "still not stable." Han put officials on alert against declining earnings from grain crops and other persistent problems. In some regions, Han warned, local officials have not prioritized grain production and output has fallen.

In 2020 China will strengthen the role of grain production targets in job evaluations of provincial officials as part of the "governors' grain bag responsibility system." China will increase transfer payments to grain-producing counties, "improve" agricultural subsidy policies, continue subsidies for rice, corn and soybeans, and continue the minimum price policies for wheat and rice. The program to build high-standard fields and irrigation will move toward completion, and Han warned officials to improve monitoring and prevention capabilities to deal with probable outbreaks of fall army worms, droughts and floods. Han admonished officials to keep corn area stable as corn supply and demand become tighter, to continue the soybean revitalization plan, and actively increase supplies of high quality rice and wheat.

Officials were also instructed to accelerate the recovery of pork production, fully implement the "mayors' market basket responsibility system" for guaranteeing pork supplies, and carry out pork industry support measures. Building storage and transportation infrastructure for meat and other perishables is a related infrastructure initiative.

The collective land ownership in the countryside will be maintained, and collective property rights reform pilots will be advanced.

Saturday, December 21, 2019

What China Said about Phase I and Ag Products

China's reporting on the Phase I trade agreement's agricultural purchases from the United States has been limited to comments at a December 13 press conference made by Vice Minister of Agriculture Han Jun and other officials.

The 11-pm press conference featured sub-cabinet officials: the deputy director of the National Development and Reform Commission and vice ministers of commerce, finance, and agriculture. Officials emphasized that negotiations with the United States were based on principles of equality and mutual respect. They revealed that the agreement includes chapters addressing intellectual property rights, technology transfer, food and agricultural products, financial services, exchange rates and transparency, trade expansion, bilateral assessments, and dispute settlement. They told journalists that the text of the agreement will be released after completion of legal reviews and translation checks, and a time, place and other arrangements for signing the agreement would be determined later. They said negotiations at the working level continue and a phase II agreement depends on implementation of phase I.

The officials said nothing concrete about tariffs, only that both parties committed to withhold the tariff increases that had been scheduled for December 15 and this would be a transition from raising tariffs to lowering them. A question from Reuters--the only one not from State media outlets--about waiving 50-percent tariffs on agricultural products did not receive a direct answer.

According to NDRC Deputy Ning Jizhe, the in-depth discussions by China and the U.S. resulted in an agreement that is beneficial for resource allocation and structural adjustment in both countries. Vice Minister of Commerce and Deputy Trade Negotiator Wang Shouwen said the agreement will strengthen intellectual property right protections, improve the business environment, expand market access, and give stronger protection of legal rights for all companies operating in China, including foreign enterprises.

Ning Jizhe said China would greatly increase purchases of high-quality and market-competitive agricultural products from the U.S., but the details would not be announced until the agreement is released. Ning's references to "quality" and "market-competitive" were probably inserted to fend off challenges from other trade partners.

Vice Minister of Agriculture Han Jun gave a rundown of the agriculture part of the agreement in a 7-minute response (T.V. video and text here) to a question about whether China's agreement to import more U.S. agricultural products would harm Chinese industry. Han's remarks emphasized that China did not give up ground in the negotiations on agriculture. He reminded listeners of China's growing need for food imports, emphasized benefits for Chinese agricultural exporters, and insisted that imports would not harm Chinese farmers nor threaten "food security" objectives. Han began and ended his remarks with assurances that negotiations with the U.S. were conducted on principles of equality, mutual benefits, and "win-win cooperation," an oblique way of saying that negotiators did not sacrifice China's farmers to get an agreement with the Americans.

Vice Minister Han emphasized that Chinese negotiators had "fought to achieve actual benefits" by expanding market access for Chinese agricultural exports. Han cited the U.S. announcement that it would finalize rules to open its market to Chinese cooked chicken products and catfish as a beneficial result, noting that China is one of only three countries allowed to export catfish to the United States. Han said the United States will also announce procedures for importing Chinese fragrant pears, citrus, and dates, and the U.S. agreed to resolve the automatic detention of Chinese fish and shellfish products as soon as possible. Han described these a "breakthroughs" in solving decade-old problems.

