2016.6 (Issue No. 288)

I. Preface

　　Pig production value has surpassed rice since 1989 and has been a crucial domestic industry for being one of the most productive agricultural products. In order to minimize the impact brought onto pig farming industry by liberalization after Taiwan joined the World Trade Organization (WTO) in 2002, the Redressing Damage to Farmers Caused by Agriculture Imports Fund was established according to Article 9 in the “Rules for Redressing Damage to Farmers Caused by Agriculture Imports”, and further proposed the Pig Farming Industry Structural Adjustment Plan under the Industrial Adjustment and Precautionary Measure Project. Taiwan has liberalized the import of pork products since 2005. As the Council of Agriculture (COA) actively implemented various measures to adjust industrial structure with the pig farming industry sectors, the self-sufficiency rate of pork could be maintained above 90%, making it possible for the stable development of pig farming industry. Thus, the following is a brief introduction to the outcomes of pig farming industry structural adjustment in recent years.

II. Overview of domestic pig farming industry

1. According to COA's survey on pig population in November 2015, the total number of pigs on farms is around 5.5 million (7,846 farms), with an average of 710 pigs in each farm. The total number of pigs in six major counties is 4.71 million (taking up 85.6%), and they are in hierarchical order Yunlin County, Pingtung County, Changhua County, Tainan City, Chiayi County and Kaohsiung City.

2. In 2015, the number of pigs supplied to slaughterhouses was approximately 8.23 million, with 832,000 metric tons in carcass weight, and 91% self-sufficiency rate. The production value is estimated to be NT$71.74 billion, among which around 7.057 million pigs were traded in 23 meat markets nationwide. The statistics for the last five years were listed below:

3. Current situation of domestic pig auction

　　Currently the live pig auction mode in Taiwan is a unique trading system in the Asia-Pacific region. Through various supply channels such as farmers' association, cooperatives, Taiwan Sugar Corporation (TSC) and farmers, pigs are transported to 23 meat markets nationwide for individual bidding. According to “Agricultural Products Market Transaction Act”, participants should draw lots to determine the order before the auction which is conducted via computer bidding system in a fair, open and just procedure. After the auction is completed, the earning is transferred directly to farmer's account. A spot cash transaction minimizes trading risk while ensuring farmer's income.

　　There are 23 meat auction markets nationwide and the daily pig price is determined by the average of the total price of pigs for auction on that same day. The COA has also established the Livestock Pricing Information Website and the Pig Price Inquiry System (http://ppg.naif.org.tw/ naif/MarketInformation/Reference/reference.aspx), where the auction price and trading volume are released daily in real-time. Farmers, dealers and consumers are able to access the information easily, which also serves as a reference for farmers to determine the best timing to sell.

4. Pork consumption in Taiwan

(1) According to Food Supply and Demand Yearbook, in 2014 the total annual consumption of meat (not including fish) in Taiwan per person was 74.31 kg, among which pork took up 46% (34.18 kg), poultry 45.4% (33.7 kg), and beef 6.9% (5.16 kg). Obviously pork is still the preferred choice of meat in Taiwan. Nevertheless, in the last decade, the national average annual consumption of pork dropped from 40 kg/person/year in 2006 to 34.18 kg/person/year.

(2) Pork consumption can be divided into fresh meat, chilled meat and frozen meat. Currently 70% of the total consumption comes from fresh meat and the self-sufficiency rate is over 90% in general. As for the imported frozen meat, it is used mostly for processing and catering.

III. Main measures and achievements of the Pig Farming Industry Structural Adjustment Plan

1. Expedite industry structural adjustment to exert combined effectiveness of industrial resources

 (1) Improvement and supply system of breeding pigs: By means of verification, registration, genetic screening, descendant carcass rating, and health capacity strengthening, the growth, production, feed efficiency and carcass quality of breeding pigs could be improved. Promote the supply of outstanding boar semen which averaged 170,000 dozes per year for the past four years. In 2013 the COA counseled pig farms to reinitiate breeding pigs export to Vietnam and Hong Kong. As a result, a total of 1,232 breeding pigs including 270 in 2013, 85 in 2014, and 877 in 2015 were exported to the Asia-Pacific Region.           

