War over pork - who is profiteering?

Who is profiteering? That is the burning question in the annual war between pig farmers and pork sellers in the nation.

The two groups had yet again engaged in hot debate on who is unscrupulously raking in the profits from the hike in the meat's price.

The dispute not only prompted government agencies but also the MCA to interfere.

The demand before and during Chinese New Year is always high as pork is an indispensable food item for the Chinese during the festive season, boosting the price.

The issue flared up when the National Pork Sellers Association led by Lim Choon Chiang slammed the pig farmers for inflating the ex-farm price by fixing it at RM7.60 per kg at present with the possibility that it may spiral up during the Chinese New Year period.

He alleged that a few pig farms had monopolised the business which had cut down on production to create an artificial supply shortage aimed at reaping higher profits.

"If we did not accept the price they fix, we would not be supplied with pork."

So the association urged the government to step in before the problem worsened during the festive period.

Production costs bear blame

Lim warned that the supply of the meat might run out next month if no action is taken.

However, the pig farmers, backed by the Veterinary department under the Agriculture Ministry, claimed that the RM7.60 is a reasonable price.

The department's explanation is that the price hike is the result of surging production costs not supply shortage and put the blame on the butchers for profiteering by pushing the retail price too high, taking in profits of around RM500 for every 100kg of pork sold.

The pig farmers association then countered by publishing a price table, claiming that the pork sellers bag RM515 for every 100kg pork sold.

They also claimed the cost of raising a pig is RM641.90 with a thin profit of RM108.

On Thursday, after a dialogue with MCA deputy president Chua Soi Lek at party headquarters, Lim dismissed the price table as "misleading".

Vigorous finger pointing exercise

"If we could earn about RM100 for every 100kg pork sold, we won't be here to pick a fight."

He said that the high price had lowered the market demand hence causing a hard time for the butchers.

However, Lim welcomed the directive by the Ministry of Domestic Trade, Cooperatives and Consumerism to include pork as a controlled item and the Veterinary Department's decision to allow imported pork into the local market during Chinese New Year.

He hoped the imported pork would heighten local competition, forcing pig farmers to bring down the ex-farm price.

But this had drawn flak from the farmers who worry that the flood of cheaper imported frozen pork would impact destructively on their business.

The on-going spat between the two industry players prompted the MCA to initiate a dialogue with both groups in the hope that a round table meeting between both sides would follow, resulting in a consensus among the concerned parties

Chua (right) said the solutions introduced by the authority would not solve the problem in the long term as government servants, mainly Muslims for whom pork is forbidden, do not understand the industry.

He suggested that government address the problem by adopting the same mechanism used in solving the chicken price dispute earlier, striking consensus between farmers and retailers over price control.

No further meetings had been held between both parties since three years ago.

Price control should be for both parties

"The government should not only control the retail price. They need to control the ex-farm price as well," he stressed at the press conference held after the dialogue with the pork sellers.

Chua also gave his backing to the pork import move as this would give consumer more choices.

He said the MCA would hold dialogue with the pig farmers to understand their side of the story before recommending any solution.

Aside from the price debate, some quarters in the industry view the root of the problems from a bigger perspective - the government pig industry policy.

It is a fact that after the Nipah virus outbreak in 1998, the government has been restraining the pig industry's development.

Before the outbreak, the nation had around 3,000 pig farms and a daily supply of about 11,000 pigs to butchers but the figure now stands at 400 pig farms, with the daily supply being less than 6,000 animals.

Hurdles in getting land titles for such farms and lack of financial assistance from the state had slowed the industry's pace in modernising its technology, which can minimise costs while maximising production.

Perhaps struggling for a better government policy could be the point to unite the warring parties.