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Swine flu deals another blow for beleaguered pig farmers

FOR the second time in three years, China's pig farmers are struggling to make ends meet.

The country has an overabundance of pigs. Combine that with fears over swine flu and farmers find themselves unable to make a profit when they go to market.

Lan Yushun sold 60 pigs at 8.2 yuan per kilogram two days ago, losing about 6,000 yuan (US$878).

"It is better than losing more if the price keeps plummeting," said Lan, whose 1-hectare barn in Shanxi Province produces more than 2,000 pigs a year.

The National Development and Reform Commission's pricing department deputy director, Zhou Wangjun, warned earlier this week that supply had surpassed demand and said matters could get worse as consumption of pork usually dropped in summer.

The government would decide whether to start to buy large quantities of pork by next week in an effort to stabilize prices, said Zhou.

"I lost 260,000 yuan in 2006 when the prices plunged drastically due to enormous supply but sluggish demand. I just don't want it to happen again," said Lan, who began to raise pigs in 1994.

"The flu, which has no connection to pigs other than containing swine flu genetic sequences, was another disaster for us. People stopped buying, driving the price down further."

In Jinzhong City, Lan's hometown, pigs sold at about 9.6 yuan per kilogram before the second half of last month, when the flu broke out. The price dropped to 6.2 yuan during the May Day holiday.

The fortunes of China's hog industry have fluctuated drastically since 2006. The serious price fall prompted the central government to launch stimulus policies in 2007, which prompted enthusiastic investment in the sector. Production expanded in the following two years, slashing prices in the second half of last year as consumption growth slowed.

However, Pan Yun, vice president of the Academy of Social Sciences of Shanxi, said the policy, which had been in effect much longer than necessary, had become a channel for farmers to get money, and its original purpose of regulating the market had not been well realized.

"The stimulus measures actually sharpened market fluctuation," Pan said. The government should work out a long-term plan based on the sector's development, covering industrial goals, competitive capacity, production and processing chains, backup policies, and an early-warning mechanism covering market demand, price movement and break-even point, Pan said. Priority should be given to large pig farms that could withstand risks and were more adaptable than small farms, he said.


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