Where will all the pigs be raised? Global Economics Vs Food Security and other Politics

1. Where will all the pigs be raised?Global Economics Vs Food Security and other Politics Jerry Thompson Genus Director Russia and Asia Pacific

2. Introduction • Global Economic Overview • The PIC World Pork Competitive Survey • Non-economic Factors • From Food Security to Customer Demand • Showcase on China

3. The Challenge • Double food output by 2050 using 50% of the water that we use today

4. World Meat Production and Trade • Meat Production grows at 1.8% per year • Meat Trade grows at 3.4% per year Fapri 2010 World Agriculture Outlook

5. Per Capita Meat Consumption • Pork first choice among consumers • 2019: 55 Kgs of Pork, Chicken and Beef Fapri 2010 World Agriculture Outlook

6. World Pork Production and Trade • Production grows at 1.6% / Year • Trade grows at a rate of 2.8% Fapri 2010 World Agriculture Outlook

7. Who is Eating Pork?

8. Per CapitaPorkConsumption (Kgs/person) Fapri 2010 World Agriculture Outlook

9. Selected Net Importer Countries Fapri 2010 World Agriculture Outlook

10. The PIC World Pork Competitive Survey • Objective: • Quantitative study of key success factors that positively or negatively impact growth in pork production in selected countries • 70 Industry leaders from 15 different countries • Focus on: USA, Canada, EU-27, Chile, Mexico, China, Japan, Brazil, Argentina, Australia, South Korea, Phillipines.

11. Industry Key Success Factors POLITICAL & SOCIAL FACTORS Pork is Country´s Strategic Government Subsidies Local Food Safety Regulation Level of Environmental Laws Welfare Pressure Country´s Animal Disease Control STRUCTURAL FACTORS CornPrices LandAvailability Labor Efficiency FarmProductivity Local DemandforPork PorkQualityStandards COST COMPETITIVENESS Level of Cost of Production % FeedCost / Total Cost Cost per Sow in New Project

12. Ability to Compete? Better PIC 2010 World Pork Competitive Survey

13. What about Cost? Better Worst Better PIC 2010 World Pork Competitive Survey

14. Non-Economic Factors Food Security The availability of food and our access to it

15. China’s Twelfth Five Years PlanDate:16 March 2011 把握“一个重点任务”，按照科学发展的要求来加快现代农业的发展。在工业化和城镇化的过程当中，同步推进农业现代化。另外，要突出“一条主线”，就是要加快农业发展方式的转变，继续调整和优化产业结构。 紧紧围绕“两个目标”，就是把保证国家粮食安全、持续发展我们的粮食生产作为首要目标，把持续快速的增加农民收入作为农业农村经济工作的中心目标. 提高“三个能力”，提高农业的综合生产能力、农业的抗风险能力和农业的市场竞争能力。 在“十二五”要下大力气推进“四化”，农业生产经营的专业化、标准化、规模化和集约化。 强化“五大支撑”，强化农业发展的政策支撑、科技支撑、装备支撑、人才支撑、体制机制支撑 Ⅰ Speed up the development of modern agriculture. Ⅱ Guarantee the safety and develop our production capacity. Take increasing farmers income as the top priority in agriculture economy development. Ⅲ Improve overall agriculture production levels Strengthen anti-risk capability Enhance competitive edges Ⅳ Promote agriculture business to be more specialization, more standard, more systematization and more intensification. Ⅴ Support agriculture development with preferential policies, advanced technology and equipment, talented people and optimized mechanism.

16. The ‘Putin Plan’ for Russia 2-йэтапПрограммыреализуетсяв 2013-2020 гг. Цель увеличить маточное поголовье до 2.85 млн свиноматок с общим поголовьем до 35 млн голов (при умеренном сценарии) или до 45 млн (при инновационном сценарии) основные задачи для достижения плана: улучшение экономических условий работы свиноводства России, обновление племенного потенциала, повышение конкурентоспособности и экономической эффективности производства свинины создание и развитие сети селекционно-генетических центров с первоклассным научно-технологическим потенциалом реконструкция действующих и создание новых производственных мощностей в товарном свиноводстве в рамках различных организационных моделей и форм хозяйственной деятельности Развитиепредприятий по убою и мясопереработке кормовой базы свиноводства, повышение качества кормов разработка и внедрение современных стандартов качества и технического регламента производства свинины 2nd stage of the national program “Development of pork production 2013-2020” Objective to increase the national sow herd up to 2.85 mln sows with total pig stock up to 35 mln pigs ( with a moderate scenario) or up to 45 mln pigs (with an innovative scenario) Key actions to achieve the targets: Improvement of economy of pork sector. Establishment of net of selection centers with innovative technologies Reconstruction of existing production facilities & establishment of new operations within different organizational models & forms of business. Development of slaughter & processing facilities and feed production for pork industry Development & introduction of advanced quality standards & technical regulations of pork production.

