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Characteristics of Thailand's commercial pig and poultry industries, with international comparisons

C. Tisdell,a T. Murphy b and T. Kehren a

The authors can be contacted as follows: a Department of Economics, The University of Queensland, Brisbane 4072, Australia; b St Edmund's College, Cambridge University, Cambridge, CBO BN, United Kingdom.
Research for this paper benefited from financial support from ACIAR Project No. 9204. The usual caveat applies. The authors wish to thank Akhter Hamid for his assistance.

CARACTÉRISTIQUES DE L'ÉLEVAGE COMMERCIAL DU PORC ET DE LA VOLAILLE EN THAÏLANDE ET COMPARAISONS INTERNATIONALES

La plus grande concentration de porcs et de volailles dans le monde se trouve en Asie. Selon les statistiques de la FAO pour 1996, l'Asie comptait 58 pour cent des porcs, 49 pour cent des poulets et 86 à 88 pour cent des canards et des oies existants dans le monde. Compte tenu de l'accroissement démographique et de la hausse des revenus, la production de ces petits animaux ne cesse de progresser. Toutefois, la situation est très variable d'un pays à l'autre. Dans cet article, l'attention est concentrée sur le cas de la Thaïlande, un petit pays au regard des normes asiatiques, mais d'importance mondiale en tant qu'exportateur de volailles. En fait, les élevages de porcs et de volailles sont devenus les grands secteurs «industriels» de l'élevage en Thaïlande, soutenus par la croissance économique spectaculaire que connaît ce pays depuis les années 60. Bien que les porcs et les volailles représentent, de façon traditionnelle, une part importante du système d'agriculture intégrée en Thaïlande, la production de volailles et, plus récemment, celle de porcs se sont transformées en secteurs commerciaux spécialisés, hors de l'exploitation agricole, dans des unités spécialisées de type industriel. Le présent article s'intéresse au secteur commercial de ces industries plutôt qu'à la production secondaire au niveau de l'exploitation agricole.

CARACTERISTICAS DE LA INDUSTRIA PORCINA Y AVICOLA COMERCIAL DE TAILANDIA, CON COMPARACIONES INTERNACIONALES

En Asia se encuentra la mayor concentración de industrias porcinas y avícolas del mundo. Según las estadísticas de la FAO de 1996, Asia contaba con el 58 por ciento de los cerdos de todo el mundo, el 49 por ciento de los pollos y el 86-88 por ciento de los patos y gansos. Con una población humana y unos ingresos en aumento, la producción de estos pequeños animales seguirá creciendo. Sin embargo, las condiciones y circunstancias varían considerablemente de un país asiático a otro. En el presente artículo se concentra la atención en Tailandia, país pequeño para los niveles asiáticos, pero con importancia mundial como exportador de aves. Las industrias porcinas y avícolas se han convertido en los principales sectores pecuarios «industriales» de Tailandia, estimulados por su enorme crecimiento económico desde los años sesenta. Si bien los cerdos y las aves han formado tradicionalmente una parte importante del sistema agropecuario integrado de Tailandia, la producción avícola, y más recientemente la porcina, ha evolucionado hacia sectores comerciales especializados, saliendo de las granjas para formar unidades especializadas de tipo industrial. En el presente artículo se analiza el sector comercial de estas industrias más que el aspecto de la producción en las granjas.

INTRODUCTION

Asia contains a heavy concentration of the world's pigs and poultry. It accounts for the major proportion of the world's pig population and that of ducks and geese. It is soon likely to account for the major part of the world's chicken population. Based on FAO statistics, Asia in 1996 possessed 58 percent of the world's pigs, 49 percent of its chicken population and 86 to 88 percent of its ducks and geese. With growing human populations and increased incomes in Asia, populations of these small animals are on the rise. However, conditions and circumstances vary considerably between Asian countries. The situation considered here is in Thailand, a small country by Asian standards but a globally significant exporter of poultry.

The pig and poultry industries have become Thailand's major "industrial" livestock sectors. The dramatic growth of the Thai economy from the 1960s until recently stimulated the rapid expansion of agricultural industries such as the poultry sector and has since generated increased demand for other livestock commodities such as pork. While pigs and poultry have traditionally been an important part of the integrated farming system in Thailand, poultry and, more recently, pork production have developed into specialized commercial sectors with production occurring off-farm in specialized industrial-type units. This article is concerned with the commercial sector of these industries rather than sideline on-farm production of pigs and poultry.
The commercialization of broiler production commenced in Thailand in the early 1970s and, today, possibly less than one-quarter of Thailand's total poultry production is supplied by villagers. Nevertheless, poultry in villages remains an important source of local supply and a significant source of supplementary income for villagers. Whereas village supplies of poultry appear to have remained stationary, commercial production has expanded rapidly, mainly as a result of the efforts of large companies - many of which are multinationals. As a result, Thailand has become a significant exporter of broilers; however, the country's level of exports may now have stabilized and actually appears to be in slight decline owing to factors discussed later in this article.
The Thai pig industry became increasingly commercialized in the 1980s. Since that time, village production of hogs has declined and commercial units have become the main source of supply of pork in Thailand. While some large companies are involved in pig production, they are on the whole smaller than those involved in the commercial poultry industry, with most being local domestic enterprises rather than large multinational companies. Thailand has been able to meet its own pork requirements and exports a modest amount of frozen and boiled pork, although its pork industry has not been as internationally competitive as its broiler industry.