Han said "there is no doubt" China will substantially increase its imports of U.S. agricultural products after the agreement is implemented. He recited figures showing rapid growth in China's ag imports, noted the complementarities between the U.S. and Chinese economies, and insisted that these imports will fill deficits in supply and demand and do not pose a threat to Chinese farmers.

Han gave soybeans as an example, saying China's imports account for 85 percent of China's soybean supply and estimated the import volume at "around 90 million tons" this year. Han said China will expand imports of some U.S. agricultural products that are "urgently needed to stabilize markets" in China, such as pork and poultry. He cited China's recent lifting of its ban on U.S. poultry imports. "Undoubtedly," Han said, "these imports will not put pressure on Chinese agriculture."

Han said China could import some wheat, corn, and rice from the United States after the phase I deal is implemented, but he was quick to point out that the volume of these imports would be "very limited" by tariff rate quotas. Han said imports of wheat, corn and rice would be moderate volumes that fill shortfalls in China's supply and demand. Han was quick to pledge that "national food security" would be the bottom line, insisting China would maintain its goal of basic self-sufficiency in grains and "keep the Chinese peoples' food bowls tightly in their own hands."

Han praised the agreement for addressing long-standing issues in agriculture and expressed optimism that it would lay a foundation for solving additional issues. Vice Minister Han concluded with an assessment that the agreement’s implementation will further deepen China-U.S. cooperation and strengthen the role of agriculture as a pillar in bilateral relations.

Nearly all commentary on agricultural impacts in Chinese news media regurgitated tariff numbers and excerpts from Han's remarks. One article added a paragraph with several reasons why the phase I deal would not have much impact on markets before the end of the year. Unnamed market analysts said African swine fever is expected to depress demand for corn and soybean meal through May; relatively large import volumes of sunflower seed meal is being used as a substitute in poultry feed; a release of rice reserves is substituting for corn in southern provinces; and farmers in Hebei and Henan Province have large volumes of new-crop corn on hand they will likely sell in the spring. However, the analysts also point to several other factors supporting corn and soy meal prices: declining temporary reserves of corn, low soy meal stocks held by crushing plants, and relatively low inventories of corn and soy meal held by private traders.

Sunday, December 15, 2019

Ag Minister Visits Syngenta, Huawei Labs

Huawei and ChemChina are key players in building an agricultural industry based on technological innovation, according to China's agriculture minister.

In November, the Ministry of Agriculture and Rural Affairs website featured visits by Minister Han Changfu to Beijing research centers operated by the two companies to tout China's hope for technology to overcome challenges such as pest pressures, increasingly scarce and unreliable workers, and chaotic supply chains.
Han Changfu visits Syngenta research center. Photo: Ministry of Agriculture and Rural Affairs.

Minister Han first visited a plant-breeding lab and greenhouse at a Beijing research center operated by Syngenta, the Swiss seed and agrochemical giant acquired by the State-owned China National Chemical Corporation, aka ChemChina in 2016--China's biggest-ever overseas acquisition. According to the article, Syngenta's resources have been integrated into Chinese agriculture since it was acquired by ChemChina. Han hoped the company's investments in R&D and hoped would play a role in high-quality agricultural development, attack key problems and bottlenecks, and render technical assistance to farmers.

Minister Han emphasized the central communist party leadership's keen interest in agricultural technology and institutional innovation. He praised ChemChina as a large state-owned enterprise with a long history of engagement in agriculture with many achievements, and expressed hope that the company would make a major contribution to accelerated modernization of agriculture. The Minister specifically cited ChemChina's plant protection product for wheat scab and noted the importance of addressing pest and disease risks to maintain the quantity and quality of crop production.

