Vice Premier: Pork Shortages Must Not Spoil the Party

Chinese officials are worried that a 10-million-ton pork shortage could spoil upcoming communist party celebrations, according to a transcript of a speech ordering local officials to bolster pork supplies. In fact, the speech's instructions to "manage public opinion" and constant shifting of priorities of the communist regime suggest the celebrations may ring hollow anyway.

As the country's year-old African swine fever epidemic began to send pork prices into the stratosphere this summer, the government's rhetoric gradually shifted from admonitions to stop the spread of the disease to pronouncements that the disease is "under control" and commands to restore "normal" production and trade. On August 20-21, Premier Li Keqiang visited food markets and chaired a State Council meeting that adopted "more detailed policies and an attitude of urgency" to cope with the pork supply crisis.

On August 22, Vice Premier Hu Chunhua told communist party officials to prioritize the rebuilding of pork production capacity and preservation of pork supplies as an important "political task." The full transcript posted on a pork industry site warned officials that widespread pork shortages could occur during the upcoming moon festival, National day, New Year, and spring festival holidays if they fail to take measures. Shortages would affect the "happy and peaceful atmosphere" during the upcoming 70th anniversary of the Peoples Republic, the vice premier said. Furthermore, Hu warned that a gaping hole in the pork supply and unaffordable pork for low-income people would impair the image of the communist party in 2020 when the "well-off society" is scheduled to be achieved.

Most Chinese news media posted only the 3-paragraph summary of the Vice Premier's remarks that omits these admonitions. The full transcript--apparently an internal communication addressed to "comrades"--was posted only on social media. The full transcript is a surprisingly candid assessment of problems and shortcomings in the pork sector that are kept hidden in documents for the public.

Vice Premier Hu's remarks included a number of items that rarely appear in government-approved documents for public consumption:

• The ASF virus is now endemic in China (在我国定植).
• According to Hu, unannounced investigations found large numbers of dead pigs where no disease had been reported, indicating that the actual number of ASF cases exceeds the number reported.
• Hu acknowledged that China's pork supply situation will be "extremely severe" during the 4th quarter of this year and first half of 2020
• The Chinese government estimates that the country will have a 10-million-metric-ton deficit in pork supply this year.
• Premier Hu said the projected 10-mmt deficit exceeds the amount of pork traded in international markets.
• Monthly estimates of swine inventories by the Ministry of Agriculture and Rural Affairs are based on monitoring of 4000 pig-raising villages and 13,000 scaled-up farms.
• With its short production cycle, poultry will be the main substitute relied upon to fill the deficit. China will struggle to increase poultry production by 3 mmt this year, Hu said.
• After years of prioritizing control of manure pollution by closing or moving farms, local officials are now accused of over-zealous enforcement and are ordered to pare back zones where livestock farms are banned and pay for re-building hog farms. 
• Hu acknowledged that there hasn't been much progress in cleaning up manure pollution 
• Local leaders in pork-producing regions have been asking for slaughterhouses to be built in their counties because subsidized pig farms generate no tax revenue and pigs are mostly trucked off to cities for slaughter. This pattern is said to "unsustainable," and trucking pigs around the country is acknowledged as contributing to the spread of disease.
• Hu acknowledged chronic weakness and under-funding of grassroots veterinary services.

Hu Chunhua recommended numerous policy measures to stabilize production and maintain market supplies of pork. Provincial and local officials are responsible for implementing these policies:

• Pork farms and companies are to be given short-term aid.
• Banks must not cut off lending to swine farms and slaughterhouses; subsidized loans should be given to swine farms. Provincial government loan guarantee organizations should prioritize recovery of swine farms.
• Poultry companies should also be given aid to expand.
• Each province is charged with maintaining a degree of self-sufficiency in pork. The mayors' market basket system will hold city officials accountable for supplying pork and other nonstaple foods to their citizens. 
• Pork reserves should be expanded and made more effective.
• Pork-deficit provinces and cities are to form long-term pork supply agreements with neighboring pork-surplus provinces and counties to establish contiguous regions self-sufficient in pork.
• Officials should work out arrangements by which wealthy cities pay pork-producing counties to support their farms and infrastructure.
• Land and credit should be set aside to build slaughter facilities in pork-producing counties.
• 2 billion yuan in food subsidies for low-income people have been announced.

Previous announcements targeted aid to large-scale farms, but the State Council's August 21 circular extended support to household-operated farms and removed a minimum requirement of 15 mu (1 hectare) of land for a farm to receive support. 

Vice Premier Hu wrapped up his address by emphasizing two points that are distinctive features of the communist regime:

• "We must strengthen the guidance and management of public opinion."
• "Stabilization of production and maintaining supply are an important political task."

In China's economic model, government officials are the "directors of the play" and "companies are actors on the stage." It follows that officials have privileged access to information so they can pull the strings to organize the play. Hu reflects this duality by goading officials to "apply force on internal matters" and "in external matters do well on propaganda, issuance of information, and managing public opinion" (italics added). In the same vein, Hu advised statistical bureaus to increase the frequency of "confidential" or "secret" surveys so the government can devise timely support measures. In other words, Chinese statistics are internal information for the government's use; statistics are only released to the public after being massaged and molded into a propaganda statement.

The vice premier's remarks reveal a contradiction regarding information gathering. Like an angry schoolmaster, Hu Chunhua chided local officials for not reporting of disease to central authorities and promises they will be punished for doing so. While he is aghast that local officials withhold information from him, the Vice Premier seems to have no problem withholding information from the public. Hu believes information released to the public must be carefully managed to shape their opinion. The public cannot be trusted with information because they might panic and hoard pork or try to corner the market. (And of course, government officials would never do this themselves.)

Management of public opinion is evident from a comparison of Premier Hu's speech with a Peoples Daily propaganda article. While Premier Hu warned officials about an impending shortage of pork and potential market instability, Peoples Daily quoted a Ministry of Agriculture official who declared that "The overall meat supply is assured" and "the pork market is overall stable." Premier Hu told officials they face a long, difficult battle against ASF, but articles intended for the public declare that the disease is under control and normal production and marketing can now resume. 

The elevation of promoting pork production as a "political task" reveals the constantly changing crisis-driven priorities kicked down to local officials. Efforts to control manure pollution are an example of the constant oscillation of "political tasks." Policy pronouncements in the last two months have included vague admonishments not to go beyond legal requirements in designating zones where livestock farms are banned or limited. These refer to a an ongoing tug of war over efforts to clean up pollution from pig manure in a rapidly urbanizing society. The first livestock law in 2005 included a provision that called for each community to designate zones where livestock farms would be banned,  limited or encouraged. Livestock farms would be restricted near residential areas, institutions of higher education, drinking water sources, markets, roads, and scenic areas. This idea was rarely implemented until 2013 when a water pollution prevention action plan issued by the state council called for designating such zones by the end of 2017 and destroying or moving farms from zones where they were banned. 

In 2017, the Ministry of Agriculture issued a document criticizing local officials for being overzealous in designating farm-ban zones--although the examples they gave seem consistent with language describing the zone designation going back to the 2005 livestock law. Two years later, facing a pork shortage, officials now seem to have decided the Ministry of Agriculture is right by ordering local officials to scale back the pig-ban zones and rebuilding pig farms that were demolished. In his teleconference, Premier Hu also seemed to admit that little had been done to promote treatment and utilization of pig manure although it was a feature of the 2016-2020 plan for the swine sector. Environmental control seems to have been pushed aside as a priority now that there's a pork supply crisis.