“Market and Sustainable Livestock Production”

Market and Sustainable Livestock Production”
Workshop in AgroViet trade fair

The “Market and Sustainable Livestock Production” workshop was held on 12 November, 2010 at Agricultural Exhibition Center, Hanoi as an activity in the AGROVIET TRADE FAIR (AGRITRADE). The workshop chairman is Mr. Nguyen Thanh Son, deputy director of the Department of Livestock Production (DLP), Ministry of Agriculture and Rural Development (MARD).

Opening remark (Mr. Nguyen Thanh Son)

Livestock production is now facing difficulties. On one hand, input cost has increased 15% from the beginning of the year while output price is unstable. On the other hand, animal diseases such as the ‘blue ear’ (PRRS), bird flu (HPAI) and FMD have been widespread, despite government’s efforts. In the first nine months of 2010, about 80 thousand tons of meat products have been imported, of which the majority are chicken. In the last months of the year, import might accelerate. Tariff might not be able to barrier import meat if domestic producers fail to reduce production cost. This workshop is held to exchange ideas and experience in livestock industry. Livestock keeping is a risky business and livestock keepers are all brave people.


The workshop includes four presentations by speakers from government, business and academia.

Presentation 1: Current state of livestock production in Vietnam and government livestock policies, by Mr. Pham Van Duy, deputy head of small livestock division, DLP.

Presentation 2: Enhancing competitiveness of Vietnamese livestock products, by Mr. Nguyen Do Anh Tuan, Senior Economist, IPSARD.

Presentation 3: Industrial feed in livestock production: Issues and Difficulties, by Mr. Le Ba Lich, Chairman of the Vietnam Livestock Feed Association.

Presentation 4: Pig and cattle production at households and large commercial farms.


Mr. Nguyen Thanh Son:

As MARD’s representative, Mr. Nguyen Thanh Son responded to some of the issues raised by the speakers. Regarding the development of large commercial farms, he recognizes an obstacle in setting up large farms is access to land. Mr. Son also explained the paradox that Vietnam is an agricultural country but could not supply sufficient maize for feed production. He pointed out that maize production can only be raised by expanding areas for maize or increase productivity. There is not much room for the former since increasing land for maize production involves tradeoff with other crops. The latter is no easier for increasing productivity requires better breeds and technologies, which is difficult for small production.

Mr. Vu Thanh Nhat, a large farm owner in Dong Hung district, Thai Binh province:

This workshop allows him to update government livestock policies. He puts forward some issues in livestock production:

  • Difficulty to get credit from banks and volume of credit is small than what needed.
  • Price forecast: Often, when pig price goes up, farmers do not have sufficient pigs to supply because they have reduced production when price goes down or when there are disease outbreaks. Thus, they miss the chance to exploit price increase.
  • Sale is unstable and it is difficult to find large traders. Large farms face difficulty in selling a large number of pigs.
  • Sale price does not keep up with production cost.

Mr. Nguyen Thanh Son:

  • The case of Malaysia provides good experience. In Malaysia, commodity associations are developed and active in manipulating the equilibrium of demand and supply. They can manage pig supply and move pigs from one area to another so as to achieve desirable price. In Vietnam, cooperative can be a good institutional form to support farmers.
  • Pig price at farm gate is low, but pork price for consumers is high. That is a problem.
  • Regarding access to bank, it is understandable that banks are not willing to give loan to livestock producers since livestock production is risky. MARD is examining the feasibility of establishing an insurance system for livestock production.
  • Price forecast: it is difficult to make any forecast. However, there are recently forecasts from research projects and MARD has put some forecasts on its website.
  • Presently, price of pigs is quite high, but if high price is kept for long time, import meat would increase.

Mr. Que, DABACO Company:

This company produces feed, breeds, raises and slaughters chickens and pigs. Its feed production volume is 260 tons. There are 8000 sows (of which, 1000 sows are pure bred sows) in its farm, supplying 50,000 pig heads to contracted pig farms; 60,000 cocks and hens. The company has farming contracts with 100 farms. They supplies 5 million kg of broilers and 5 million kg of pork. The advantage of the company is that they have a full chain system, from feed to livestock and to slaughter so that they can reduce cost. They, however, also face difficulties/threats such that:

  • Farmers’ farm size is small.
  • Animal diseases
  • Lack of capital
  • Lack of land for large commercial farms.