PIGS IN THAILAND

Throughout the 1960s and 1970s Thai pig production was dominated by the backyard raising of pig cross-breeds for consumption and the generation of supplementary income. Most pigs in Thailand were traditionally raised by Thai rice farmers to consume farm by-products and wastes and generate extra farm income. Along with buffalo, cattle and poultry, pig production was an important component in an integrated small farm cropping system where buffalo and cattle were used for draught purposes and pigs and poultry for consumption (Murphy and Tisdell, 1995b).

The development of pig production from predominantly village-based to a growing commercial industry can be attributed to significant socio-economic change that has occurred in Thailand over the last few decades. This change has seen an increase in population, tourism and income levels (following dramatic economic growth over the last 20 years) and an associated increase in demand for meat such as pork, both domestically and internationally (Murphy and Tisdell, 1995a). Processed pork on the domestic market consists of a variety of traditional meat products, including Chinese sausages, roast pork and continental meat products such as ham, bacon and baloney.

Commercial pig industry

Modern intensive swine production began in 1973 with the importation of breeding stock from the United Kingdom and the United States (Beeghly, 1989). Commercial development of this sector was fostered by a small number of feed mill companies which provided piglets, animal feeds, drugs, veterinary services and farm management expertise to contracted pig producers. Therefore, as in commercial poultry rearing, the contract system played an important role in the development of the Thai commercial pig industry.

However, while the poultry industry expanded dramatically in response to this rising demand, the pork industry encountered several constraints that progressively hindered this sector's development. While in 1975 pigs generated the largest share of value added in the Thai livestock sector, Poapongsakorn (1985) noted that the change in the structure of pig production had been minimal and its development up until the 1980s had been remarkably slow. Most analyses (e.g. Poapongsakorn, 1985) of the Thai pig industry appropriately attribute this slow development in the commercial production of swine to the instability of market prices of pigs, high feed costs, government regulations and the associated monopsonistic dominance of the market by carcass wholesalers.
Within the last decade, large-scale or industrialized pig farming has rapidly increased, especially in eastern and central regions of the country. Swine production is concentrated in the central provinces around Bangkok, an area which accounts for approximately 36 to 40 percent of total pig production. The northern region ranks second, accounting for 26 to 30 percent of total national production (OAE, 1992a). This concentration is due to the size of the Bangkok market, including its population and level of per caput income as well as the ready availability there of raw materials for production and the effective supply infrastructure, including governmental and non-governmental services (Luengyosluechakul and Kortheerakul, 1989, p. 96). The major market for pork in Thailand is Bangkok, and pigs were supplied in large numbers from provincial areas in the north and northeast until part of the demand was met from the central plain region when intensive farming was developed there.
Over the last decade, the importance of commercial pig farms has increased significantly. Beeghly (1989) noted that modern operations have at least 400 to 500 sows, with Landrace and Large White as the most common breeds and Durocs as the preferred sire. It has recently been estimated that about 80 percent of all pig production is now carried out by commercial enterprises (Sheehan, 1993). From slightly more than 4 million head of pigs in 1983, their numbers in Thailand increased to 4.6 million in 1991 and reached 5.3 million in 1994, subsequently falling back substantially according to the statistics of FAO. The figures shown in Table 1 for the period 1991-1996 indicate a considerable fluctuation in Thai populations. This may be partially due to the price instability and to disease epidemics. In recent years, the growth of the industry has not been sustained and has actually declined. In addition to the above factors, it may be that Thai consumers are increasingly substituting beef for pork in their diets: Thai cattle numbers have shown a steady upward trend, as have imports of beef.

Marketing of pigs and pork

The marketing of pigs and pork in Thailand throughout the 1980s was described as "traditional commercial "(Poapongsakorn, 1985, p. 229), being chiefly in the hands of a large number of entrepreneurs and agents. Since most of the swine were raised in the backyards of small farmers scattered throughout the country, only the small entrepreneurs could efficiently assemble small numbers of pigs from these farms. However, while they still play a role in assembling pigs from the villages (ACIAR, 1994), the fact that less than one-fifth of hogs are now marketed from backyard operations and the development of more intensive commercial industry located in accessible urban regions have gradually diminished this dependence on the small entrepreneurs.

