More On Pork
In our recent post, Pork Prices and Inflation, MTD noted that pork is one of the staples in the Chinese diet, that a recent bout of pig disease has caused pork prices to rise to all time levels, and that increases in the price of pork are one of the reasons for the recent surge of inflation in China. Since the post, there have been two developments in the pork story — one regarding China’s continuing efforts to curb the rise in pork prices and rein in inflation, the other regarding a frequent problem in China, food contamination.
In order to dampen the rise in pork prices, China announced in July a series of measures, including subsidies to boost pig supply.
The State Council said that it would invest 2.5 billion yuan ($390 million) in large pig farms this year. Also, all farmers and pig farms will receive a subsidy of 100 yuan for every sow they raise.
“Encouraging large-scale pig raising is helpful to control supply and stabilize the price, which is better than small-scale farming,” Gao Guan, deputy secretary general of the China Meat Association, said. Large-scale farms of more than 50 pigs accounted for 61 percent of the country’s total pig raising in 2010, while 39 percent was from small-scale raising by individual farmers, according to the Ministry of Agriculture.
President Hu Jintao has said that stabilizing prices remains policy makers’ top priority in the second half of the year. The central bank has raised interest rates three times and increased the reserve requirement for lenders six times in 2011 to rein in inflation.
The macro and micro economic measures taken by China appear to be taking hold. Pork prices in China fell last week for the first time in three months. The price of pork dropped 0.2 percent in the week ended July 24 from the previous week as supplies increased and demand slowed, China’s Ministry of Commerce said on its website. That was the first decline since the week ending April 8, according to data compiled by Bloomberg.
On the health front, five people were convicted on Monday, July 25, for illegally dealing in and producing clenbuterol, a poisonous chemical known in China as “lean meat powder.” Liu Xiang, a clenbuterol producer in Hubei Province, was sentenced to death with a two-year reprieve, and four other people, including Liu’s wife, were convicted of “endangering public security by using dangerous means” and issued sentences of from nine years to life imprisonment. The verdict said that the five suspects produced and sold clenbuterol even though they knew it is harmful.
Clenbuterol is used by sufferers of breathing disorders as a decongestant. People with chronic breathing disorders such as asthma use it to make breathing easier. It is also used by bodybuilders and athletes who call it simply “Clen” and use it as a performance enhancing and weight loss drug. When consumed by humans, the banned “lean meat powder” can cause nausea, dizziness and heart palpitations.
In March, the state media reported that Shuanghua Group — China’s largest meat processor — was producing and selling clenbuterol-tainted pork by feeding the chemical to pigs in order to eliminate fat and produce muscle. The meat is then sold as a premium product in the marketplace.
Though there have been no incidents of sickness or death reported form this latest round of food contamination, at least 70 people became ill after consuming tainted pork in China in February 2009.