The company proposes that:

  • The government facilitates land accumulation (purchase, rent or exchange of lands) so as farmers have sufficient land for setting up large commercial farms. For example, Hai Phong city has a good policy and the company has 40 large contracted farms in Hai Phong.
  • Disease control: in the presence of disease outbreaks, the government forbids the slaughter and movement of pigs regardless whether the pigs are infected or not. This destroys even safe pig farms. Government should allow farms to sell safe pigs.
  • Import of meat can threaten domestic production so the government should control meat import.
  • The number of smallholder farms is diminishing but they will stay for long. Thus, they should be supported to access good breeds and feeds to develop in parallel with large farms.

Mr. Chien, large farm owner in Hung Yen province:

  • In order to modernize agricultural sector, we must modernize pig farms.
  • When pig price goes up, farmers could not reap the benefit due, for example, to the influx of Chinese products.
  • Smallholders’ farms have negative impact on large farms since they do not take sufficient care about disease prevention. Therefore, there must be tighter control over small farms.
  • The government should certify safe farms; adjust disease control procedure at time of disease contagion to reduce costs involving movements of pigs (relating to police and veterinary officers).

Mr. Nguyen Thanh Son:

  • There are no certifications for farms meeting some standards. Farms can declare their own standards.
  • Control the influx of Chinese products is difficult.
  • For movements of pigs at time of disease contagion, MARD has adjusted its policy to allow the movement of safe pigs.

Mr. Nguyen Van Phuc, large farm owner in Soc Son district, Hanoi.

  • To be sustainable, livestock production must be held in large scale, which requires large area of land. However, price of land is expensive. Thus, there must be production zones for farmers to lease.
  • It is difficult to get credit. Farmers often have to use their land certifications as collateral. Farmers, however, can get little loan. The government should have a policy to help farmers access to credit.
  • The government has a policy to give interest-free credit to supermarkets and slaughtermen to stabilize prices of livestock products while farmers are not supported. That is, the intermediaries are beneficiaries rather than producers. For example, Hanoi government has invested 14 billion VND to help modern slaughterhouses in waste treatment.

 Mr. Chien, chairman of Co Dong cooperative

  • Land: the cooperative includes 30 large commercial farms but they do not have land certificates so that they are not confident to use and pursue long-term investment.
  • Price stabilization program: farmers are disadvantageous in the program. When meat prices go up, the government implement stabilization program by increase import of meat but when farmers get loss, no support is provided to them.
  • Farms are efficient with comparable FCR with those in other countries but due to high feed price and high interest rate, production cost is high.
  • Environmental issues: To meet environmental standards requires huge investment so that most farms could not meet the standards. Farmers could not address environmental issues without governmental support.
  • It is not the Department of Livestock Production but local governments are responsible for assessing whether a large commercial farm meets certain standards. Environment police often come to punish farms that could not meet environmental standards. For example, the penalty is 3.5 million VND per farm.

Mr. Nguyen Thanh Son

MARD is preparing proposal of a policy to support 50% of waste treatment cost for farms.

Mr. Nguyen Thanh Son – Closing remarks

There are four paradoxes in Vietnam’s livestock sector:

  • Input cost is high but output price is low
  • Producer price at farm gate is low but consumer price is high
  • Production cost price is higher than that of the world
  • More production, more diseases and pollution.

Although large commercial farms and large household-based farms are growing rapidly, their proportion in total livestock production is small. Livestock production is still mainly to make use of existing household resources: by-products, labors, capital and land. Thus, it is difficult to compete with livestock products from other countries such as Thailand, Malaysia. It is, therefore necessary, to have good planning of livestock production and production zones. However, it should be noted that livestock production has its limit, even with large commercial farms. We should not push for livestock production at all prices.

There are complaints that existing policies are not sufficient to support livestock producers and not comparable to supporting policies in other industries. In term of technologies, livestock productivity is still low so there must be policies to improve breed quality and to reduce feed price/cost. Regarding diseases, there have not yet ways to control ‘blue ear’ disease. Can there be vaccines (from China)? The bird flu disease has gradually been under control. There is already a vaccine for FMD. The general strategy is to use vaccines and other preventive measures to avoid diseases. For environmental issues, large commercial farms generate huge waste. There have been 5 incidences of severe pollution by large commercial farms over the last 3 years in Binh Duong, Quang Nam and Nghe An provinces and investment to manage waste would be huge.

There are many things to do and DLP and MARD would do its best to support livestock farmers. What are within MARD capability would be considered carefully and addressed. What are not in MARD’s hand, MARD can send proposals to higher authorities.

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