Media reported last weekend that pork prices had continued downwards for 10 days, falling to as low as less than 10 yuan ($1.54) per kg. The news shocked me somewhat, for pork price hike was not a too distant memory for me. I searched online information about the market and found that the prices had remained high for more than a year.
Pork prices began to rise in May last year and the average price once reached 21 yuan per kg while a certain kind of pork product peaked at 28 yuan. The price stayed at around 20 yuan until August this year when it began to fall.
As an urban consumer of farm produce, I certainly rejoice over the price dive. Meanwhile, however, I am a little worried about pig farmers, especially those individual raisers in the countryside. They began to raise more pigs last year when the short supply triggered the price hike of pork. And it was exactly because of their cutting down on pig-raising in the previous year that led to the short supply last year. Now it is the time for them to reap the returns for their last year's investment but the prices fell.
Price hikes trigger increases in pig-raising; more pigs cause the price to descend, which leads to reduction in pig-raising, which in turn pushes up the prices. The cycles continue endlessly. Economists tell us that this is the market rule.
As a layman about economics, I certainly would not challenge this theory. But I cannot help wondering if it is really justifiable and who are to blame for the losses the individual farmers have suffered.
Pig-raisers are not the sole victims of such drastic price fluctuations. People's Daily reported yesterday that farmers in Guizhou province had a bumper harvest of tomato this year but the wholesale price was only 0.30 yuan ($0.05) per kg. The retail price was 3.60 yuan in Beijing yesterday.
In the recent milk contamination scandal, cow farmers had to dump the milk as dairy companies had dramatically reduced production. The farmers have become the largest casualty in the scandal, second only to the children who had contracted illness from drinking the malamine-adulterated milk.
In the whole production-marketing chain from farming to consumption, farmers always bear the brunt whenever a disaster, whether natural or artificial, occurs during the procedure. They are the most vulnerable to risks but the least powerful when it comes to profit-sharing.
Take the milk production, again, for example. China's dairy industry grew at an annual rate of more than 20 percent in the past 10 years. Sanlu, the company at the core of the recent scandal, kept a 20 percent growth rate in its pure profits in the past eight years. A cow farmer earns about 10,000 yuan a year ($1,540) by raising a cow but the total cost of raising it is 9,000 yuan in addition to the market value of the cow itself, which is about 13,000 yuan.
The gap between the profits is apparent.
As a social group, farmers obviously are the weakest sector in the distribution of interests in society. As individuals, they are the least powerful and have the smallest say in the market.
The situation must change. The most important thing is that they should unite to establish "dairy farmers' association" or "pig-farmers' association" to protect their rights. And there should be more State policies and rules with regard to land, resources and financing to guarantee these rights.
The decisions about rural reform made in the recently concluded Third Plenum of the 17th Central Committee of the Communist Party of China are a timely boon for them.
E-mail: liushinan@chinadaily.com.cn
(China Daily 10/15/2008 page8)
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