February 27, 2008

CPF warns that consumer price caps could force producers out of business
 

Executives of Charoen Pokphand Group have warned the government to be cautious in the capping of consumer prices to prevent problems in the production system.

The capping of pork prices could force smaller hog producers out of the business as they would not be able to cope with operational losses, said Veeravat Kanchanadul, senior executive vice-president of CPF.

The price caps could also lead to the survival of only the bigger producers, who could delay their investments and shift to more profitable industries, said Veeravat.

Veeravat said big livestock operators are now mostly engaged in producing and selling piglets to farmers who supply them on a contract-farming basis.

The measure the government should take, said Veeravat, is to increase minimum wages for low-income earners, and that the measure should be in effect for three to five years.

CPF is now looking to further expand into the processed food sector, said Veeravat.