Presented by Lucila A. Lapar at the workshop: Pathways to Impact: Pig Value Chain Development Potential in Vietnam, Vinh City, Vietnam, 27-28 September 2013

1. The state of smallholder-based pig industry in
Vietnam: insights from ILRI’s recent research
Ma. Lucila A. Lapar
Pathways to Impact: Pig Value Chain Development
Potential in Vietnam
Vinh City, Nghe An, Vietnam
27-28 Sept. 2013

2. The challenge
 Can research accelerate livestock and aquaculture
development to benefit the poor?
o Mixed record to date
o Systematic under-investment
o Also related to our research-for-development
model?
 Focus of new CGIAR Research Program
o Increase productivity of small-scale systems
o ‘by the poor’  poverty reduction
o ‘for the poor’  food security

3. Correcting perceptions
1. Animal-source foods are a luxury and bad for
health, so should not promote
2. Small-scale production and marketing systems are
disappearing; sector is quickly industrializing
3. Livestock and aquaculture development will have
negative environmental impacts

4. Our underlying hypothesis
 Livestock and Blue Revolutions: accelerating
demand in developing countries as urbanization
and incomes rise
 Industrial systems will provide a large part of the
needed increase in supply to cities and the better-
off in some places
 But the poor will often continue to rely on small-
scale production and marketing systems
 If able to respond, they could contribute, both
increasing supplies and reducing poverty
 …and better manage the transition for
many smallholder households

5. Goal
• To sustainably increase the productivity of
– small-scale livestock and fish systems to
increase the availability and affordability of
animal-source foods for poor consumers
and,
– in doing so, reduce poverty through greater
participation by the poor along the whole
value chains for animal-source foods.

6. Inputs & Services Production Processing Marketing Consumers
Past research has focused specific aspects
of given value chains, commodities and country.
Inputs & Services Production Processing Marketing Consumers
...in Country A
Inputs & Services Production Processing Marketing Consumers
Inputs & Services Production Processing Marketing Consumers
...in Country D
...in Country C
...in Country B
Basic Idea: Solution-driven R4D to achieve impact
Traditional approach was piecemeal

7. Strategic CRP 3.7 Cross-cutting Platforms
• Technology Generation
• Market Innovation
• Targeting & Impact
Inputs & Services Production Processing Marketing Consumers
R4D integrated to transform selected value chains
In targeted commodities and countries.
Value chain development team + research partners
GLOBAL RESEARCH
PUBLIC GOODS
INTERVENTIONS TO
SCALE OUT REGIONALLY
#1: Addressing the whole value chain
Major intervention with development partners
Approach: Solution-driven R4D to achieve impact

8. CRP3.7Prepareintervention
Development Partners
$90m
Performance Target:
double production in
x poor households Scaling out
Knowledge Partners $10m
Time 10 years
CRP3.7 Strategic Research $10m
#2: Working toward interventions for impact at scale
Approach: Solution-driven R4D to achieve impact

9. Approach: Solution-driven R4D to achieve impact
#3: Focus on 9 target value chains

10. Technology
development:
1 Health
2 Genetics
3 Feeds
Inputs & Services Production Processing Marketing Consumers
Commodity X in Country Y
4 Value chain development
5 Targeting: Foresight, prioritization, environmental impacts
6 Cross-cutting: gender, impact, M&E, comms, capacity
building
Structure: Six integrated components
Delivering the Program

11. Context of a changing Asia
• Economies are growing rapidly.
• Incomes are rising in at least a proportion of
the population.
• Dietary patterns are changing.
• Climate change and other environmental
challenges are becoming front and center of
development issues that need to be tackled.
• All these have implications for the livestock
sector and for the poor who depend on
livestock.

12. Key drivers of changing livestock landscape
in Asia
• The rural-urban divide.
• Rapidly growing demand and rising prices for livestock
products.
• A food retail revolution, supply chain adjustment, and
importance of traditional local markets
• Trade liberalization.
• Endemic, emerging, and re-emerging diseases,
• Environmental concerns.
• Changing production systems.
• Evolving policy needs.
• Increased donor interest in agriculture.
• Changing roles of public and private sector.

13. Some highlights from recent ILRI
studies in Vietnam
Pork value chain

14. Employment generation in household
pig production
Smallholder pig production generates
employment estimated at about 4 million full-
time labor along the pork supply chain,
valued at about $3.3 billion or approximately
5.5% of Vietnam’s GDP in 2007.
Household labor constitutes the main labor
inputs in household pig production.
Women labor accounts for at least half of
total labor days in household pig production.

