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Bringing home the bacon: Digitalization helps Chinese pig farmers scale up

Zhenba County, nestled in the mountains of China’s Shaanxi province, has long been known for its traditional bacon, expertly smoked and cured to produce an unmatched flavor.

Under normal circumstances, the hog farmers of Zhenba County would have an entire nation of connoisseurs to sell to. For centuries, pork has been the most widely consumed meat in China. The average Chinese person eats about 30 kg of pork per year, and the country is estimated to have consumed a total of 40.3 million metric tonnes of pork in 2020.

But in recent years, shocks such as the African swine fever outbreak and the COVID-19 pandemic have only made it more difficult, reducing herd sizes and sending pork prices soaring. Even with the enormous resources that come with being the world’s largest producer of pork, China’s pig farmers have been struggling to keep up.

In light of these developments, the Chinese government has set up a series of policies to support the expansion of the domestic livestock industry, with the goal of achieving 95 per cent self-sufficiency in pork production. Initiatives like these should represent a huge business opportunity for the nation’s pig farmers – but unfortunately, they often remain out of reach for all but the largest commercial enterprises.

Zhenba County’s farmers are among the 99 per cent of Chinese hog farmers who own 500 pigs or fewer. For small- and mid-scale farms such as these, scaling up to the degree required by these government initiatives is incredibly difficult. They are also less likely to use the standardized methods employed by industrial farms, which can result in too much variability in product quality, forcing these farmers to accept a market price less than their products’ true value. They also typically lack the resources needed for efforts like branding and marketing, which restricts their ability to sell high-value pork products like bacon to wider audiences.

A member of one of Zhenba County’s farming cooperatives walks with his pigs.

Scaling up with a digital tracking system

To compete with the big industrial operations, the farmers of Zhenba County needed a solution that would help them consistently meet quality standards, even as they expanded their scale, and would ideally help them open up new markets for their products too. An IFAD-funded project active in south Shaanxi province came up with an idea. In 2019, the project partnered with the local Market Regulation Authority to invest in a digitalized tracking system.

The new Zhenba Bacon Quality and Safety Traceability System tracks each package of Zhenba bacon from the farm to the supermarket shelf. It begins with an animal identification system that keeps track of each pig on participating farms. This tracking is maintained throughout the pork production process, and the food standards incorporated into the system ensure that quality stays consistent. Each finished package of Zhenba bacon is then assigned a digital “ID card” that end consumers can use to trace it back through the process all the way to its source.

In addition to the technologies the tracking system depends on, such as software platforms and the Agricultural Internet of Things (i.e., tools and equipment that are capable of monitoring and exchanging data), the initial investment also provided funding for training and capacity-building at all stages of the value chain, improved access to markets and resources for product marketing, and support for research and development activities. The benefits were immediately apparent.

In the tracking system’s first year of operation, participating businesses and cooperatives were able to diversify their products and regulate their product quality, attracting more suppliers and consumers. Notably, the quality standards introduced by the project have been adopted by various actors along the value chain, from small-scale pig farmers and livestock cooperatives to leading enterprises. All of the steps in the bacon production process – including pig breeding, raw material procurement, production and processing, packaging and labeling, and sales – now use the tracking system, helping all actors adhere to a common set of standards and making Zhenba’s entire bacon industry more sustainable and reliable. 

The importance of small-scale farmers in the digital value chain

Of course, the most important stakeholders in the new tracking system are the small-scale farmers. Liu Xuefei is one of them.

Mr. Liu had grown up in Zhenba, but some time ago, he had moved away to Beijing for work. Browsing in his neighborhood grocery store one day, he encountered a package of Zhenba bacon for the first time – and it inspired him to move back home and start up a business of his own. Today, he’s the leader of the Smart Sister Livestock Cooperative. After struggling to access the markets at first, he’s recently signed a long-term acquisition agreement with a leading food technology company.

Thanks to his participation in the new bacon tracking system, Mr. Liu has also received financial support to expand his pig breeding operations, along with training that’s helped him develop his own digital tracing system for his free-range pig farm.

It’s not just Mr. Liu who has benefited from the initiative, either. As of June 2020, Zhenba County had 18 bacon production and business units (including 5 certified production enterprises, 10 small-scale producers, and 3 individual bacon business owners), producing about 500 metric tonnes of bacon per year, for a value of 50 million yuan (about US$7.75 million). It is estimated that by 2021, Zhenba County will be able to develop more than 25 cooperatives, which are expected to attract 1,500 rural households who will collectively own 20,000 pigs and produce 2,000 tonnes of bacon at an output value of 200 million yuan (about US$31 million).

The way forward: Bringing Chinese bacon to wider audiences

Now that Zhenba County’s bacon industry is stabilizing and developing, local authorities are looking to other opportunities.

“We are planning to develop eco-tourism routes into the town,” says Ms. Sun Jie, vice-mayor of Zhenba County. “We want to attract tourists to visit our mountains and farms, enjoy our local culture and music, and of course eat the bacon.”

There are also plans to introduce Zhenba bacon into European markets. Recently, it was included as one of the Geographical Indications selected for trademark protection in the bilateral agreement signed by China and the European Commission. Soon, customers all across the European Union will be able to have a bite of traditional Chinese bacon – without travelling to China.

Learn more about IFAD’s work in China.