Participation in High-Value Agricultural Markets

Successful Smallholder Pig Producers in an Adjusting Vietnam Market

Pork is the most important type of meat in Vietnam, accounting for about 80 percent of meat consumption. Rapid income growth and urbanization are shifting the patterns of meat consumption in Vietnam from fresh pork with a high fat content produced from local breeds to leaner pork from cross-bred or exotic breeds sold chilled, frozen, or canned.

The Australian Centre for International Agricultural Research (ACIAR) has provided funding for a project to examine changes in pork demand and their implications for pig producers in Vietnam. In particular, the project is designed to study whether changes in pork demand will squeeze small-scale pig farmers out of lucrative, growing pork markets. The project is led by the International Livestock Research Institute (ILRI), with the International Food Policy Research Institute (IFPRI) as a subcontractor and the Center for Agricultural Policy (CAP) as the local counterpart.

ILRI and CAP carried out a survey of urban consumers which showed a continued preference for fresh pork from traditional markets, which is viewed as safer than chilled and frozen pork sold in supermarkets. A meat testing component of the project confirmed this perception, revealing that pork from the supermarket had a higher bacterial count than pork in the traditional market. A survey of pig farmers revealed that smaller pig farmers remain competitive because of the lower cost of labor and owner-produced feed. The IFPRI model revealed that the modern pig sector is quite small, between 2–5 percent of the total market, depending on the definition used. Under the most plausible assumptions, modern pork consumption will grow but this will be offset by declining exports, resulting in the modern pig sector remaining at 5 percent of production over the next 10 years. Under the worst-case scenario, with rapidly changing demand, stagnant technology in the traditional pork sector, and strong technological change in the modern pork sector, the modern sector will account for just 12 percent of production after 10 years.

The implication is that current policy, which favors the development of large-scale pig production with credit and concessionary land leases, will not be able to meet the growing demand for pork. Given the continuing importance of the traditional sector over the next few decades, government efforts should be more neutral, offering assistance to improve the productivity small-scale pig farmers as well.