ZHOUCUN, China, Nov 5: When Zhang Faqing received a letter from the government last December ordering him to close his pig farm on the outskirts of Beijing with just two weeks notice, he thought it was a joke.
After local officials visited his farm in Zhoucun village a few days later to reinforce the message, the 47-year old realised it was no laughing matter.
Almost one year later, he is still waiting for millions of yuan in compensation promised by the government, more than a dozen pig pens that used to house his 15,000 hogs stand empty and he is still at a loss about what to do.
“I had to sell (my pigs) at whatever price the buyers offered, so I basically sold the meat at the price of cabbage. I lost so much money,” he said on a recent visit to his farm. He said he lost more than 70 million yuan ($10.57 million).
He is among hundreds of thousands of small pig and poultry farmers across the country that have been forced to close as Beijing has waged a three-year campaign to clean up the world’s biggest livestock sector.
China’s Ministry of Agriculture declined to comment for this article.
In the months ahead of the Dec. 31 deadline for complying with tough new standards, the pace of government inspections and shutdowns has increased.
That has spurred a 16-percent rally in hog prices since June amid concerns about a temporary squeeze in supplies of the nation’s favourite meat for Lunar New Year celebrations in February, the busiest season for demand.
In the long term, the policy will reshape the nation’s scattered livestock industry with a whopping 1.1 billion pigs squeezing out smallholders and boosting the share of industrial-scale farms as the government aims to develop more modern and efficient agriculture.
Backyard family-run operations with fewer than 50 pigs account for 90 percent of China’s hog farms, but only a third of supply.
With this push, big players like Guandong Wens Foodstuff Group Co. Ltd and New Hope Liuhe Co. Ltd who are building mega-farms each with millions of hogs, stand to grab a larger share of the pork market worth about 7 billion yuan ($1.06 billion).
“Pig farming in China will gradually develop into a semi-monopolistic structure, with major companies dominating the market and competing with each other,” said Zhu Zengyong, a researcher at the Agricultural Information Institute of Chinese Academy of Agricultural Sciences.