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Coming to pig farmers’ rescue

Son Nguyen
Friday,  May 5,2017,15:37 (GMT+7)
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Coming to pig farmers’ rescue

Son Nguyen

Pig farmers across the country have been suffering huge losses, as the live pig price has for months on end plunged far below production cost due to a supply glut. It is understandable, therefore, when the Government rallies support from all walks of life to come to pig farmers’ rescue.

But even if the widespread movement pays off, a key question remains to be answered: is the prescription a right, effective cure?

According to local media, the live pig price has tumbled to 30-year lows, hovering around VND20,000 a kilo compared to the production cost estimated at between VND34,000 and VND39,000. Many pig farm owners have gone bust, and the total losses have amounted to billions of U.S. dollars.

In Dong Nai Province, the country’s key pig rearing area, an agriculture official says in Tuoi Tre newspaper that as many as 1.7 million full-sized pigs are desperately waiting for traders. If such an amount can be sold at the current price, farmers there will incur losses of at least VND2 trillion.

Farmers are feeling the pinch. While the pig price has taken a sharp nosedive since half a year ago, the pork price at supermarkets and traditional markets has barely moved down, meaning traders are gaining a hefty profit.

Phan Minh Bau, deputy director of Dong Nai Province’s Department of Agriculture, states that “live pigs are purchased at VND24,000 a kilo, and slaughterhouses wholesale pork to retailers at VND36,000 a kilo. Meanwhile, pork is being sold at VND80,000 a kilo to traditional markets, and even at VND100,000 a kilo at supermarkets... Intermediaries thus are gaining a profit of VND44,000 to VND64,000 a kilo, which is too thick a profit margin,” he is quoted in Tuoi Tre.

Similarly, Nguyen Quang Tho, director of Thy Tho slaughterhouse, also asserts that retailers have gained a profit, some VND30,000 to VND50,000 a kilo higher than the wholesale price offered by his company, according to the newspaper.

The current catastrophe for pig farmers, according to Tien Phong newspaper, is due to problems in distribution and consumption channels that have not been addressed for long. “The fact that pig prices have fallen while pork prices for end-users remain high has persisted, not for one or two days. It has stayed for a long time and market signals have been wrongly perceived,” economist Nguyen Duc Thanh is quoted as commenting in Tien Phong.

Thanh also blames the Ministry of Industry and Trade for its failure to effectively employ market tools, and only steps in by calling for efforts to rescue farmers when the situation worsens.

But aside from poor management on the part of State agencies that gives way to traders to manipulate prices, the big question remains unanswered.

Lao Dong says that a movement to rescue pig farmers is not only meant for consumers to share the burden with farmers, but also a move to help the entire economy. However, “a question needs to be raised: what (farm produce) will be the next one to be rescued?”

“We have come to farmers’ rescue multiple times, when prices crashed for chicken, eggs, bananas, watermelons, and now pigs. The common ground for all such rescue efforts is that such commodities are excessively abundant, far outpacing demand,” says the paper.

Lao Dong stresses that if consumers purchase more pork, then other farmers rearing cows or chicken cannot sell their produce.

Echoing the point, VOV.vn, the news website of Voice of Vietnam radio station, remarks that while pig prices may inch up owing to the rescue, “many farmers rearing big cattle, poultry and fish are seeing their sales declining markedly. Without a good strategy, a good vision and a well-made zoning plan, we will deal with numerous rescue movements one after another.”

In fact, agricultural production has for years endured numerous boom-and-bust cycles. Farmers base their production decisions on market prices alone, without any reliable source of information to determine their production. They will boost production when prices are high, but when prices tumble, causing huge losses and sending many into a tailspin, they will shun business, affecting the whole agricultural sector.

In order to put an end to such rescues, zoning plans for any agricultural sub-sector must be attached with the responsibility of State agencies, according to Lao Dong. The newspaper says that “market forecasts and warnings must be made available” to farmers rather than relying on rescue efforts like now.

In addition, State agencies must make greater efforts to create value chains with the participation of farmers. Farmers should be encouraged to join such value chains by signing agreements or contracts with the buyer so that they can know for sure about the output they should pursue, according to VOV.vn.

The movement to come to pig farmers’ rescue should be provisional only. To lessen impacts of the boom-and-bust cycle on agricultural production, State agencies need to step in now with rigorous action plans to ensure that benefits are shared among all stakeholders rather than only traders, that output is knowingly controlled to prevent supply gluts, and that no rescue programs are needed in the future.

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Giấy phép Báo điện tử số: 321/GP-BTTT, cấp ngày 26/10/2007
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