July 29, 2003

 

 

Reorganization of China's Poultry Industry is Key to Improving Competitiveness in Global Markets 

 

As China's poultry industry becomes increasingly plugged into global markets, it has placed higher emphasis on the importance of safe and healthy poultry products, in line with greater consumer awareness. 

 

Issues such as product quality, pollution-free production facilities and export-oriented system of industrialized operations, have also become important concerns to increasing number of people in the industry.

 

To survive and thrive under the more dynamic environment of the global market, local experts suggest that China's poultry industry should consider adopting the following measures:

      

1.  Standardization of poultry production and quality control procedures with emphasis on hygienic methods of production.  This move is essential for China's large group of small-scale poultry production enterprises to grow and strengthen their operations.  It encompasses the following aspects:

  • Establishment and certification of pollution-free facilities for the production of high-quality poultry;
  • Adoption of technical standards for poultry stock selection, feed quality, quality of drinking water, disease prevention and poultry rearing facilities; as well as the implementation of clear operating procedures and strengthening of control on the use of vaccines, quality of feed, drug residues, waste management etc;
  • Setting up of a comprehensive quality inspection system to conduct sample checks on consignments of poultry products meant for different market segments, like the supermarkets, wholesale market and retail market;
  • Stringent supervision and control on the implementation of relevant official policies, regulations, procedures and standards pertaining to poultry rearing and production. 

2.  Focus on the breeding and production of quality stocks.  China, with its diverse range of quality stocks of broilers and layers, has a comparative advantage in this area.  This comparative advantage could be further developed by cross-breeding quality stocks of local chickens with imported stocks of highly productive layers, to produce new breeds of premium quality layers, thereby, enhancing the quality of poultry eggs in China.

 

Under current market condition where poultry supply exceeds demand, keen market competition has depressed the product prices of the more commonly available poultry stocks, whereas the prices of higher quality poultry continued to stay at higher levels.  Hence, it is essential for China's poultry industry to develop better quality poultry stocks and products to obtain a competitive edge, in its efforts to increase its poultry exports.

 

3.  Industrialize and improve the operational structures of poultry production enterprises.  This can be achieved through:

  • Expeditious development of facilities for the production of premium quality poultry;
  • Implementation of appropriate marketing strategies and active promotion of brand names of Chinese poultry production enterprises to increase consumer awareness of their brands;
  • Development of delivery centers and new sales outlets in chain stores and supermarkets;
  • Identify and nurture industrial leaders; facilitate extension of related production chain;
  • Development of large-scale industrialized enterprises by encouraging organizational restructuring and the setting up of modern poultry rearing farms as well as production plants.  Such large-scale intensive industrial operations should have distinct organizational entities in charge of organizational management, poultry farm and production plant operations.  This would provide opportunities for part-time rural farmers lacking in financial resources and technical or management know-how to be employed as full-time workers in large-scale poultry farms.  In this regard, provision should be made for some sharing of ownership between the organizational management and farm operators.

4.  Diversification in the use of available resources to increase the export-orientation of China's poultry industry. Currently, China's poultry exports account for only less than 2% of its total production.  In moving China's poultry industry to a higher level of export orientation, there should be diversification in the use of available resources and to develop new markets:

  •  Adopting the advanced technology as well as management know-how of foreign countries, low-cost labor-intensive products could be produced for export.  Through the foreign exchange system, higher rates of return could be reaped from these global exports;
  • Intensify efforts to attract large foreign enterprises to invest in China's poultry industry, either through joint-ventures or wholly-owned enterprises, Chinese enterprises should also "venture out" to invest in poultry farms and/or poultry processing enterprises in other countries.  The objective of "venturing out" is to capture a share of the local markets in these countries;
  • Consolidate and expand traditional export channels to capture  shares in newly developed markets, when faced with "green barriers" erected by countries or economic blocs, relevant WTO regulations should be used as a recourse to deal with them, so as to expand China's export quota in these countries;
  • Capture a larger share of the global export market by fully exploiting China's abundant availability of premium quality poultry stocks - to produce a special range of "good quality, safe and healthy" poultry products for the global export market.