China ‘backyard’ pig farmers squeezed as sector scales up  

China ‘backyard’ pig farmers squeezed as  sector scales up   

BEIJING: Walking through swarms of flies at his piggery on the outskirts of Beijing, Liu Jin shows off 1,500 hormone-free black hogs raised for China's growing organic meat market.

Liu employs a dozen people to look after the swine that are kept in indoor sties and outdoor pens -- the type of large-scale operation China hopes will one day replace the millions of "backyard" farms across the country. "Even ordinary people care a lot about whether their food has hormones," said Liu, describing his pigs as "green".

About 90 percent of China's estimated 40 million pig farmers raise fewer than 50 hogs and account for about one third of supply, according to Dan Wang, an analyst at The Economist Intelligence Unit.

Poorly educated and lacking an understanding of market cycles, they often buy and sell their pigs at the wrong time, triggering supply disruptions and price volatility. To stabilise the industry and encourage cleaner large-scale production, Beijing has been cutting back subsidies for smaller farmers and rolling out stricter environmental regulations to force backyard producers to expand or get out.

"The larger farmers have a very steady production cycle but the smaller ones don't," Wang said.

"The government wants to commercialise the entire pork industry -- they don't want small farmers."

China consumes more pork than any other country, with the average person gobbling 20-40 kilogrammes a year, according to analyst estimates, and its farmers are struggling to keep up with demand.

The country's world-beating output fell in the last two years as authorities ordered farmers to install waste disposal systems, properly dispose of carcasses and move foul-smelling piggeries away from drinking water sources and urban areas.