Reducing disease risks and improving food safety

in smallholder pig value chains in Vietnam: What have we learned from previous work?

Ma. Lucila A. Lapar

On behalf of the Project Team

Project Inception Workshop

Hanoi, Vietnam

14 August 2012

Demand for pork in Vietnam

Meat expenditures

Pork accounts for 40% of meat expenditures by Vietnamese household consumers.

Preference rating for pork

Vietnamese consumers have a strong preference for fresh, unchilled pork; this provides natural protection from imported pork.

Changing nature of demand for pork

The majority of Vietnamese consumers indicated preference for lean pork compared to other types of pork. No significant change in lean meat consumption from 10 years ago, but significant reduction in consumption of high fat meat from 10 years ago.

Preferred market outlets for fresh pork

Traditional market outlets remain the most preferred purchase outlets for fresh pork by Vietnamese consumers.

Supply of pork in Vietnam

Dominance of pork in livestock total output

Year Pig Chicken Cattle Others Total

1990 65 11 14 10 100

2000 68 14 9 9 100

2005 72 12 8 8 100

2009 62 13 11 14 100

Household pig production supply at least 80% of Vietnam’s pork. But growth in supply has failed to keep pace with rising demand, resulting in accelerated increase in real pork prices.

Source of data: FAOSTAT 2009.

Supply of pork in Vietnam

Most Vietnamese pigholding households keep very few pigs but on average the size of their herds is slowly rising. Although not shown, the percentage of pigholding households with 21 pigs or more rose from 0.3% in 2001 to 1.75% in 2006. 

Projected share of pork supply from large-scale producers

0%

2%

4%

6%

8%

10%

12%

14%

0 1 2 3 4 5 6 7 8 9 10

Shar

e of

larg

e-sc

ale

mod

ern

sect

or in

pig

pro

ducti

on

Year

Base simulation

High income growth

High tech growth in modern sector

No tech growth in traditional

No tech growth in maize

High income elasticity of modern

High income elast and tech growth in modern

Worst case for traditional sector

Competitiveness of smallholders

Scale definition in household pig production

Small-scale Medium-scale Large-scale

Farrow-to-wean 1 sow 2-3 sows 4 sows or above

Farrow-to-finish 1 sow 2-3 sows 4 sows or above

Grow-to-finish Less than 15 heads From 16 to 40 heads More than 40 heads

Production system definition:Farrow to wean – piglet productionFarrow to finish – full cycle slaughter hog productionGrow to finish – pig fattening operation

Rates of return

Household-based pig producers earn revenues that can cover costs and generate some positive profits.

Gross margin (‘000 VND per kg output)

Household-based pig production can generate gross margins ranging from 4,000 to 15,000 VND/kg liveweight of pig produced.

Cost per unit output in household-based pig production

Economies of scale in piglet production; no significant difference across scale full cycle slaughter hog production and pig fattening

Feed-use efficiency (in maize equivalent)

Increasing the proportion of own-produced feed to total feed use can decrease total feed cost. This provides cost advantage to small producers that use higher proportion of own-produced feed.

Cost-efficiency and economies of scale

Own produced feed is cheaper per unit of feed value.

As farm size increases:

Proportion of purchased feed increases

Effective unit cost of feed increases

Feed costs account for at least two-thirds of total costs.

Small producers can exploit this cost advantage to improve their competitiveness.

Contributions to household income and

employment

Share of pig income in total household income

Income from pigs accounts for about 14% of rural household income, or 24% of rural household income from agriculture.

Value added along the pork supply chain where household

producers participate

Value added generated in pork value chains where household pig producers participate is about 11,700 VND per kg liveweight (or $0.62)

Share of retail price that accrues to producers (based on

average pork retail price of 40,000VND/kg in 2007)

Producers receive at least half to two-thirds of the retail price of pork. This share increases with scale.

56%63% 65%

60% 61% 65%

Small Medium Large

Farrow to finish Grow to finish

Employment generation in household pig production

Smallholder pig production generates employment estimated at about 4 million full-time labor along the pork supply chain, valued at about $3.3 billion or approximately 5.5% of Vietnam’s GDP in 2007.