There was no mention of the $12-billion debt load taken on in the Syngenta acquisition that has reportedly held up a planned merger of ChemChina with Sinochem. China's ambassador to Switzerland reportedly labeled the deal a "mistake" and suggested the Swiss could have their company back if they wanted it. Nor was there discussion of how ChemChina--the country's largest pesticide and fungicide producer--would be affected by the Ministry's initiative to curb pesticide use.

Minister Han's second visit was to a Huawei R&D Center in Beijing where he learned about the prospects for utilizing 5G technology for agriculture, e-government, and big data during his visit to a "Huawei Strategic Vision Showroom." Han learned about application of 5G in Norway fish farms that use underwater UHD cameras to monitor the fish, increasing the precision of management and reducing personnel requirements. A second example was the use of blockchain in a pilot traceability project for rice in Jilin Province.

Han envisions Huawei as a leader in "smart" agriculture, internet of things, and rural data platforms. He asserted that "rural revitalization" cannot be achieved without informatization, artificial intelligence, and big data in agriculture. This all assumes that the workers remember to turn the machines on and replace the batteries, the electricity doesn't go out, everyone knows how to interpret the data on the screens, and the drones don't get stuck in the trees.

Saturday, December 14, 2019

China's Plan to Restore Pork Supplies by 2021

Chinese officials plan to restore normal pork production by 2021 via a crash farm-building campaign and other measures that include ordering local officials to ensure local pork self-sufficiency, reconfiguring the slaughter industry, and setting up rigid pork supply pipelines. At the same time, officials plan to address chronic problems by shoring up disease prevention and dotting the countryside with tanks to collect millions of tons of manure and diseased carcasses.

The Ministry of Agriculture and Rural Affairs circular, "Three-year plan to speed up recovery of hog production" issued on December 4 calls for achieving a small rebound in pork output by the end of 2019, rebuilding production capacity by the end of 2020, and restoring normal pork supplies in 2021.

The announcement aimed to impress local officials with the program's importance by citing Xi Jinping's many "important directives and instructions" and "clear requirements" issued by Li Keqiang. It follows a series of teleconferences and meetings where farmers in the northeastern region were instructed to resume producing pigs and southern provinces were ordered to "stop the decline as soon as possible," and "consultations" were held with leaders of important pig-producing provinces. The news media have been ordered to write articles that restore the confidence of pig farmers by reporting on effectiveness of government policies and giving examples of successful recovery.

At a November 30 national livestock work conference, Vice Premier Hu Chunhua proclaimed that restoring pork supply would be a top priority of this year's rural work, declared that China must rely on domestic production for its pork needs, and ordered local officials to develop the livestock industry. The Vice Premier chaired a December 1 "market basket responsibility system" meeting where he ordered city leaders to strive for at least 70% local self-sufficiency in pork and develop arrangements with pig-producing counties to fill the balance of city pork supplies. Pork surpluses are envisioned in northeastern provinces, the north China plain, and south central provinces. The southwestern and northwestern provinces are expected to be self-sufficient in pork. Marketing will shift from transporting pigs to transporting pork.

Local officials were warned that the task of restoring pork supplies is "extremely huge" and pork production still faces many difficulties and challenges. Local officials were admonished to strengthen their "sense of responsibility and sense of urgency" and to "do everything possible" to increase pork production by the end of the year and to ensure pork supplies for the new year, spring festival, and "two meetings" of communist party leaders in March.

Officials were sternly warned to take seriously 18 policy support measures, getting a "firm grasp" on pork production in the same way officials "firmly grasp grain production." The policy measures are an impossibly broad set of objectives: build "standardized" pigs farms, shut down sub-standard slaughter facilities, stop feeding restaurant waste to pigs, build modern slaughterhouses in production areas, prevent disease, and protect the environment.

