The controversy over importing US pork with leanness-enhancing additives continues to rage on and, for the short term at least, there does not appear to be a solution in sight. In addition to the important considerations of public health and food safety, there are also the objections of domestic pig farmers. Large volumes of US pork imports would have a significant effect on most Taiwanese pig farmers, considering the lower cost of producing pork with ractopamine-laced animal feeds compared with the cost at which domestic farmers produce it.
The incoming government is keen to emphasize its intention to enforce clear labeling for the sake of market differentiation.
However, considering the problems distribution channels are facing to deliver the products to consumers or the catering market, as well as legal loopholes, the government must address the issue of establishing the public’s trust in the bureaucracy.
The majority of pig farms in Taiwan are household farms: small-scale operations producing mainly for the domestic consumer and accounting for 98 percent of the domestic market. Given the tariffs, price controls and the limits on pork imports, the price of pork can be maintained at an average of NT$70 per kilogram, at which farmers can be assured of a certain amount of profit. The minute US pork imports are allowed, the price of pork would fall significantly and domestic pig farmers will find it difficult to make ends meet. Government officials are going to have to think a lot harder to work out how to allow domestic farmers operating in such a fiercely competitive environment to retain the upper hand. It will take a lot more than simply providing short-term subsidies.
British management guru Charles Handy has suggested a method that Taiwan could follow to find a solution, in his book The Second Curve: Thoughts on Reinventing Society.
According to Handy, the development of each and every entity — be it an industry or government, or even an empire — follows an “S” curve, that is, from climbing from the beginning until the curve reaches a peak and starts to decline; the only difference being the length of the curve.
To avoid being blinded by the success of the first curve, Handy emphasizes the need to start developing a second when the first curve has yet to reach its apogee.
This, according to Handy, is the only way to maintain control over sufficient resources — such as money, time and energy: by keeping things together until the start of the second curve and then creating a new peak in the sector.
This thinking can be applied to the problem at hand. When addressing the threat of pork imports — including US pork containing traces of ractopamine — Taiwanese industry, government and academia needs to combine their resources to reach a new peak. They should coordinate with each other on research to ensure that their resources are not spread too thinly. Together, they can formulate a completely new pig farming model and bring about a second curve for the industry.
There should be priorities. The first consideration would be choosing an optimal pig breed, taking into account factors such as climate change, environmental sustainability and limited soil and water resources.
The second consideration would be seeking cooperation between biotechnology companies and information and research specialists, or private companies, to breed an entirely new species of pig, like the Spanish cerdo iberico, the black Iberian pig, also known as “the Rolls Royce of meat.” Next, they would choose the companies most experienced in pig farming and the best locations so that they can rapidly exercise the techniques to rear the new breed most effectively. These would cover feed and nutrition, disease control, everyday management and waste management, followed by developing the techniques and equipment required for the distribution of fresh meat, as well as processing techniques to create new products, and finally using information technology and the Internet to develop brand distribution channels to cut out intermediaries. This is the way the nation’s pig farming industry can develop a second curve: using new technologies and market mechanisms.
A number of domestic pig farms have done quite well on embarking along their second curves. Some of the examples are San Jeou Farm and San Yuan Pig Farm, both of which have products that have been received well by a certain group of consumers, so the companies have little to fear from US pork imports. Making products that stand out would bring higher returns, invariably more so than by simply producing more of the same.
Whether it comes after the ban on US pork imports are lifted, the domestic pig farming industry must have the courage to move on and transform itself for the sake of public health and the industry’s sustainable development. The government can provide subsidies, but in addition, and more importantly, it also needs to apply new ways of thinking.
When the rest of the world is going through so many changes, how can the government stand by and let things continue as usual?
Lee Wu-chung is a professor of agricultural economics and a former director of the Yunlin County Department of Agriculture.
Translated by Paul Cooper
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