African Swine Fever Hits Chinese Economy

01 November 2019 Peak Recruitment

Pig Farming

African Swine Fever has hit China – the world’s biggest producer of pigs and consumers of pork. With every province in China now reeling from the spread of this fatal animal virus, the government’s only option has been to increase imports and more or less stop exports (apart from frozen pork) until the outbreak can be controlled. The change has been quite catastrophic and has hit the Chinese market, economy and culture in many ways.

What Is African Swine Fever?

The first case of the virus recorded in China was almost exactly one year ago (August 2018) in Shenyang, originating as an infestation in warthogs in sub-Sahara Africa. Easily spread, the ticks which infect the hogs can be passed on through bodily contact, ingestion of infected meats, excretions or contact with infected carcasses. Humans are not susceptible to the virus, but it is fatal to pigs once contracted. With little sign of a vaccine on the horizon, the effects on the socio-economic balance in China are proving to be huge.

Statistics Show the Pork Industry Is Suffering

China has seen pork imports increase by 123,000 tons in the first part of 2019; Pork prices have escalated enormously forcing the everyday consumer to reconsider traditional diets; as pork prices have risen, so have overall prices over the country; China’s production of pork was down 5.5% on last year’s figures; the size of china’s overall hog herd has reduced by 25.8% and the number of sows have reduced by 26%.

It would seem that at the current time it is Australia, the next big neighbouring pork producer, who is the big winner in all of this as their pork exports have increased by 55%. Other exporters include Brazil, Germany, Spain, the Netherlands and Denmark.

Chinese Farmers Hit Hard as Culls Increase

Chinese farmers can only stand by and watch as their hog herds shrink because of the African Swine Fever. They are well aware that replenishing their herds before the virus has been controlled would be foolish. It could possibly lead to further infection. African Swine Fever kills every pig it infects. Once a Chinese farmer knows that a pig is infected it leads to massive culls which is leading to major depletions in stock and putting the whole farmers livelihood at risk. Using food waste as feed for pigs has been blamed for the spread of the virus and so farmers are generally turning to manufactured alternatives such as soya beans to feed stock.

Advantages for Big Business

Historically, most homes will have a pig which will be traded and for income. It has always been at the core of Chinese family and business life. However, it is also true that pig farming as a form of income and employment has been falling over the last few decades as, in response to the technological era, young people are migrating away from rural areas to towns and cities looking for more service focussed work.

As the individual small farmer struggles, large industrial farms are taking a larger proportion of the market and pushing the little trader out. In fact, ensuing changes imposed to control the fever are striking at the very heart of Chinese culture. This shift towards modern production and people wishing to work in the services industry rather than farming has led to the larger farming conglomerates taking hold. Over the last 10 years, the number of commercial farms has increased from 50 to over 300.

African Swine Fever is adding to that shift. Small farmers are unable to reinvest when their herds become depleted whereas the bigger companies can. It is these companies which are currently taking over the market. The knock-on effect from this is the government is forced into favouring big business. Recently, the Ministry of Agriculture and Rural Affairs ordered banks to grant low interest loans to businesses or farms with more than 5,000 hogs.

Bleak Forecasts

In the meantime, as the cost of pork soars, Chinese consumers are looking elsewhere for food supplies and are finding protein intake and tasty meals through poultry and seafood. Experts have estimated that African Swine Fever will wipe out 33% of China’s pork production by the end of 2019. This is a pretty bleak forecast and one can only hope that a vaccine is found very quickly as the virus is already spreading outside Chinese borders to countries such as Vietnam, Cambodia, Mongolia, North Korea, and Laos.

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