June 14, 2007

China to mull subsidies and insurance for breeding industry

Recent increases in pork prices in China have prompted officials to pledge measures to stabilize pork prices, among them subsidies and insurance for the animal breeding industry.

For the first time, authorities are considering subsidy and insurance policies to facilitate the development of the breeding industry, premiums would be given to pig farmers in cases of major natural disasters and outbreaks of disease, said Zhou Wangjun, vice-director of the National Development and Reform Commission 's price department.

A combination of factors, including high feed prices and the prevalence of pig diseases have prompted a pork shortage in the country that has caused pork prices to skyrocket in recent months.

In April, piglets were priced 71.3 percent higher than they were last year. Live pigs were priced 45.2 percent higher, and pork 29.3 percent higher.

Signs that government measures were working were seen earlier when pork prices retreated by a slight 0.3 percent in the first ten days this month.

Experts predicted that pork prices would level off because the supply had stabilised and breeders are gaining confidence in the market due to high prices.

Authorities have also ruled out the use of any reserves to combat the shortage.

Zhu Xiaoliang, a deputy-director of the Ministry of Commerce's market operations department, said releasing supplies from the national pork reserves would be "unnecessary".

Authorities released reserves during the SARS outbreak in 2003 and when snowstorms hit northeastern Liaoning Province this year.