Poster prepared for the ILRI Annual Program Meeting (APM) 2010, held at ILRI campus, Addis Ababa, Ethiopia, April 14-17, 2010.

1. Enhancing the competitiveness of smallholder pig producers
in an adjusting Vietnam market
OBJECTIVE
Identify pragmatic options about technology, institutional arrangements and policy interventions to improve the competitiveness of smallholder
pig producers in an adjusting Vietnam market.
Component 1: Consumer demand analysis METHODOLOGY
Assessing demand for different attributes of pork as a Consumer survey
driver for pig production, market potential and Urban households in Hanoi and Ho Chi Minh City
implications for smallholders’ involvement and and rural households in six provinces
competitiveness. representing six agro-ecological zones in Vietnam
Component 2: Producer analysis
Examining current smallholder practices and
performance to identify areas where smallholders can
Producer survey
Household producers and non-producers of pigs
compete, what should change and policy, technology and in 6 provinces
institutional support for these changes to take place.
Component 3: Market actor analysis Market actor survey
Investigating market actors and linkages between supply Market intermediaries in thre representative
and demand.
provinces in north, central and south Vietnam
Component 4: Pig sector modelling
Modelling the linkages and dynamics in the pig sector
Pig sector partial equilibrium modelling
and projecting pig sector development under various
policy scenarios.
Component 5: Policy advocacy and
communication
Facilitating dialogue among stakeholders about key
messages from research findings to ultimately influence
local and national livestock policies.
MAIN FINDINGS
Demand for pork
 Pork is the dominant type of meat in the Vietnamese diet and will probably remain so in the future, accounting for 30–40% of total meat
expenditures of households surveyed (see Figure 1).
Figure 1: Meat expenditure share
 Demand for pork and other meat will increase considerably with growing consumer affluence. Consumers, however, tend to diversify
towards other meat products such as poultry, beef and seafood as income rises.
 There is a strong preference for fresh pork, which constitutes a natural market protection from imported pork in chilled, frozen or
processed forms.
 Traditional open markets are still the main outlets for daily pork shopping (see Figure 2).
 Pig disease and chemical residues are the main concerns of meat consumers with respect to food safety. During outbreaks of diseases,
consumers tend to reduce meat consumption and/or shift to modern outlets for meat purchase which are considered safer.
 Risk assessment of pork supply chain in Hanoi and peri-urban areas showed that pork sold in traditional markets is no less safer than
that sold in supermarkets.
Figure 2: Market outlets for pork
Supply of pig: Smallholder perspective
 Household pig producers play an important role in supplying market demand, a situation that will likely continue in the next few decades. Currently, household pig production accounts for at least
70% of total pork supply in Vietnam.
 Pig rearing provides an important source of income and household employment in the absence of alternative livelihood options. Women make significant contribution to pig husbandry.
 Access to improved breeds is associated with scale. Improving breed quality that fits smallholder conditions is critical in improving pig quality and productivity.
 High and rising feed cost is a critical constraint to pig producers, with purchased feed as a proportion of total feed cost rising with scale (see Figure 3). Expanding options for own produced feeds, in Figure 3: Percentage share of own produced vs.
terms of choices and quality, can potentially enhance smallholder competitiveness. purchased feed
 Under current conditions, small household pig producers are still able to generate incomes from pig rearing by exploiting areas where they have cost advantages, given low labour opportunity cost
and lower cost of own produced feed and crop by-products. (see Figure 4)
Market access and linkages among market actors
 There are no clear differences in smallholders’ accessibility to input suppliers despite the fact that there is price differential across scale, probably due to transaction cost.
 Smallwith share rising producers appear to be5). to capture a reasonable share of end product prices, suggesting a reasonably competitive output market, although there are differences across
scale,
household pig
with scale. (see Figure
able
Figure 4: Price-cost and gross margin-cost ratios
CONCLUSION AND IMPLICATIONS
 Market opportunities exist for household pig producers as the economy grows and consumer incomes rise. Consumer preference for fresh pork and for traditional market outlets favour small
household producers’ participation in pork value chains and provide natural market protection against imported pork.
 Small household pig producers are competitive and able to generate income from pig production as long as they can exploit areas where they have cost advantages. For the next few
decades, smallholder pig rearing will continue to play an important role in pork supply, poverty reduction and household employment generation, especially for women in Vietnam, as a transition
strategy during the ongoing structural transformation of the rural sector.
 Policiesto support access to better technologies (breed and feed) and services that are appropriate to household pig production systems would considerably enhance smallholders’
Figure 5: Share of retail pork price captured by pig producers competitiveness and sustain their effective participation in Vietnam’s adjusting market for pork.
The good news is … And the bad news is …
Pig rearing is an important and viable livelihood and employment option for Food safety is an increasing concern among consumers in Vietnam, putting at
poor households in Vietnam. risk the viability of household pig production, with imposition of policies and
regulations to address animal disease and other food safety risks.
April 2010
ILRI
INTERNATIONAL LIVESTOCK RESEARCH INSTITUTE