15. Meat expenditures
Pork accounts for 40% of meat expenditures by
Vietnamese household consumers.
0
5
10
15
20
25
30
35
40
45
Current 10% 20% 50% 100%
Fresh pork
Fish
Poultry
Beef
Seafood
Percentage of
consumer expenditure on meat
Projected percentage increase in consumer income

16. Meat demand analysis: Implications for Vietnam
• As income rises:
– Pork and other meat consumption would substantially increase -
 opportunities for livestock production, including smallholder
production.
– Fresh pork remains important, however, consumers tend to
diversify their diet towards other meat such as seafood, poultry,
beef and eggs. -- livestock production must diversify to cater to
more diverse demand.
• Price is still a key factor in meat purchase decision and thus
in meat market competition - reducing costs (and,
subsequently, price) is key for livestock development.
• Increase in price of one meat often reduces its consumption
and consumption of other meat due to income effect. 
Cost reduction would enhance competitiveness and increase
meat consumption.
• Different types of meat are weakly substitutable, given
income effect - livestock production diversification

17. Food safety and risk assessment
studies
Nearly half the consumers (43%) had
concerns about pork.
Most common was fear of disease from pork,
followed by fear of chemical contamination,
un-fresh pork, and bad smell.
Only 1% expressed nutritional concerns.

18. Average ranking of major concerns
about meat safety
HN HCMC All
Diseases of livestock 1.2 1.1 1.2
Hormone used in animals 2.8 3.0 2.9
Antibiotic use 3.0 2.9 3.0
Hygiene in market outlet (including
meat seller)
3.8 2.6 3.2
Hygiene in slaughtering 3.9 2.8 3.4
Concentrate feeding of animals 3.7 4.1 3.8
Other 3.5 3.1 3.2
Animal diseases tops the list of major concerns of
urban consumers about meat safety.

19. Consumer response to pig disease
outbreak
•About half of consumers either stop or reduce pork
consumption; about one-third substitute other meats.
•More consumers in HCMC than in Hanoi shift to
modern outlets for pork.
52%
6%
35%
7%
Hanoi
Stopped/reduced
consumption
Shift to modern
outlets
Substitute other
meats
Other
50%
15%
29%
6%
HCMC
Stopped/reduced
consumption
Shift to modern
outlets
Substitute other
meats
Other

20. Preferred market outlets for fresh pork
0%
20%
40%
60%
80%
100%
Hanoi HCMC Overall
Modern retail outlets Permanent open market
Traditional temporary outlet
Traditional market outlets remain the most
preferred purchase outlets for fresh pork
by Vietnamese consumers.

21. Types of market outlets for fresh
pork in Vietnam
Temporary Neighborhood Market

22. Types of market outlets for fresh
pork in Vietnam
Permanent Open Market

23. Types of market outlets for fresh
pork in Vietnam
Modern Retail Outlets

24. Implications from market studies
 Market outlet choice by consumers of fresh pork in
urban cities in Vietnam is conditioned by factors
related to their level of affluence, time budgets
(female), concerns about food safety and hygiene,
proximity to market outlets, and geographical location.
 Use of modern retail outlets is increasingly observed
among urban consumers who are younger, more
affluent and hence can afford to invest in cooling
facilities for storing fresh food, are more concerned
about food safety and hygiene and opted to live
farther away from city centers.

25. Implications from market studies
 There is still a substantial group of urban consumers
who are dependent on traditional market outlets
ranging from temporary neighborhood outlets to
permanent open markets and who value
accessibility and trust in the supplier that has been
developed over time from repeated transactions.
 These consumers belong to lower income groups
who generally have limited options for food supply,
hence, making it more important that they maintain
access to their preferred outlets.

26. Implications from market studies
 The strong preference of Vietnamese consumers to
purchase fresh pork at non-modern retail outlets
provides a degree of market protection to
smallholder pig producers from imports of pork.
 The relevant policy debate is how to ensure that
traditional market outlets remain viable and up to par
with the competition posed by modern retail outlets,
since these outlets are key to smallholder producers’
inclusion in the restructuring process going on in the
food retail sector, while keeping fresh meat easily
accessible to low income urban consumers.

27. Pig genotypes studies
Context
• Some indigenous pig species have disappeared and some
others are at high risk (research with NIAS collaborators).
• Some of these breeds are still used by many ethnic groups.
• Niche market for some pork meat with desired taste.
Recommendation
• Breed conservation (the role & responsibility of NIAS)
• Exploit & further study the potential of some of these
breeds (collaborative research with NIAS) and explore
potential for niche markets for pork meat with desired
taste
Some of these breeds are useful as maternal sows for small-
scale piglet production.

