Introduction
The total scale of China's meat industry is one of worlds' largest,China produces about 60 million tons of meat every year. But the Chinese meat industry is fragile in ways of production, production structure, and protection system.
Meat industry used not to be a major concern for the Chinese economy in the past. In recently years, however, its role has shifted from "secondary food" to a strategic importance. In 2007, meat, poultry and eggs contributed for 4.7 % of China's GDP and 40.1% of the total output of the primary industry.
Increasing food prices are one of the principal drivers of the CPI hike in 2007. Up to January 2008, CPI went up 7.1% year on year, food price up 18.2%, and pork, beef and mutton up 68.2%, 50.1%, and 40.8% respectively. In February 2008, CPI rose to 8.7%, an eleven-year high. Food was still the most important contributor to the increase, which stood at 23.3%; meat and poultry prices were up 45.3%, and pork up 64.4%.
I. Chinese Meat Industry in Transition
- Traditional ways of meat production cannot meet demand.
Aside from the rise in feed prices, issues in animal diseases, meat quality, environment protection, technology services are also factors in the meat price hike. Other reasons include decrease in agricultural land, labour migration to urban areas, unfavourable prices of hogs, piglets in relation to pork for farmers, and lack of power on the part of pig producers, most of them of very small scale, in negotiation of prices. All the mentioned is forcing small producers to quit the industry. In the province of Shandong, for example, only 20% of the farmers still keep their backyard pig farms, compared with 60% of last year. The total meat production in China decreased 3.2% in 2007, and that of pork dropped 7.8%. Frozen port inventory keeps decreasing. In 2008, with some large companies, the inventory dropped 80% compared with the same period of last year.
China's meat industry is facing an imperative issue of industrial structural reform. Strategic readjustments will have to be addressed.
- Food safety receives more and more attention from the public.
China does not have a positive reputation for food safety. The Olympics has indeed made the Chinese government commit more efforts on food safety. In August 2007, the State Council launched a four-month nation-wide safety inspection and correction campaign. Pork safety was one of the priorities. The campaign was lead by the Ministry of Commerce and jointly implemented by the Ministry of Public Security, the Ministry of Agriculture, the General Administration of Industry and Commerce, and the General Administration of Quality Supervision, Inspection and Quarantine. As a result, 1304 slaughter houses were closed due to breach of regulations, 7596 unregistered slaughter houses were banned. Food safety during the Olympics will be critical in proving China's commitment to food safety to the world.
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