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Improving Competitiveness of Pig Producers in an Adjusting Vietnam Market

Improving Competitiveness of Pig Producers in an Adjusting Vietnam Market Presentation by Dr. Ma. Lucila Lapar ACIAR Networking Workshop AARES 2010 Conference, Adelaide, Australia 8 February 2010. Implementing Partners. ACIAR – funding agency ILRI

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Improving Competitiveness of Pig Producers in an Adjusting Vietnam Market

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  1. Improving Competitiveness of Pig Producers in an Adjusting Vietnam Market Presentation by Dr. Ma. Lucila Lapar ACIAR Networking Workshop AARES 2010 Conference, Adelaide, Australia 8 February 2010

  2. Implementing Partners • ACIAR – funding agency • ILRI • Center for Agricultural Policy-Institute for Policy and Strategy for Agriculture and Rural Development • IFPRI • Univ. of Queensland • Oxfam

  3. Presentation overview • Context • Objectives • Key findings • Challenges and potential areas for VC research

  4. Context (1) • Demand for meat is increasing (quantity and quality). • Structural transformation of livestock sector, also of the agri-food retail sector. • Vietnam’s Livestock Development Strategy to 2020 is to modernize and scale up. • Rural poverty remains a development challenge. • Development interventions need to harness potential from smallholder systems.

  5. Context (2) • Smallholder, household-based pig raising an important source of livelihood in rural areas, also meet significant portion of urban demand for pork, employment generation along the pork supply chain. • How to facilitate smallholder engagement in emerging high-value chain for pig meat (commercial and/or traditional quality attributes)? • Need to address constraints to access to quality inputs and services to improve productivity, quality, and credible certification of quality. • Appropriate policy and institutional framework is needed.

  6. Who will supply and How? Source of data: IFPRI IMPACT model results (updated in 2009)

  7. Aim of the Project • To identify options for technology, policy, and forms of market institution or coordination that will allow smallholder pig producers to raise incomes through better access to higher value chains (including niche markets) in the context of rising demand for products with specific quality attributes and within the broader context of the changing dynamics of the pig sector in Vietnam.

  8. Framework of Analysis Producers: Household- Based Output Market: Traditional Modern Consumer Demand: Quantity Quality Safety Inputs & Services: Breed Feed Health Policy

  9. Key findings – Demand (1) • Per capita pork consumption is about 25 kg per annum, and rising. • Increasing trend in fresh pork consumption in both urban and rural, higher in urban • Increasing trend in processed pork consumption in both urban and rural, higher in urban

  10. Key findings – Demand (2) • Increasing trend in lean pork consumption in both urban and rural areas. • Decreasing trend in fat pork consumption • Predominant preference for permanent and temporary open markets as outlets for fresh pork

  11. Key findings – Production: Feed • Efficiency in feed use (based on FCR) in farrow to wean (piglet production) with at least 4 sows or grow to finish (fattening) with at least 16 fatteners; no significant differences attributed to scale in farrow to finish (full cycle) • Smaller production units appear to be more cost efficient in fattening and full cycle slaughter pig raising, but not in piglet production.

  12. Key findings – Production: Breed • Predominant use of crossbreeds, relative to pure exotics. • High incidence of adoption of local breed (e.g., Mong Cai) sows for breeding to produce F1 (Mong Cai x exotic/or exotic cross) • Improved breed adoption positively associated with scale.

  13. Key findings – Input/output Markets • Smallholder outputs (live pigs or carcass) generally pass through traditional market channels (no contracts, largely through market agents, and sold at traditional retail market outlets. • Smallholders access inputs (feed, breed) via these same traditional input market outlets. • Implications of these on production cost, output prices, and margins.

  14. Big Slaughter House Feed Company (CP) Feed piglet Export to China 5% Big Trader 10% Market outside district 30% Animal feed Agent 1 Local consumer Carcass trader (bring carcass to external districts) 30% 20% Carcass trader (sell carcass to retailers within districts) Animal feed Agent 2,3 50% 5% 5% 70% State-owned Breed Center (piglet&semen Permanent Market Small trader – butcher 60% 5% 10% 20% Piglet Trader/ producer 95% Meat traditional processing hh Temporary Market CONTRACT PRODUCER LARGE-SCALE PRODUCER 5% Hire a place for slaughtering only Market actor linkage SMALL-SCALE PRODUCER Pig supply chain in Ha Tay pigs

  15. 30% Animal feed Company (supply both feed&breed) Big slaughter Operator Wholesale Market (HCMC) 5% 100% 40% 80% Big Trader 30% 95% 20% 10% Meat traditional processing hh Animal feed Agent 1 90% Permanent Market 5% 80% 15% Temporary Market Animal feed Agent 2 80% Small Trader 20% Small slaughter house Street vendor Piglet Trader 90% 10% LARGE-SCALE PRODUCER Hire a place for slaughtering only Market actor linkage SMALL-SCALE PRODUCER MEDIUM-SCALE PRODUCER Pig supply chain in Dong Nai Veterinary Center

  16. Key findings – Disease risk & food safety (1) • Response to pig disease outbreak is to stop consumption (41%), substitute with other meats (38%), purchase from reliable outlets or supermarket (11%), no change (5%). • Response to avian influenza outbreak is to increase pork consumption (31%) or beef consumption (19%), stop eating poultry (75%).

  17. Key findings – Disease risk & food safety (2) • Worrying levels of pathogens (E. coli, Listeria, Staphylococcus) and residues (antibiotics) were found in pork sold in Hanoi. • Risk factors for illness were more associated with bad food handling practices than meat consumption. • Of the hazards, residues must be managed at farm level, Staph is best managed at meat handler level, and E. coli must be managed at every points along the chain.

  18. In the works • Livestock policy modeling, simulating policy scenarios and impacts on traditional and modern pork chains. • An action plan for pig sector development to improve productivity and efficiency and enhance smallholder competitiveness.

  19. Challenges in VC research • VC as an analytical framework – beyond economics • Measuring chain performance – how? new approaches? • *Economics (efficiency) • *Non-economics (public health, food safety) • Capacity of partners, NARS • Communicating research with policymakers and stakeholders – riding against the wave

  20. Promising areas for VC research • Institutional issues • Incentive structure, policies • Organizational forms • Food safety issues in agri-food structural transformation in developing country context • Risk pathways in livestock VCs, risk mitigation and communication

  21. An invitation: Mini-symposium on Agribusiness and Food Safety 10 February 2010

  22. International Livestock Research Institute Better lives through livestock Animal agriculture to reduce poverty, hunger and environmental degradation in developing countries ILRI  www.ilri.org

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