Chinese pork subsidies a possibility with new regs

The Chinese government is getting deeper into the nation's hog industry in an effort to stabilize prices on a meat that has become less of a luxury and more of an expected part of the country's diet.

New regulations - and potential actions the government could take, including subsidies - are based on grain-to-hot price ratios, according to an outline from AgFeed, a U.S.-based company that supplies feeds to Chinese hog producers. Other factors that would be taken into account include the number of slaughtered sows and monthly sow inventories.

Depending on the severity of any decreases in hog prices, the Chinese government would take one or more of these steps, according to an AgFeed press release:

• Publish hog price decline warnings.
• Purchase market hogs for its strategic reserve.
• Grant subsidies to farms.
• O, adjust pork imports and exports.

"In the event of a sever drop in hog prices, hog farms in the largest hog producing areas will receive a subsidy of $15 for each gestation sow and nationally designated hog breeding farms will receive a subsidy of $15 for each breeding boar," according to the release.

"Large pork consuming areas are encouraged to sign long-term supply agreements with large hog producing areas and to set up hog production plants in large hog producing areas," the release added. "In addition, hog farms are encouraged to negotiate long-term sales contracts with slaughter houses and wholesale markets to maintain hog price stability. In addition, the government plans to strengthen pork quality inspection to ensure feed safety and to address unreasonable government taxes and fees to hog raising, transportation, slaughtering and hog sales."