The key tasks for the hog production recovery are summarized as follows:
  1. Start building farm projects before the end of the year using this year's subsidy funds and use 2020 funds to build projects and rush them into production as soon as possible. 
  2. Order local officials to subsidize purchases of automated feeding equipment, and equipment for environmental control, disease prevention and control, and waste treatment using the agricultural machinery and equipment subsidy program.
  3. Loosen bans on using farmland to build pig farms, waive the approval process for using village "construction land" for pig farms, and otherwise simplify land approvals.
  4. Use hog county transfer payments to fund industry development, veterinary services, and marketing infrastructure. Issue ASF culling payments promptly. 
  5. Expand a collateral loan pilot, issue subsidized working capital and construction loans for breeding farms and large-scale farms. Expand insurance for sows and finishing hogs. 
  6. Create 120 replicable high quality demonstration farms to upgrade production. 
  7. Choose 1 or 2 localities for pork-based poverty alleviation projects in provinces of Hunan, Hubei, Guangdong, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, and Shaanxi. Companies will collaborate with small and medium-scale farmers to expand pork output.
  8. Urge local officials to ease up on local environmental bans on livestock farms by the end of the year and order local officials to stop declaring "pig-free" cities and counties.
  9. Carry out environmental impact assessment of pig farms. Utilize an automated system and let farms of 5000 head or more start construction without having to wait for the final approval. 
  10. Monitor disease and movements of pigs, stop feeding kitchen waste to pigs, pay out culling funds. 
  11. Urge farmers to take responsibility for disease prevention by implementing isolation, chemical disinfection, biological immunity, and complete a "farm animal disease cleanup project." Support third-party testing and slaughter plant self-testing.
  12. Regularize disease reporting, encourage farmers to inspect animals and promptly report disease. Punish concealment and intentional delays in reporting, false reports, and especially obstruction of reporting by others. Set up a reward hotline for ASF reporting. 
  13. Urge localities to set up a complete province- and city-level animal disease administration, strengthen city and county veterinary lab capacity, launch and fund standardized grass roots animal disease prevention organizations, strengthen disease emergency team construction, fill in gaps in disease organization and personnel asap. In big livestock farming counties carry out a special employment plan for disease prevention personnel; employ 10,000 or so personnel.
  14. Collect manure and utilize it. Set up centralized collection or facilities near fields. Solve the manure treatment problem for small and medium farms. By the end of 2020, raise the national livestock and poultry manure utilization rate to 75% or higher, and 95% of scaled-up farms should have manure treatment infrastructure and equipment.
  15. Create a system of collection points for safely disposing of diseased hog carcasses. Design a spatial layout of disposal enterprises, ensure biosecurity in collection, transportation, and disposal of carcasses, distribute support funds and ensure the sustained operations of the disposal system.
  16. Regulate and standardize hog slaughter. Shift slaughter enterprises to major production regions in the northeast, Huang-Huai region of northern provinces, and south central provinces. Starting from the current 5,000 slaughter enterprises, rectify small slaughter points and create 100 demonstration slaughter enterprises by 2020. Ensure that it becomes normal for slaughter facilities to carry out self-inspection of hogs and to have veterinary inspectors posted in facilities.
  17. Strengthen R&D and technical services to farmers. Increase effort in ASF vaccine development. Demonstrate ASF control methods, promote use of effective control methods on large scale farms. Implement the subsidy for use of improved breeds and increase use of artificial insemination. Bring into play veterinary and livestock bureaucracy, industry associations, and a hog technology organization to increase farmer training and visits.
  18. Promote direct links between production and sales areas. Urge net-deficit cities and coastal regions to maximize self-sufficiency and to form direct coordinated links with production regions to fill pork deficits. Adopt a "farm-slaughter link, direct supply" system, use a pilot electronic system to transmit animal inspection certificates and collect statistics monitoring pig movements. Ensure orderly marketing and transport of pigs using a point-to-point marketing system. 
Many of the measures aim to revive rigidities of the planned-economy: regional production quotas, fixed supply pipelines between regions and enterprises, Potemkin-style "model" farms and slaughterhouses, plans to populate an inspection and veterinary system with warm bodies, "point-to-point" transportation of pigs. Imposing rigidities of the planned economy will undermine the efficiency of China's pork industry which has been one of the country's most-privatized, agile, and flexible sectors. Officials chasing subsidies and responding to directives will eclipse problem-solving entrepreneurs, leaving the countryside dotted with derelict barns, underused slaughterhouses, and rusting equipment.

