Costs Rise for All to Green Pig Farms in Malaysia

Editorial note: This article is the second of Macaranga's two-part series on pig farms in Malaysia, with an eye toward One Health. The first story can be found here.

There are many ways an interview about pigs can begin. Wong Soon Ping of Kampung Selamat, Penang showed off a whole roast duck on a baking tray. Half of it was coated in truffle powder. “I’m trying a new recipe!”

It turns out roast ducks are a new product for Soon Ping, a third-generation pig farmer who had sold his pig farm in November 2021 and now processes and distributes pork. His village is one of the two pig farming areas in the state, notorious for decades-long river pollution.

The state is now mandating its farms modernize or shut down. This should be good news for river health, and impacted communities and livelihoods. However, the move is also pushing small pig farms out of business and disrupting pork supply.

Long term impacts of pig farm pollution

Limits the use of rivers as a source of water and retards recreational and tourism activities Water quality degrades Affects the river ecosystem and can threaten river life extinction Visual and odour pollution Can cause water-borne diseases like diarrhea, skin diseases, etc When pig related wastewater is released into rivers such as Sungai Kereh, Penang that are sources for other agricultural activities like paddy, it can raise racial and religious sensitivities about the impact on the produce – Department of Environment (Photo: Lee Kwai Han)

“Modern pig farming systems” are costly to implement – RM15,000-RM30,000 (US$3,300-6,570) per sow (see below) – and farmers are already struggling to make profits, says village head Soon Ping.

Coming off the back of bottom-line hits from Covid-19 lockdowns, farmers are facing climate crisis and war-induced skyrocketing prices of feed as well as a fluctuating Malaysian Ringgit. About 90% of feed is imported.

“Pig farming profits started to drop in the last 5-7 years,” he says, pointing to fluctuating feed costs and exchange rates. “The profit is also very volatile. It could drop from one year to another by 100% or more.”

The industry has seen no investors or new farmers, and Thailand’s largest conglomerate who invested in pig farms in Perak a decade ago has not expanded.

And then there is the threat of African Swine Fever (ASF), the catalyst for Soon Ping’s farm sale. A savvy businessman who tracks global pig farming trends, he observed how ASF wiped out pigs in Sabah in 2020, ground zero for the disease in Malaysia at the time.

Getting hit by ASF now would bankrupt him as the only solution is mass culling.

Mere weeks after selling his farm, ASF was detected in Peninsular Malaysia, though Penang is still free of it. And now, farms must undergo mandatory modernization.

RM1 million bill to modernise SETTING up a closed-house building for pigs carries a price tag of about RM1 million per building, says pig farmer Ng Yan Hoong. “Normally, one house will house one type of pig [at different stages of the production chain]. I would say you need 4—6 houses before the farm can be functional.” That comes up to RM15,000 per sow. Wong Soon Ping estimates that the cost per sow could be as high as RM30,000, depending on equipment. Converting an existing farm would cost less, but Ng recommends building from scratch to get it right.

What’s more, the government is not supporting the industry, says Soon Ping.

“There are no incentives and assistance from the government. It is difficult for pig farmers to continue their operations and to adapt to change, like transitioning to closed house systems."

“Some farms will get eliminated in the changing trend. Those who are not willing or not capable to change will give up pig farming.”

Too tough to modernize

“Lau” (not his real name because he is operating illegally) is one farmer who cannot afford to convert to the new closed house system. He already has building plans approved but no physical structure. He cannot get a license.

So, he paid a RM1,000 (US$219) fine, his first offence in 8 years of running his business. He will continue to operate without a license.

With no sign of operational costs abating, he says gloomily that he will probably need to pay ever higher fines until he is shut down. “Converting takes too long to complete."

Several farms in Kampung Selamat have shut down, says Soon Ping. The same thing is happening in the other pig farming area of Kampung Valdor, in the south of Seberang Prai.

Since the enactment was enforced, 18 out of 167 farms in Penang have closed, says Wong Fu Sheng, chairman of the Penang Pig Farmers’ Association. He expects that number to drop to 140 next year, adding ominously, “there will be more closing”.

Will Malaysians need to worry about pork supply? “Why do you think the price of pork is going up?” he asks cynically, though admitting that it is escalating feed prices that is also causing farmers to decrease pork production.

Self-sufficiency worries

On a larger scale, farm closures are worrying for what is a successful industry for Penang and the country. The state’s self-sufficiency level (SSL) for pork was 265% in 2019 (the ability of local production to meet local demand), according to Penang state figures.

