Nguyen Quoc Toan, director of Thanh Dat Livestock Cooperative, had been breeding pigs for the last 20 years until the day he decided to suspend farming because of big losses.

His farm was large with 5,000 pigs. However, he just has dozens of sows now. The farm has been idle since January.

The cooperative, with nine members, once raised up to 10,000 pigs. However, farming has been interrupted since last year. Animal feed prices have been skyrocketing, while pig prices have been fluctuating heavily, causing big losses. Some members have given up farming for six months.

“As we have incurred big losses, we don’t want to continue breeding. And the epidemics in recent years are also a threat,” he said.

Two days ago, seeing the pork prices move up slightly, he bought 1,000 breeders and resumed farming. The brood of pigs will only be sold after five months and he is not sure if he can make a profit. Therefore, he dare not expand farming.

According to the Ministry of Agriculture and Rural Development (MARD), Vietnam has the largest herd of poultry in the world. 

In 2018-2022, the number of poultry soared from 435.9 million to 557.3 million heads. Most of them are chicken raised for meat, which account for 81 percent of total poultry.

In the first quarter 2023, there were 551.4 million poultry heads, up 2.4 percent, and poultry meat output was 563,200 tons, up 4.2 percent. There were 4.7 billion eggs, up 4.5 percent compared with the same period in 2022.

Regarding pig farming, as of the end of March 2023, Vietnam had 24.66 million pig heads, up 6.2 percent, the live pork output had reached 1,192 thousands tons, up 7.5 percent. Vietnam is also among the top countries in Asia in the number of pigs.

However, farmers are leaving farms idle because they don’t have money left to resume production. Small farming households said they have become exhausted.

Analysts point out that domestic farming enterprises are inferior to foreign invested ones, and small farmers are excluded out of the market. 

A report showed that in 2022, domestic enterprises just held 10 percent of the white-feather chicken farming market, while the remaining 90 percent was controlled by foreign invested enterprises (FIEs). 

As for color-feather chicken farming, FIEs held 55 percent of market share, and domestic enterprises 45 percent in 2022, while the figures were 40 percent and 60 percent, respectively, in 2021.

A report about Vietnam’s 2023 pig farming by Vietcombank Securities which cited statistics about pork supply showed that domestic enterprises account for 19 percent, farming households 38 percent and FIEs 43 percent.

Nguyen Tri Cong, chair of Dong Nai Livestock Association, said, for a long time, FIEs only had 30 percent of the total herd of pigs, while the other 70 percent was held by private households and Vietnamese enterprises. At that time, it was households which determined the prices.

But things are different now. “Ten years ago, we had 10 million farming households. Three years ago, we had 4 million households and now we have less than 2 million,” he said. “This means that 8 million households have left the market."

The market is in the hand of foreign players

As supply exceeds demand and production cost increases, both private farmers and enterprises, foreign and Vietnamese, are incurring big losses. 

However, Cong believes that FIEs which farm in chains and have good financial health will be able to recover quickly, while small private farmers cannot sustain the situation for too long and will have to ‘quit the game’.

Household farming needs to be encouraged as it creates jobs for workers who are too old to work at factories, and creates jobs during leisure time after harvest. However, household farming is shrinking. Many farmers have stopped farming, and others have shifted to other business, while some raise poultry for FIEs.

“Households have to meet very strict requirements set by FIEs to do outsourcing for FIEs. Most small farms of private households cannot meet the standards,” he said.

He went on to warn that once FIEs hold a large market share, they will determine the market prices.

The manager of a domestic livestock company with 300,000 pigs said the presence of FIEs in Vietnam helps Vietnamese enterprises improve their management and organize production on a large scale. Instead of hundreds of pigs, Vietnam now has farms with thousands and tens of thousands of pigs.

FIEs rent farms and hire workers to raise livestock for them, and most products are consumed in the domestic market instead of export. Outsourcing to Vietnamese farmers allows them to save money and expand their farming scale. 

Tam An