28. Pig genotypes studies
Context and proposed model for piloting (Mong Cai sow +
western male for piglet production)
• In many rural & remote districts of northern & central
Vietnam, there is insufficient local production of piglets
and fatteners.
• As a consequence, rural pig producers buy piglets being
transported from lowland or coastal areas. Outcome:
disease spread & low fattening productivity.
• “In these systems, more meat from pig production would
be difficult to market” (local stakeholders).
• Pig production can instead be targeted to produce more
piglets. Outcome: same number of fatteners produced /
year but increased number of locally born piglets / year,
decreased number of imported piglets / year, more piglets
sold by local producers.

29. Increasing the proportion of own-produced feed to
total feed use can decrease total feed cost.
This provides cost advantage to small
producers that use higher proportion of own-
produced feed.
0%
20%
40%
60%
80%
100%
Small Medium Large Small Medium Large Small Medium Large
Farrow to Wean Farrow to Finish Grow to Finish
Structure of Feed Cost
by Production System and Scale
Purchased feed Own produced feed

30. Feed-use efficiency (in maize
equivalent)
0
1
2
3
4
5
6
Small
Medium
Large
Overall
Small
Medium
Large
Overall
Small
Medium
Large
overall
Farrow to wean Farrow to finish Grow to finish
Kg maize
equivalent/kg
liveweight gain
Purchased feed Own produced feed

31. Costs, efficiency, competitiveness
• Own-produced feed holds significant share
of pig feed in household pig production,
providing low-cost feeding strategies
• Use of industrial feed associated with scale
of production
• Use of crossbreeds with high % of local
breeds (e.g., Mong Cai) suitable to
smallholder conditions
• Adoption of improved breeds associated
with scale of production, wealth of
producers

32. Costs, efficiency, competitiveness
• Feed conversion ratio (FCR) estimates
using maize equivalent (ME) suggest no
significant differences in feed efficiency
across scale
• There are no significant differences in
cost/unit output across scales
• While not significant, differences in unit
cost is highly sensitive to feed cost (65-
90% of total production cost)
• No clear evidence of economies of scale
found in household pig production in this
study.

33. Implications on production efficiency
 Smallholder pig producers are competitive in producing pork
that meet the demand requirements of Vietnam’s fresh meat
market.
 Household pig producers are able to generate incomes from
pig raising by exploiting areas where they have cost
advantage.
 Expanding options for own-produced feeds, in terms of
choices and quality, can enhance their competitiveness,
particularly in areas that are far from commercial feed
sources, and complemented with improved access to
extension.
 Limitations in available land and household labor will be
constraints to scaling up by household pig producers.

34. Implications from technology
adoption studies
 Pig raising will likely remain tied to agricultural
crop production by households that have
available human and financial resources and
land – an issue for rural development.
 Opportunities for non-farm employment and
other non-farm income sources will likely
compete for household labor available for pig
raising – an issue for scaling up.

35. Implications from technology
adoption studies
 Market access (input and outputs) is an
important stimulus for derived demand for
improved breed and feed (increasing demand
for pork).
 Poor, small producers may not likely benefit
from productivity gains from adoption of
improved technologies – an issue of access
and capacity to adopt.

36. Implications from technology
adoption studies
 Public sector policy has a role to play in
improving access and capacity of the poor.
 Specific types of production systems (e.g.,
local breed piglet production) can provide pro-
poor niche market opportunities. Here, public
sector policy can facilitate access to
supporting services to reduce production and
market risk (e.g. animal health services) and
improving market access.

37. Proposed actions from value chain studies
 Invest in upgrading slaughterhouse and market facilities to
improve hygiene and food safety standards in pork.
 Undertake a comprehensive pork risk assessment to inform
policy, improve consumer safety, and safeguard
participation of smallholders in the pork supply chain.
 Pilot test strategies for collective action and other forms of
organization that will reduce transaction costs of input
procurement and output marketing. Need supporting
policies to foster an enabling environment for their
propagation.
 Set up pilot schemes for testing the viability of a quality
assurance system that is feasible in smallholder context
and its cost-effectiveness in delivering safe pork.

38. CGIAR is a global partnership that unites organizations engaged in research for a food secure future. The CGIAR
Research Program on Livestock and Fish aims to increase the productivity of small-scale livestock and fish systems
in sustainable ways, making meat, milk and fish more available and affordable across the developing world.
CGIAR Research Program on Livestock and Fish
livestockfish.cgiar.org