China pollution

China’s war on pollution leaves small-scale pig farmers squealing

As Beijing pushes to clean up world’s biggest livestock sector, smallholders say they are being short-changed on compensation deals

PUBLISHED : Sunday, 05 November, 2017, 12:29pm
UPDATED : Sunday, 05 November, 2017, 5:49pm

When Zhang Faqing received a letter from the government last December ordering him to close his pig farm on the outskirts of Beijing with just two weeks’ notice, he thought it was a joke.

After local officials visited his farm in Zhoucun village a few days later to reinforce the message, the 47-year-old realised it was no laughing matter.

Almost a year later, he is still waiting for millions of yuan in compensation promised by the government, more than a dozen pens that used to house his 15,000 pigs stand empty and he is still at a loss about what to do.

“I had to sell [my pigs] at whatever price the buyers offered, so I basically sold the meat at the price of cabbage. I lost so much money,” he said on a recent visit to his farm. He said he lost more than 70 million yuan (US$10.5 million).

He is among hundreds of thousands of small pig and poultry farmers across the country who have been forced to close as Beijing has waged a three-year campaign to clean up the world’s biggest livestock sector.

China’s Ministry of Agriculture declined to comment for this report.

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In the months ahead of the December 31 deadline for complying with tough new standards, the pace of government inspections and shutdowns has increased.

That has spurred a 16 per cent rally in pig prices since June amid concerns about a temporary squeeze in supplies of the nation’s favourite meat for the Lunar New Year celebrations in February, the busiest season for demand.

In the long term, the policy will reshape the nation’s scattered livestock industry with a whopping 1.1 billion pigs, squeezing out smallholders and boosting the share of industrial-scale farms as the government aims to develop more modern and efficient agriculture.

Backyard family-run operations with fewer than 50 animals account for 90 per cent of China’s pig farms, but only a third of supply.

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With this push, big players like Guandong Wens Foodstuff Group and New Hope Liuhe, which are building mega-farms each with millions of pigs, stand to grab a larger share of the pork market worth about 7 billion yuan.

“Pig farming in China will gradually develop into a semi-monopolistic structure, with major companies dominating the market and competing with each other,” Zhu Zengyong, a researcher at the Agricultural Information Institute of the Chinese Academy of Agricultural Sciences, said.

Zhang had little choice but to shut up shop and sell his pigs because his farm was too close to a reservoir.

Tough new pollution standards will ban livestock production near water sources or heavily populated areas. Farms in other regions must meet higher standards for treating manure.

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Yao Guilin, an analyst with China-America Commodity Data Analytics, reckoned the environmental inspections would have a significant long-term impact on meat supplies and prices.

The number of pigs sent to slaughter from smallholdings would drop by at least 20 million this year to 380 million, which would be only partially offset by growth of 15 million in the mega-farms, she estimated.

After years of complaints about foul smells and filthy water from unregulated farms, many rural villages are now celebrating their pig-free status, claiming new revenue streams from orchards and eco-tourism are starting to emerge.

But eight smallholding farmers with herds ranging from 50 to 15,000 located in Beijing and rural parts of Jiangsu, Shandong and Henan provinces said they worried about the future.

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One in western Beijing said she would probably build a hotel with the 20 million yuan pledged by the authorities in return for closing her 5,000-strong pig farm, but most said the cash would not cover the losses from selling their pigs and equipment at discounts.

Four said they were still waiting for compensation and struggling to find alternative income, with little experience of other work.

“The local government promised me an allowance of 500,000 yuan. However I think it should be at least 1 million yuan to compensate for the cost,” said a farmer from Shandong who gave his surname as Sun and sold his 100 pigs last month.

Another Shandong farmer, who gave his surname as Song, said he had been told by local authorities his 600-strong pig farm faced likely closure in a few years as the government expected to expand the pig-free zones.

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In the Beijing suburb, where piles of discarded vaccines and animal feed now sit unneeded, Zhang said he was contemplating building an organic pig farm nearby. But without the government cash, he is stuck.

“All the blood and heart I have invested [in my business] were all cast to the wind,” Zhang said.