Via Financial Times

Halfway up a rugged mountain in Yangxin County in the central Chinese province of Hubei, Shi Jianguo is trying new ways to defeat African swine fever, a disease that has wiped out more than half of his pigs.

Instead of killing and burying or burning sick animals, as the government has said farmers should do, he has been relying on a supersized mosquito coil to fend off the disease, using traditional Chinese medicine to protect his herd and selling the animals to the local slaughterhouse before their symptoms become visible — even though Beijing banned the practice for fear it could exacerbate the spread of the disease.

“In the beginning, the government would subsidise us to cull pigs once the disease breaks out,” said the 32-year-old who has been farming for a decade. “Now the government does nothing and we sell sick pigs to shore up our losses.”

Mr Shi is among tens of thousands of Chinese pig farmers adopting their own practices to deal with a swine fever epidemic that Beijing sees as a threat to economic stability and the reputation of the Communist party.

Pork accounts for more than 60 per cent of meat consumption in China and the outbreak has slashed the country’s pig population by 39 per cent. The epidemic has sent prices surging by more than two-thirds in August from a year earlier, helping to push up China’s consumer price index to a six-year high.

The problems in Yangxin are a microcosm of the challenges facing the country to contain the outbreak.

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Farmers and analysts say government mis-steps have been an important contributor to the crisis, with poor policy threatening to make the disease a chronic issue despite efforts to revive the pig farming industry.

A farmer, who declined to be identified, said her herd had been decimated by swine fever, falling from about 1,000 pigs to just 10 © Sun Yu

Beijing set a rate of up to Rmb1,200 ($168) per pig to subsidise the disposal of infected animals. The central government would pay 40 to 80 per cent of the bill and local officials were required to make up the rest, even though many of them said they did not have enough money to manage the crisis.

Disease-hit pig farms in Hubei, Hunan, Fujian and Jiangxi provinces were either underpaid or did not receive any financial support from government.

Mr Shi said he had not been compensated for the 60 sick pigs that died in June. “The government is turning a blind eye to me.”

Disease prevention is another area where government support is waning, with disinfectants that were once distributed for free now off limits to average farmers.

One reason for the inaction is a slowing Chinese economy, which is growing at its slowest pace in almost 30 years, making it difficult for many local governments to meet their obligations.

In Yangxin, the local government last year earned Rmb1bn in land sales, a big source of fiscal income but less than half the official target. “We are facing unprecedented difficulty and pressure,” the finance bureau said in an announcement on its website.

The funding shortage has also prompted areas such as Yangxin to play down the number of swine fever cases to limit the number of payments it is required to make.

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An official at Yangxin Animal Husbandry Bureau, the office responsible for livestock and veterinary affairs, confirmed the regional government had struggled to pay the subsidies. “There is no way we could pay for so many sick pigs,” he said. “We’ll stay away if your pigs run into trouble.”

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Farmers maintain the cover-up is making the epidemic harder to tackle. “We can’t prevent the disease because we don’t know how many farms have been infected,” said Shi Xiugui, another Yangxin-based pig farmer.

Regional banks are also reluctant to finance what they see as a risky industry even though Beijing has asked them to do so. Five banks in Yangxin told the Financial Times they either curtailed or stopped lending to pig farmers.

Mei Junwen, a director at Yangxin Hanyin Rural Bank, said the company no longer worked with pig farms. “[Swine fever] is here to stay and we have to think about risks,” he said. “We won’t lend to pig farms until the disease goes away for good.”

Many farmers are choosing to keep their herd sizes small and, in some cases, quitting the business altogether despite incentives from Beijing, including subsidies and low-interest bank loans to increase the country’s pig population.

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“We don’t dare to increase our hog herd,” said Huang Caiyi, a farmer in the eastern city of Zhangzhou. “We are not sure how many pigs will survive.”

Farmers complain that an added problem is the government’s focus on large operations leaving smaller farmers, which represent the bulk of the sector, without enough support. In Hubei, pig farms must have at least 500 breeding sows to qualify for subsidies, reducing the number of eligible farms to nine out of more than 2,000 in Yangxin.

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While the policy helps promote industry consolidation, it does little to stem the spread of swine fever.

In the absence of government help, Mr Shi intends to rely on his own methods despite scant evidence that they even work. “This is the most I can do,” he said. “I will then leave it to luck to keep my farm safe.”