That figure is also 30% of the country’s pork supply. Fu Sheng says the state sells pork to Kedah, Perlis, Perak, Kelantan and the Klang Valley. This year, he expects the SSL to drop to below 200%.

Likewise, at national level, pork SSL has been above 90% since 2015, recording 94.2% in 2020, according to the federal government’s Agrofood Statistics 2020.

Pork is also the second largest livestock industry in Malaysia after poultry. There are 437 farms in Malaysia as of January 2022, with one farm exporting to Singapore. According to DVS, the industry was worth RM4.1 billion (US$8.97 million) in 2021, 18% of the value of all livestock.

Nonetheless, the Department of Environment told Macaranga that the “the self-sufficiency level for pork production needs to be reviewed so that it takes into account rivers’ (pollution load) carrying capacity.”

According to the agency, pig farms are the second largest source of river pollution nationwide.

Both Wongs say funding assistance in the form of low-interest loans or subsidies would expedite modernization and wastewater treatment.

Sarawak story

In Sarawak, one of the country’s most successful pig farms had to invest every sen of their own profits to convert to their closed-house zero-discharge system.

Ten years later, Green Breeder is certified for good agricultural practices and is the only Malaysian outfit allowed to ship live pigs to highly food safety-conscious Singapore, supplying 2,400-2,500 animals weekly.

“Only when we started exporting live pigs were we able to get loans from commercial banks,” says manager Ng Yong Han. According to DVS Sarawak, exports were worth RM65 million in 2019.

Size matters

“They will not loan to operations with only a 1,000-2,000 sow population.” Green Breeder now has 9,500 sows. The largest farm in Kampung Selamat has 500 sows, and in Kampung Valdor, 1,000 sows, with the average around 300.

It appears that laws to address pollution coupled with rising costs, low profits and ASF are exacerbating the closure of small traditional farms, to be replaced with larger outfits.

Ng explains it is about economies of scale. “Large farms will definitely be more efficient and have bigger bargaining power with suppliers for things like drugs and feed etc.

“Bigger farms can also afford to do more to increase their productivity and efficiency such as hiring vets and consultants.

“For example, a farm with 5,000 sows would be able to easily afford to pay for a fulltime vet whereas a farm with say, 800 sows might not have the extra cash to hire one.”

ASF-free for now

Ng also says the closed-house system gave them a leg-up in fobbing off ASF, which has rampaged through Sarawak. Facilities already include fencing, clear and guarded indoor/outdoor areas and changing rooms.

But not willing to risk infection, Green Breeder have invested in biosecurity measures – “it’s all about disinfection”, even in their retail outlets – as well as bought PCR machines to test their animals weekly and built an additional chlorination system to treat river water to feed their pigs.

Still, the company is bracing for ASF to hit.

Meanwhile, small farmers like “Lau” with no access to funds or support from the government look like they could continue polluting until they get shut down.

Veterinary public health expert Dr Nur Indah Ahmad says it is critical to understand farmers’ situation and needs.

In fact, all parties need to come together to solve the pig farm pollution issues, she says, from federal agencies and local government to farmers and environmentalists. Currently, they “are not trying to…be on the same page.”

One Health

Above all, solutions need to be holistic. “When you have this kind of issue, it is a One Health issue… (You need) an integrated approach that aims to achieve balance, optimize the health of us (humans), also animals and ecosystems.”

Nur Indah is deputy coordinator of the Malaysia One Health University Network, which looks at a One Health approach to infectious and zoonotic diseases.

Penang’s law and regulations are strong enough to tackle pollution and protect rivers and the environment, says DOE.

“However, their enforcement is dependent on state agencies. The effectiveness of existing laws can only be seen through full enforcement.”

The department also advocates empowering and funding communities to clean and conserve rivers along with farmers, agencies and NGOs.

“In the past few years, the government has done a lot,” says association head Fu Sheng.

“For example, DVS comes to talk about environmental issues because many farmers have low educational levels. There are people who don’t want to convert [to modern systems] but because of the enactment and guidelines, they have to.”

Bad rep

A fourth-generation farmer, he is sensitive about pig farming’s bad reputation. Social media is rife with posts of random photographed accusations of “pollution,” which upon investigation, are false.

“People make fun of us, call us ‘Pulau Pig-Farm’” in reference to ‘Pulau Pinang’, the official name of Penang, says Fu Sheng. “Ninety per cent of farmers have submitted plans (for closed-house systems). We won’t run away.”

This story was produced with the support of the Earth Journalism Network and was originally published by Macaranga on September 20, 2022. It has been lightly edited for length and clarity.

Banner image: Farms that cannot afford to modernize operations call it a day / Credit: Lee Kwai Han.