(2) Reduce the ratio of breeding boar against breeding sow in pig farms: In 2012 it was 1: 27.2 and has gradually increased to 1:28.9 in 2015. In 2015, boars on farm were 5,000 fewer than those in 2012, which could reduce the cost of raising boars for pig farms. 

(3) Advocate production medicine of swine: Introduce the technique of production medicine from developed countries and follow the correct concepts of biosafety, vaccine utilization, and proper medicine application to reduce the risk of horizontal transmission and invasion of epidemics in the farms. In recent years the COA continued to encourage traditional farms to adopt new production systems such as batches, age classification, off-site and multi-site in order to reduce the cost of feed, medicine and energy. Under such counseling service, the new-model pig farms can increase rearing rate by 10% to 15% whereas the market age can be shortened by 10%. In 2005, it was estimated that each sow in the country contributed to 12.6 head of pigs for the market, while the average number of pigs kept in a farm was 532 heads. Those numbers increased in 2015 to 15.8 and 710 respectively. The new farming technique fostered the corporate management of pig breeding and higher overall operational efficiency of pig farms.

(4) Promote relevant production technology of pig farming industry: Set up expert technical teams to visit farms and carry out on-site inspection and counseling, which could adjust the business structure of farms and increase production efficiency. In the last four years, over 350 sessions of on-site assessment and technical service were conducted every year. Furthermore, there are also more than 5 seminars about pig production technology on artificial insemination and breeding technical promotion each year.    

(5) Establish pig production and marketing adjustment system: Every year the Council invites local governments to set up pig production goal and implement the planned production based on industry status and market demand in accordance with the” Animal Industry Act”. Moreover, organize distribution information assessment conference every quarter to analyze domestic and foreign distribution data in order to consolidate the transparency of livestock information. Hold pig distribution adjustment conference every month to grasp the market changes and counsel industry groups and meat suppliers to adjust production and distribution accordingly. In 2015 the number of coordinated pig supply was 7,086,437, while the actual supply was 7,069,622, achieving an accuracy of 99.76% with an error of merely 0.24%. In addition, control the pig trading information at all times and hold emergency coordination meeting to activate necessary supporting measures when needed. Two conferences were added in April and July, 2015 to discuss the adjustment measures for maintaining stable pig production and distribution.

2. Strengthen the industry’s autonomous management, provide counseling on establishing traceability system and expand the promotion of accreditation system

(1) The COA has been promoting the TAP system for pork products since 2006, and has counseled pork industry chain businesses, including livestock farms, slaughterhouses and meat-packing facilities, to pass the TAP system accreditation. In 2015, a total of 76 companies, including 56 manufacturers and 20 distributors, passed the certification. Moreover, up to the end of 2015, there were a total of 117 businesses belonging to the pig farming industry chain that passed the TAP system accreditation.

(2) Raise the supply quality and quantity of TAP pork products. The supply (labeled) volume of TAP pork product in 2015 was 822 metric tons, which is a drastic growth compared with 630 metric tons in 2014. Additionally, in order to elevate the quality of domestic TAP pork product, the Council continued to conduct administrative inspections and random product sample examinations in certified livestock farms, slaughterhouses, meat-packing facilities and retailers. In 2015, 810 administrative inspections were carried out and 1 case of packaging labeling violation was taken over by local government to be sanctioned accordingly. Furthermore, 268 commercial products passed random sanitation and quality inspection.

3. Advocate distributed management, boost local production and local consumption, establish market segmentation

(1) Combine different resources from local governments and industry groups. In the last four years, the COA held over 30 multiple marketing events to promote local production and local consumption of domestic pork. Besides enhancing domestic pork marketing events and offering consumers safe quality pork products, the Council also explained the production process to the consumers, as well as how to select and prepare domestic pork in order to enjoy fresh local products and healthy consumption. Continue to promote food and agriculture education to consolidate people's impression on domestic pork and local production so that imported pork products can be differentiated in order to maintain the domestic pork self-sufficiency rate.

