Presented by Lucy Lapar at the inception workshop for the 'Reducing Disease Risks and Improving Food Safety in Smallholder Pig Value Chains in Vietnam' project, Hanoi, August 14, 2012.

1. Reducing disease risks and improving food safety
in smallholder pig value chains in Vietnam:
What have we learned from previous work?
Ma. Lucila A. Lapar
On behalf of the Project Team
Project Inception Workshop
Hanoi, Vietnam
14 August 2012

2. Demand for pork in Vietnam

3. Meat expenditures
Pork accounts for 40% of meat expenditures by
Vietnamese household consumers.

4. Preference rating for pork
Vietnamese consumers have a strong
preference for fresh, unchilled pork; this
provides natural protection from imported
pork.

5. Changing nature of demand for
pork
The majority of Vietnamese consumers indicated
preference for lean pork compared to other types of pork.
No significant change in lean meat consumption from 10
years ago, but significant reduction in consumption of high
fat meat from 10 years ago.

6. Preferred market outlets for fresh
pork
Traditional market outlets remain the most
preferred purchase outlets for fresh pork
by Vietnamese consumers.

7. Supply of pork in Vietnam

8. Dominance of pork in livestock total
output
Year Pig Chicken Cattle Others Total
1990 65 11 14 10 100
2000 68 14 9 9 100
2005 72 12 8 8 100
2009 62 13 11 14 100
Source of data: FAOSTAT 2009.
Household pig production supply at least
80% of Vietnam’s pork.
But growth in supply has failed to keep
pace with rising demand, resulting in
accelerated increase in real pork prices.

9. Supply of pork in Vietnam
Most Vietnamese pigholding households keep very few pigs but
on average the size of their herds is slowly rising. Although not
shown, the percentage of pigholding households with 21 pigs or
more rose from 0.3% in 2001 to 1.75% in 2006.

10. Projected share of pork supply from
large-scale producers
14%
Base simulation
12%
High income growth
10%
High tech growth in modern
sector
8%
No tech growth in traditional
6% No tech growth in maize
m
High income elasticity of
o
u
p
n
d
e
a
g
4%
c
-s
s
r
t
i
l
modern
High income elast and tech
2% growth in modern
Worst case for traditional
0% sector
o
h
e
a
g
S
r
f
l
0 1 2 3 4 5 6 7 8 9 10
Year

11. Competitiveness
of smallholders

12. Scale definition in household pig
production
Small-scale Medium-scale Large-scale
Farrow-to-wean 1 sow 2-3 sows 4 sows or above
Farrow-to-finish 1 sow 2-3 sows 4 sows or above
Grow-to-finish Less than 15 heads From 16 to 40 heads More than 40 heads
Production system definition:
Farrow to wean – piglet production
Farrow to finish – full cycle slaughter hog production
Grow to finish – pig fattening operation

13. Rates of return
Household-based pig producers earn revenues
that can cover costs and generate some
positive profits.

14. Gross margin (‘000 VND per kg
output)
Household-based pig production can
generate gross margins ranging from 4,000
to 15,000 VND/kg liveweight of pig produced.

15. Cost per unit output in household-based
pig production
Economies of scale in piglet production; no
significant difference across scale full cycle
slaughter hog production and pig fattening

16. Feed-use efficiency (in maize
equivalent)

17. 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.

18. Cost-efficiency and economies of
scale
 Own produced feed is cheaper per unit of feed value.
 As farm size increases:
 Proportion of purchased feed increases
 Effective unit cost of feed increases
 Feed costs account for at least two-thirds of total costs.
 Small producers can exploit this cost advantage to
improve their competitiveness.

19. Contributions to household
income and employment

20. Share of pig income in total
household income
Income from pigs accounts for about 14%
of rural household income, or 24% of rural
household income from agriculture.

21. Value added along the pork supply
chain where household producers
participate
Value added generated in pork value chains
where household pig producers participate is
about 11,700 VND per kg liveweight (or $0.62)

22. Share of retail price that accrues to
producers (based on average pork
retail price of 40,000VND/kg in
2007)
Farrow to finish Grow to finish
63% 61% 65% 65%
56% 60%
Small Medium Large
Producers receive at least half to two-
thirds of the retail price of pork. This
share increases with scale.

23. 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.

24. Emerging concerns of food safety
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.

25. 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
3.8 2.6 3.2
meat seller)
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.

26. 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.

27. Proportion of pork samples that did not
meet standards for different hazards
•High level of microbial contamination in pork sold
in Hanoi and Ha Tay.
•Fecal contamination is greatest contributor to
bacterial load, likely to be at slaughter point.
•Pork sold in supermarkets contains significantly
higher hazards than pork sold in wet markets.

28. Hazards vs. Risk
Although hazards were high, pork consumers
report low levels of gastro-intestinal disease
(1 episode/person/year).
There is no association between amount of
pork consumed and incidence of gastro-
intestinal disease (p=0.60).
There is strong positive association between
consuming vegetables and reporting illness
(p=o.006).

29. 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.

30. Implications on economies of scale
 Within smallholder piglet production, marginal
increases in scale can reduce cost and increase
profitability (e.g., from 1 sow to 2-3 sows).
 Due to lack of economies of scale in household pig
production (except in piglet production), continued
support to household pig production will likely improve
overall efficiency of the industry.
 It is not clear that policy support and investment in
large scale operations will reduce unit cost of pork
production or increase employment.

31. Implications on food safety
 Growing awareness among consumers about food
safety will shape emerging demand for pork and
supply response.
 Food safety policy should be based on evidence;
currently risk to human health by pork is not fully
understood.
 Food safety policy should be based on risk rather than
hazards; risks must be distinguished from hazards.
 Risk is multi-source, and various transmission
pathways for diseases including waste water and
urban/peri-urban agriculture need to be considered.

32. The New Project: Research Questions
 What are the human health risks and economic costs
of pork-borne diseases in smallholder pig value chains
in Vietnam? What are the critical control points /
opportunities for risk management?
 What is the added utility of risk-based approaches to
food safety and pork-borne disease (that focus on
human health impacts) compared with current hazard-
based approaches (based on presence of pathogens
in pork)?
 What is the most appropriate role for incentive-based
innovations in improving management of human and
animal health risks in these smallholder pig value

33. Goal of the Pig Risk Project
 To improve the livelihoods of rural and
urban poor in Vietnam through
improved opportunities and incomes
from pig value chains as a result of
reduced risks associated with pork-
borne diseases.

34. Objectives of the Pig Risk Project
 To assess impacts of pork-borne diseases on human
health and the livestock sector and identifying critical
control points/opportunities for risk management.
 To develop and test incentive-based innovations to
improve management of human and animal health
risks in smallholder pig value chains.
 To sustainably improve capacity to assess and
manage risks to smallholder pig value chains by
engaging smallholders and co-generating evidence.

35. International Livestock Research Institute
Better lives through livestock
Animal agriculture to reduce poverty, hunger and
environmental degradation in developing countries
Project website: www.vietpigs.com.vn
ILRI
www.ilri.org