EconomyEditor's PickASF crisis, an opportunity to modernize our pig industry

May 9, 2021

Agriculture Secretary William Dar inherited the ASF crisis, coming into office just as the country officially declared our African Swine Fever (ASF) outbreak in August 2019. Nearly two years from his appointment, the ASF crisis is still felt. It was only last week that our leaders reportedly struck a compromise on what to do with pork tariffs and imports. I am not going into that issue. Though important in light of the current shortage, having more imports is a temporary measure. However, licking the ASF virus and modernizing our pig industry are the real solution, and helping the industry attain that is the most important assistance to producers.

Secretary Dar faces a tough problem as there is as yet no ASF vaccine that his administration can roll out effectively and quickly. The development of a vaccine may still take some time.

In the meantime, the country continues to bear the problems of a pork shortage and the current inability of the industry to recover lost inventory due to the ASF disease. The Department of Agriculture’s (DA) estimate of the shortage is 388,000 metric tons (MT). Biosecurity measures appear as weak as the coordination between national and local government units (LGUs), good reason to believe the ASF virus may still be spreading in our country.

What’s being done or planned to be done to help pig producers?

Late last year the DA launched INSPIRE or the Integrated National Swine Production Initiatives for Recover and Expansion. This swine recovery program aims to restore quality and genetically superior breeder stocks and finishers; modernize the production environment in ASF-free zones; and implement strict biosecurity measures. Ultimately the program aims to help producers recover lost incomes and make available pork supply at affordable prices to consumers.

Over three years, the recovery program targets to produce 738,805 MT of pig meat, valued at P157 billion. To attain this goal, 115,800 pig farmers have to raise 10.5 million finishers. This requires 62 breeder farms to produce 440,563 breeders, surpassing by 42% the country’s breeder base that the industry lost to ASF. In turn, 33,500 grandparent breeder stocks would be needed. The private sector is expected to add 20 breeder farms, contributing nearly half of the breeder stock to be recovered.

The repopulation program is “calibrated,” involving only ASF-affected areas released from quarantine. These so-called “pink” areas had gone through the program’s sentinel protocol successfully. The protocol requires a rest period from production for a period of 50 days — 30 days of which are spent on cleaning and disinfecting the farm, and 20 days for bioassay to check if the area is ASF-free — after which sentinel pigs are raised on the farm for 40 days. If none of these pigs die from ASF during this period, the area is released from quarantine, and the repopulation program is started, with beneficiary farms getting access to ASF-free sows and finishers and related repopulation benefits.

The LGUs and the DA implement sentinel protocols, with the LGU having the authority to release an area from quarantine. Reportedly, seven barangays in the City of Lipa and two others in the town of Malvar, Batangas were recently declared “pink” areas. Sentinel protocols are currently implemented in other places in Batangas, Quezon, and Rizal. These towns — namely Montalban in Rizal, San Juan and Laurel in Batangas, and Mulanay in Quezon — are reported to be conducting bioassays.

The distribution of pigs to beneficiaries is conditional on the receiving areas having been declared ASF-free. Intended beneficiaries throughout the country should be informed that the repopulation program could not be started if their LGUs had not yet released the areas where their farms are from quarantine. This requirement makes good sense except that when it is not properly communicated to beneficiaries, failure to distribute re-population benefits could be grounds for criticizing the program.

Let us define accountabilities. Assistance starts with implementing the sentinel protocol. If “red” or ASF-affected areas are not going through the sentinel protocol, then this may be taken to be a delay in the delivery of the assistance. According to the program, there are about 2,333 barangays which were hit by ASF. We are now in the middle of the first of the three years of the program, and the DA is only talking about few scores of barangays going through the sentinel protocol.

In fairness, this program is not fully funded yet. Maybe the DA should now be asking Congress for the P27 billion it needs to implement its share in the cost of the repopulation program. This may start to be fully funded in 2022, that would only mean DA has to extend the program to 2024.

A performance measure of INSPIRE is the number of “red” areas which are undergoing sentinel protocols. A related measure is how long did a “red” area wait before starting the protocol. It is possible that areas may fail in the program, and thus the re-herding program could not be started. This should not be taken against the program since re-population benefits are conditional on the receiving areas passing the sentinel protocol.

A second performance measure is how many of the areas released from quarantine are receiving the benefits of the program, and has the related measure on the delay of receiving the benefits.

Program implementation can be slower than it should be if those in charge of the program do not have full control of resources, are weak in planning, and are overly cautious not to make a mistake for fear of being brought to the Ombudsman. But here’s another important potential obstacle.