(2) On June 16, 2014, the Chilled, Frozen and Defrost Pork Enzymes Activity Test Method was announced as the National Standard Act and listed as one of the CAS-certified product inspection items. In the same year, the COA counseled retailers to clearly segment frozen, chilled, and defrost pork by labeling, and carry out random inspections to effectively differentiate it from imported product. In 2015, the COA checked 75 product items from 605 companies selling frozen, chilled, and defrost pork and all of them passed the inspection. 

4. Promote value-added agricultural processing and encourage the establishment of brand

(1) Actively promote pig integrated management and cooperative marketing. In the last four years, the Council has supervised pig farming cooperatives to organize 10 pig joint marketing and educational trainings, and rewarded top 15 pig cooperatives for their efforts in joint marketing. Moreover, organize 2 domestic pork branding seminars each year to enhance organizational cooperative logistic and marketing through integrated pig farming management, joint marketing, and brand pork promotion among others.

(2) In the last four years, the COA assisted local governments to organize diverse marketing programs and exhibition sales every year on brands such as Healthy Pig, Natural Pig, Happy Pig, and TaiChyuan Treasure Pig. In the last two years, the COA assisted 8 pork brands to enter e-commerce so as to expand branding operation and sales revenue. Through counseling promotion, the supply of domestic brand pork reached 2630 metric tons in 2015.

(3) Continue to counsel meat market sectors to upgrade or improve meat market electronic trading system, peripheral equipments and facilities, subsidiary slaughterhouse equipment renovation. From 2013 to 2015, 14, 7, and 11 modernization improvement projects have been completed. Thanks to the replacement of energy-consuming installations, upgrade of auction systems, and relevant peripheral slaughtering equipments, the pig auction efficiency and accuracy, the standard of slaughtering equipments and slaughtering operation efficiency were elevated to ensure meat sanitation and safety for consumers.

(4) Counsel vendors in traditional markets to adopt the Taiwan Fresh Pork (TFP) controlled-temperature vending system. A total of 85 vendors have successfully transformed or improved into TFP in three years, including 20 in 2013, 20 in 2014 and 45 in 2015. Besides, over 400 cases of TFP vendors’ meat are inspected for sanitation and safety every year.

 IV. Conclusion

　　In recent years, under the trend of globalization, countries around the world signed Free Trade Agreements (FTA) or Economic Partnership Agreements (EPA) to speed up liberalization and internationalization, and to strengthen regional economic integration and reduce investment barriers. Taiwan is actively seeking to join the Trans-Pacific Strategic Economic Partnership Agreement (TPP) and the Regional Comprehensive Economic Partnership (RCEP) which are listed as important government policies. It is expected that the members of such agreements would regard the market access and tariff reduction of pork (including ractopamine pork) as crucial issues during negotiations, which would impact domestic pig industry and intensify the pressure of competition from imported products. Therefore in the future, during trade negotiations, the Council would actively seek for the extension of tariff reduction schedule, non zero-tariff, and tariff rate quota to minimize the impact on pig farming industry.

　　Currently Taiwan is still listed as the major epidemic area of infectious swine diseases, resulting in the ban of fresh pork exportation; thus the pig industry prioritized the domestic market over the foreign market. Relevant supporting measures include elevating breeding pigs productiveness, reducing production cost and increasing operation efficiency, bolstering distributed management of imported pork and its segmentation from domestic pork by labeling, enhancing veterinary medicine control, effectively elevating pollution prevention, and encouraging businesses to utilize green energy, among others. The COA would continue to implement industry counseling service and promote various supporting measures. It would also support government policy and continue to conduct pig farming industry structure adjustments so as to reduce production cost, increase business efficiency, and extend industrial value chain, thus assisting domestic businesses to upgrade their efficiency and quality, while becoming an industry that protects the environment and possesses international competitive advantage at the same time.

Pig auction in Taoyuan Meat Market.

Central Government officials conduct breeding pig verification and auction.