China swine fever hits small farmers and rural communities hard

Disease has swept through the country accelerating a shift to big industrial producers


Tom Hancock in Zhang’ao, Financial Times

July 9, 2019


The village of Zhang’ao in eastern China was lively with the sound of 1,300 pigs last summer, but this year its pigpens are silent after all of the animals were slaughtered following an outbreak of African swine fever.


Set amid green hills in the eastern province of Zhejiang, Zhang’ao is just one example of how communities have been hit by the devastating disease. Swine fever has swept through China — the world’s biggest producer of pigs and consumer of pork — over the past year, with the pig population expected to be cut by about a third from 360m by the end of 2019, according to Rabobank estimates.


The problems for Zhang’ao’s small farmers are mirrored across the country, with the mass cull accelerating a shift in China’s $128bn pork industry towards conglomerates that operate large industrial farms.


“We want to know when we can return to raising pigs,” said village chief Wan Changnan, pointing to a complex with capacity for 3,000 animals. “If we don’t raise pigs all this equipment is useless.”


The shift is also raising questions about a tradition that has been part of countryside life across much of China for centuries — a pig with a roof over its head forms the Chinese character for “home”.


“It used to be that every family raised pigs. That was in the time where there weren’t other sources of income,” said Zhang Huizhi, head of the village’s Communist party branch.


The pig population in Zhang’ao has been falling for decades, as young people have migrated to cities for work and services sector jobs that have arisen in rural areas rather than working on farms. A government campaign launched in 2014 to close hundreds of thousands of small pigsties to reduce rural pollution also forced villagers to pool their pigs into a single new facility.


Those trends cut the number of Chinese farms with fewer than 50 pigs from 80m a decade ago to less than 40m. By contrast, the number of commercial farms which own more than 50,000 pigs have increased from 50 to more than 300 over the same period, according to government data.


“Many small and medium-sized farmers have withdrawn from the market, which can leave huge market space for large-scale breeding plants,” said Feng Yonghui, an analyst at consultancy Soozhu.


Investors appear to agree. Shares in China’s biggest pork producer, Shenzhen-listed Wens Group, which slaughtered 6m pigs in the last quarter, have risen 62 per cent year on year.


Muyuan foods, the country’s second-largest producer, has nearly doubled its share price over the same period, while Shuanghui, which slaughtered 4.7m pigs, reported rising profits in the last quarter.


Those farms that have avoided infection are expected to reap higher profits, with prices forecast to be double what they were at the end of 2018 by the end of this year...


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