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Weekly Overview: Chinese Government Policy and Opportunities for Pork Exports

17 February 2014

GLOBAL - A new report looks at the development of agriculture in China, which includes government encouragement for large, modern farms of all types, writes Jackie Linden. At a recent conference, the UK's farming minister talked about the great potential for pig meat exports to countries such as China. Meanwhile, there have been new cases of African Swine Fever in Russia and in Canada, Porcine Epidemic Diarrhoea has now been reported in a second province, Manitoba.

According to a recent report from Rabobank – 'New Chinese Agricultural Policy' – new policy adjustments in China will address balancing the pace of urban and rural development, usher the adoption of mechanisation and new technology in the agricultural system, and facilitate the timely transfer of land use rights in order to create economies of scale.

“Agriculture has been the backbone of the Chinese economy for thousands of years,” states Rabobank analyst, Chenjun Pan.

“The pressures associated with feeding a population of 1.3 billion has meant that the domestic agricultural industry is strategically important to national food security. The decisive and supportive role of the Government in agricultural development in China has facilitated new growth in food demand, and farmers’ incomes are expected to grow faster than ever before.”

Agricultural development has always been impacted by policy, according to the report.

From a land perspective, China’s current agricultural system is based on small-scale production. This fragmented and uncoordinated supply chain cannot meet urban requirements for food safety and quality, yet small farmers are responsible for the majority of agricultural output.

This has driven the establishment of large commercial farms where both standardised operation and government monitoring is easier. Rabobank expects these farms to continue growing rapidly. Increasing the average scale of household farms to a level at which modern agricultural practices can be adopted will be therefore be key.

Thanks to the Government’s framework for the regulation of land use rights transfer, large areas of land can now be planted collectively, greatly facilitating mechanisation and enhancing efficiency and productivity.

New types of farming organisations, such as cooperatives, family farms and specialised large farms, have emerged since land use rights transfer has become possible. The coexistence of these new types of farms has quickly become a new, important source of agricultural production.

Meat and dairy exports present a huge opportunity for the UK food sector particularly with new markets opening up in countries such as India and China.

Agriculture minister George Eustice, speaking at the AHDB Outlook Conference in London last week, said that exports offer great opportunities for British agriculture particularly with a growing global population demanding more food.

He said he was hopeful on new opportunities for UK pork exports into regions outside of the EU in countries such as China.

On the domestic market, the minister said that consumers are now asking more questions about the origins of the food they eat and supermarkets are taking note of the consumer demand to know where the food comes from.

To this end, they are changing their approach and offering more locally sourced foods so that consumers do not have to only visit the farm shop to buy products that are locally produced.

Turning to news of pig diseases, the Office of Chief Veterinary Officer (CVO) has confirmed the first case of the Porcine Epidemic Diarrhoea in Manitoba, following previous outbreaks in Ontario.

Also in the last week, African Swine Fever has been confirmed in a total of nine wild boar found dead in the Rostov and Tula regions of western Russia.

Jackie Linden

Jackie Linden

Top image via Shutterstock

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