17. Expansion plan of yearly average swine stock in 2009-2012 & up to 2020,

18. Программа государственной финансовой поддержки: • 1. Единовременные субсидии федерального бюджета племенным хозяйствам на первоначальное приобретение свиноматок хряков с высоким генетическим потенциалом в размере 20% от стоимости поголовья. • 2. Государственная поддержка ежегодного обновления основного стада для плем. товар хозяйств в размере: для племхозяйств 6 тыс. рублей на голову, для товар. хозяйств 3 тыс. рублей на голову. Благодаря данному направлению государственной поддержки предполагается снизить зависимость российского свиноводства от поставки импортных плем животных, сформировать условия для возрождения и развития отечественного племенного свиноводства. • 3. Государственная поддержка на содержание маточного стада племенных хозяйств отвечающих современным требованиям племенного дела в размере 5 тыс. рублей на основную и проверяемую свиноматку основного стада. • Государственная поддержка товарных продаж свинины из селекционно-племенных центров с целью компенсации затрат СГЦ при реализации свиноматок и хряков из основного стада на товарное мясо из расчета 20 руб. за килограмм живого веса • Субсидирование процентных ставок по инвестиционным кредитамдля реконст- • рукции и строительства свиноводческих мощностей, предприятий по убою и мясопереработке и предприятий комбикормовой промышленности, финансовая поддержка НЦ • State financial program: • One-time subsidies from federal budget to breeding organizations for first purchase of sows & boars with a high genetic potential in amount of 20% from the stock value. • State support of annual replacement of the main herd for breeding & commercial complexes: 6 000 rb/head for breeding units & 3000 Rb/head for commercial units. With this measure it is planned to minimize dependence from imported breeding pigs & form proper conditions for restoration & further development of local swine breeding. • State financial support to grow sow stock of the breeding organizations in amount of 5 000 Rb for a productive sow in the main herd meeting all up-to-date requirements of the breeding operations. • State support of commercial sales of pork from selection centers with an aim to reimburse expenses of selection centers for slaughtering sows & boars from the main herd in amount of 20 Rb per 1 kg live weight. • Subsidies of interests rates of the investment loans taken for reconstruction & construction pig production projects, slaughter & processing facilities projects & feed production operations. Financial support of research centers.

19. The Republic produces 2.6M pigs in 1965!!!

20. The Result….

21. Trade Restrictions….

23. …and other Politics

24. Animal Welfare Concerns

25. COUNCIL DIRECTIVE 2001/88/ECof 23 October 2001amending Directive 91/630/EEC laying down minimum standards for the protection of pig Sows and gilts shall be kept in groups during a period starting from 4 weeks after the service to 1 week before the expected time of farrowing. The pen where the group is kept must have sides greater than 2,8 m in length. When less than 6 individuals are kept in a group the pen where the group is kept must have sides greater than 2,4 m in length.

26. COUNCIL DIRECTIVE 2001/93/ECof 23 October 2001amending Directive 91/630/EEC laying down minimum standards for the protection of pig • Focus on: • Light requirements and maximum noise levels, • Permanent access to materials for rooting and playing, • Permanent access to fresh water, • Additional restrictive conditions to carry out mutilations on pigs, • Minimum weaning age of four weeks.

27. UK Herd Size – 1973 - 2010

28. In response 40% of the UK herd is now outdoors

29. Sow Stalls or Group Housing by 2020? % 2011 - PIC Survey

30. What does the Customer really want?

31. Global Consumption Fapri 2010 World Agriculture Outlook (2009 Data)

33. Population Density

35. Future of China’s Protein Consumption 2005 - 2030 Million Tonnes Dairy Pork Eggs Beef Poultry Source: Brilliant Pioneer Consultant

36. Stable increase of rural inhabitants’ income Unit: RMB Source: Statistics Bureau of China

37. No comparative advantage for land intensive agriculture

40. The new Integrators

41. PIC Nucleus in Benxi

42. Thank you!