The INSPIRE program cannot fly without the cooperation of LGUs and industry. How many LGU officials are ready to take on the responsibility of implementing the sentinel protocol in their respective localities? Sentinel protocols can be delayed in localities where LGU officials are not adequately informed by the DA about the program, or are not ready yet to implement it. The responsibility is not just on the sentinel protocol but, more importantly, on enforcing biosecurity measures to protect the “pink” areas from the ASF-virus. This may take distributing mobile testing kits to pig farms undergoing the repopulation program, and truck disinfection facilities positioned at entry points to a province or island.

LGUs should consider that lack of resources cannot be an effective alibi for inefficiency because of the added resources they have due to the Mandanas ruling.

The DA must produce and update a map of ASF-affected areas. The map should be effectively communicated to beneficiaries, who should know if they are entitled to receive the assistance under the repopulation program. The map may indicate if LGUs and the DA had already agreed to implement the program in ASF-areas. This is to clearly assign the responsibility of any delay of program implementation between the DA and the LGU.

The DA has a monitoring unit for its programs. Perhaps this can be mobilized to gather real time information on program implementation.

For this very important program, perhaps a third-party evaluation of the program be done in the middle of it to summarize all the information about the program’s implementation, and compare that with the reports of the DA.

The agreement to implement the program should include representatives from the industry. Our pig industry is privately run, and for this program to succeed industry representatives must be involved, especially the commercial farms. These farms have the potential of accelerating the recovery of our pig inventories. Unlike backyard farms, commercial farms are easier to secure. The program’s inputs can be quickly translated by these farms into outputs and outcomes.

Program implementation is handled by this tripartite body including the LGU, industry representative, and the DA. As soon as sentinel protocols and re-population programs are started, this tripartite body should regularly meet to monitor the program and address any issues that may arise during the implementation.

MODERNIZATION OF THE INDUSTRY
A big challenge of the program is transforming the backyard sector of the industry. This sector comprises 60% of the industry. Experts have advised that traditional backyard farming is extremely vulnerable to highly contagious animal diseases. It is open and difficult to secure, especially if raising pigs is incidental work to generate extra cash for a household. The repopulation program in commercial farms could be vulnerable to highly contagious animal diseases like ASF with open backyard farms in operation, particularly in the same province and if biosecurity measures are not strictly enforced.

To address the problem, the INSPIRE program suggests the clustering of 50 to 60 backyard farms, to be operated and managed as a cooperative, association, or some other business entity. Clustered farms are easier to bio-secure. The DA will provide the repopulation benefits including bio-secured modern housing facilities and other support services.

The clustered pig farms are encouraged to centrally procure stocks, feeds, drugs, and other inputs; access credit facilities; raise pigs as one farm to ensure uniform application of technology; engage the services of slaughterhouses, logistics service providers; and market their products. If feasible, they may partly integrate operations. The LGUs are required to provide veterinary services and other administrative support to maintain area-wide biosecurity control measures to ensure the success of the program.

This is such an important modernization step for our pig industry. But are backyard farmers ready for this? There may be areas that are, such as I heard Lipa City is, but others may not be open to changing how they raise pigs, especially if they have to be in business with other farmers.

Perhaps, the LGUs can help facilitate this transformation by providing tax incentives and other benefits. A cluster of backyard farms can be declared by LGUs to be an agri-economic zone, receiving benefits from LGUs for a given period of time. With the Mandanas ruling, LGUs may be more able to finance these incentives for the economic development of their localities.

One important benefit that clusters of pig farms can receive from LGUs is the disposal of pig waste. Commercial farm operators had identified this to be costly and the cluster of backyard farms may not be able to afford this. But environmental rules require the proper disposal of pig waste. LGUs may offer benefits for the proper disposal of pig waste from farm clusters declared as local economic zones. LGUs can aggregate pig waste in their localities and operate a biomass energy plant, or contract out such a plant in their locality.

Let a study be done to identify how business clusters of former backyard farms ought to be formed; what incentives should they receive from local and national government agencies; how long should they receive such additional incentives; what does this mean for the individual backyard farmer; what safeguards are needed to protect the interests of all farmers concerned; do we need a special law for this?

The LGUs and DA have to undertake an information program to make backyard farmers know of the advantage they may have if they clustered their farms. There may also be a need for training the members of a cluster on how to do a pig business as one farm. It may also be possible for the cluster to hire third party professional managers to operate the farm.

Commercial farms as well in the first few years of the repopulation program should be made eligible for tax incentives under the new CREATE law. These farms may introduce modernization innovations in pig farming intended not only to bio-secure their farms but also to increase productivity.

 

Ramon L. Clarete is a professor at the University of the Philippines School of Economics.

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