Household labor constitutes the main labor inputs in household pig production.Women labor accounts for at least half of total labor days in household pig production.

Emerging concerns of food safety

Nearly half the consumers (43%) had concerns about pork.

Most common was fear of disease from pork, followed by fear of chemical contamination, un-fresh pork, and bad smell.

Only 1% expressed nutritional concerns.

Average ranking of major concerns about meat safety

HN HCMC AllDiseases of livestock 1.2 1.1 1.2Hormone used in animals 2.8 3.0 2.9Antibiotic use 3.0 2.9 3.0Hygiene in market outlet (including meat seller)

3.8 2.6 3.2

Hygiene in slaughtering 3.9 2.8 3.4Concentrate feeding of animals 3.7 4.1 3.8Other 3.5 3.1 3.2

Animal diseases tops the list of major concerns of urban consumers about meat safety.

Consumer response to pig disease outbreak

•About half of consumers either stop or reduce pork consumption; about one-third substitute other meats.•More consumers in HCMC than in Hanoi shift to modern outlets for pork.

Proportion of pork samples that did not meet standards for different

hazards

•High level of microbial contamination in pork sold in Hanoi and Ha Tay.•Fecal contamination is greatest contributor to bacterial load, likely to be at slaughter point.•Pork sold in supermarkets contains significantly higher hazards than pork sold in wet markets.

Hazards vs. RiskAlthough hazards were high, pork consumers report low levels of gastro-intestinal disease (1 episode/person/year).

There is no association between amount of pork consumed and incidence of gastro-intestinal disease (p=0.60).

There is strong positive association between consuming vegetables and reporting illness (p=o.006).

Implications on production efficiency Smallholder pig producers are competitive in

producing pork that meet the demand requirements of Vietnam’s fresh meat market.

Household pig producers are able to generate incomes from pig raising by exploiting areas where they have cost advantage.

Expanding options for own-produced feeds, in terms of choices and quality, can enhance their competitiveness, particularly in areas that are far from commercial feed sources, and complemented with improved access to extension.

Limitations in available land and household labor will be constraints to scaling up by household pig producers.

Implications on economies of scale Within smallholder piglet production, marginal

increases in scale can reduce cost and increase profitability (e.g., from 1 sow to 2-3 sows).

Due to lack of economies of scale in household pig

production (except in piglet production), continued

support to household pig production will likely improve

overall efficiency of the industry.

It is not clear that policy support and investment in large scale operations will reduce unit cost of pork production or increase employment.

Implications on food safety

Growing awareness among consumers about food

safety will shape emerging demand for pork and

supply response.

Food safety policy should be based on evidence;

currently risk to human health by pork is not fully

understood.

Food safety policy should be based on risk rather than hazards; risks must be distinguished from hazards.

Risk is multi-source, and various transmission pathways for diseases including waste water and urban/peri-urban agriculture need to be considered.

The New Project: Research Questions What are the human health risks and economic costs

of pork-borne diseases in smallholder pig value chains

in Vietnam? What are the critical control points /

opportunities for risk management?

What is the added utility of risk-based approaches to

food safety and pork-borne disease (that focus on

human health impacts) compared with current hazard-

based approaches (based on presence of pathogens

in pork)?

What is the most appropriate role for incentive-based innovations in improving management of human and animal health risks in these smallholder pig value chains?

Goal of the Pig Risk Project

To improve the livelihoods of rural

and urban poor in Vietnam

through improved opportunities

and incomes from pig value chains

as a result of reduced risks

associated with pork-borne

diseases.

Objectives of the Pig Risk Project To assess impacts of pork-borne diseases on human

health and the livestock sector and identifying critical

control points/opportunities for risk management.

To develop and test incentive-based innovations to

improve management of human and animal health

risks in smallholder pig value chains.

To sustainably improve capacity to assess and manage risks to smallholder pig value chains by engaging smallholders and co-generating evidence.

International Livestock Research InstituteBetter lives through livestock

Animal agriculture to reduce poverty, hunger and environmental degradation in developing countries

Project website: www.vietpigs.com.vn

ILRI  www.ilri.org