June 22, 2007

China offers subsidies, insurance to pig farms as pork prices surge
 

China will provide subsidies and set up an insurance system for the country's pig industry in response to a recent surge in pork prices, the Ministry of Finance said Friday (Jun 22).

Pork prices have risen rapidly this year, in part because of an outbreak of blue ear disease. Average pork retail prices in 36 mid-to-large cities in China rose about 20 percent in May from April, driving a rise in food and beverage inflation.

The government will set up a fund to create a sow insurance system, for epidemic diseases and other disasters, according to guidelines published on the ministry's website.

Measures include giving farmers who use the system RMB50 a year per sow that they insure, as well as subsidising compulsory blue ear disease vaccinations. RMB285 million had already been spent vaccinating pigs against the disease, the ministry said.

Blue ear disease, also called porcine reproductive and respiratory syndrome, has killed more than 18,000 pigs in 22 Chinese provinces and regions in the first five months of this year.

The plan also includes subsidies to people on low income to compensate them for the rise in pork prices, improvements in the price monitoring system and a build-up of the nation's meat reserves.

The ministry estimated total subsidies to the pig industry at nearly RMB6.5 billion this year.

RMB1=US$0.1311 (Jun 22)