Most of these programs will probably atrophy within a few years as did these now-forgotten initiatives:
  • a sow subsidy introduced in 2007 to induce farmers to keep their sows during downturns disappeared as cyclical gyrations it was designed to address just got worse.
  • a 2009 hog price stabilization program with an elaborate system of statistical reports and price ratios with red-yellow-green zones to trigger sales of pork reserves and subsidies--also intended to eliminate price gyrations--is now mostly forgotten except for monthly reports of pig inventories, slaughter, and the hog-corn price ratio.
  • a 2010 Ministry of Commerce plan to reconfigure the hog slaughter layout by eliminating half of "backward" capacity and building a hierarchy of city, county and township facilities was issued and quickly forgotten. Responsibility for slaughter oversight was handed to the Ministry of Agriculture a few years later.
  • in 2011 all veterinary technicians had to take an examination to weed out unqualified people and provinces were ordered to include funding for county veterinary services in their budgets, yet poor or nonexistent local veterinary services were one of the reasons for the lightning-fast spread of African swine fever to every single province in half a year. 
Officials are also asking everyone to forget the series of laws, initiatives and action plans to close polluting pig farms that were the focus of hog industry policy during 2013-18 as a part of an environmental clean-up program--one of Xi Jinping's signature policies--and to build pig farms everywhere, as fast as possible.

And, of course, the news media are tasked with reporting nothing but good news about pork, so news media and statisticians have doubled down on their propaganda function and can no longer be believed. Rare honest assessments of the actual supply and demand situation are swamped by a flood of propaganda.

Wednesday, December 11, 2019

China-Africa: "Huge" Ag Cooperation Potential

China hosted African agricultural leaders for a forum this week where Chinese officials pledged to expand and deepen cooperation, investment, and trade with African agriculture over the next 3 years.
Photo from China Ministry of Agriculture and Rural Affairs.
According to China's Ministry of Agriculture and Rural Affairs, 500 representatives from African countries and international organizations attended the meeting hosted by the Ministry and the Hainan Provincial Government in the provincial capital of Sanya, December 9. Attendees heard speeches from China's Minister and Vice Minister of Agriculture and Rural Affairs, the Hainan governor, and African leaders. China's ag minister emphasized the "huge potential" for China-Africa cooperation in agriculture in the "new era" proclaimed by Xi Jinping. The focus of cooperation will be on food security, poverty alleviation, agricultural science and technology, agricultural modernization, and giving developing countries a stronger "voice" in global food and agricultural governance.

China's ag minister pledged to:
  • expand investment in Africa by Chinese companies
  • build demonstration farms
  • expand cooperation with African research centers 
  • host African technicians for 10,000 trainings in the next 3 years 
  • boost annual China-Africa agricultural trade to $10 billion within a decade from its current level of $6.9 billion
  • achieve basic food security for Africa by 2030
China's ag ministry signed a memorandum of understanding with the African Union Commission and the African Green Revolution Alliance. A "Sanya Declaration" calling for greater China-Africa agricultural cooperation was issued, and 11 project agreements were signed by government departments, international organizations, research units, and companies. 

According to China's ag minister,
  • China's agricultural trade with Africa expanded more than 10-fold from 2000 to 2018
  • Chinese enterprises have invested 15 billion yuan in Africa
  • China has 115 agricultural projects valued at $5 million or more in two-thirds of African countries
  • Chinese agricultural research institutes have agreements with African counterparts in 12 countries, and they send experts to Africa for 10,000 person-visits each year
  • China has agricultural demonstration centers in 19 African countries
  • There are 10 South-South research projects in African countries and over 300 agricultural experimental trial
The Chinese ag minister also met with delegations from African countries individually before the meeting. In his meeting with the South African delegation, he remarked that China's cooperation with South Africa is a model for further deepening. The Chinese minister remarked that he had recently attended the 10th anniversary of China-Africa FAO South-South Cooperation held in Uganda. The South African Minister of Land Reform and Rural Development expressed interest in collaboration on plant diseases.