1
Pig stocks in Thailand, 1991-1996
Nombre de porcs en Thaïlande en millions de têtes, 1991-1996
Cabaña porcina de Tailandia, 1991-1996, en millones de cabezas

Year

Number of head (millions)

1991

4.9

1992

4.7

1993

5.0

1994

5.3

1995

4.5

1996

4.0

Source: FAO livestock statistics.

Exports of pigs and pork

A small proportion of Thailand's live pigs and frozen piglets have been exported to Hong Kong and Singapore. Exports of swine and pork products have only ever represented a small proportion (generally reported to be around 5 percent) of Thailand's meat exports and a small proportion of the country's total pork production. The industry is primarily oriented to supply the home market. Table 2 gives a picture of Thailand's export performance for live pigs and pork from 1977 to 1995. The export patterns for both live pigs and frozen piglets have been extremely unpredictable in terms of volume (which is mostly low) and country of destination. This has been predominantly a result of the unwillingness of foreign countries to accept unhygienic pork meat or diseased hogs.

The stagnation of Thai pork exports throughout most of the 1980s has also been attributed to the poor conditions of slaughterhouses as well as the fact that the meat processing sector had been underdeveloped (Poapongsakorn, 1985, p. 225). These conditions improved in the 1980s and larger quantities of pork were exported in 1990 and 1991 than in earlier years, although they declined in 1992 and have remained low ever since (Table 2). Thailand's pork exports for 1997 are predicted to be 645.2 tonnes in the country's Eighth National Plan (1997-2001), a negligible fraction of the national production and consumption of pork, indicating that little significant change is expected in the export situation during the period of this plan. This is because disease problems continue in Thailand, meat plants do not satisfy qualifying standards for export, pig feed is more expensive locally than internationally and other international suppliers are extremely competitive (Government of Thailand, n.d.). The continuing need to import improved parent stock could also limit the growth and export prospects of the industry.


Import/export statistics for Thai swine and pork
Importations/exportations de porcs et de viande porcine thaïlandais
Estadísticas de importación y exportación de cerdos y carne de cerdo tailandeses

Years

Imports of swine
(head)

Exports of swine
(head)

Exports of pork
(volume in tonnes)

1977

739

639

16

1982

1 389

11 488

27

1987

2 529

12 631

21

1988

3 582

1 201

36

1989

1 653

510

183

1990

1 137

38

1 436

1991

2 897

n.a.

1 129

1992

763

40

288

1993

11 185

20

29

1994

3 066

556

21

1995

n.a.

n.a.

59

n.a. = not available.
Source: OAE (1993 and 1995); FAO (1983 and 1993).

Constraints on the swine industry and possible reforms

In the past, the Thai Government imposed several regulations on the trading of live hogs, pig carcasses and slaughtering activities, and these have greatly hindered the growth of the swine industry.

As outlined in the studies by Luengyosluechakul and Kortheerakul (1989) and Poapongsakorn (1985), the pork industry has been affected in the past by regional restrictions on the location and trade of slaughterhouses. Prohibition of the shipping of meat carcasses across the trading area of each slaughterhouse and the limit of only one slaughterhouse in each trading area are regulations that have resulted in higher marketing costs and limited market alternatives for pig growers. Furthermore, such regulations have strengthened the monopsonistic position of local slaughterhouses and have often resulted in the slaughtering of stock which are in poor condition in view of the prolonged distance of transportation. Poapongsakorn (1985) notes that because of the price instability of demand in the Thai pig market, the distribution of losses from high marketing costs are incurred predominantly by pig growers. Luengyosluechakul and Kortheerakul (1989, p. 96) outline further problems associated with disease incidence, inadequate knowledge and fluctuating prices.

Uncertainty in the market price for pigs and feed

Luengyosluechakul and Kortheerakul (1989, p. 97) and Poapongsakorn (1985) have all highlighted the important impact that fluctuations in pig and feed prices have had on constraining the growth of the Thai pig industry. Poapongsakorn (1985, p. 253) noted in a historical analysis of the "hog cycle" that the large variations in the price of pigs were a result of the overreaction of markets to supply and demand. Long hog cycles were evident owing to the slow dissemination of price information among the numerous small-scale pig producers. The frequency of government intervention and uncertainty associated with policies were also contributing factors to this instability. The hog-bran price ratio was also seen as important in determining the nature of the hog cycle and fundamental in determining hog profitability and supply. Lueng-yosluechakul and Kortheerakul (1989, p. 96) suggested that government and other relevant organizations had not concerned themselves appropriately with these problems.

Disease incidence

Certain factors have seriously affected the spread of disease among pigs. Particularly at the village level, they include the inability to diagnose diseases, the unrestricted movement of sick animals, the high density of pig populations together with unhygienic and poor sanitation. Donaldson (1993) noted that, although high mortality rates for foot-and-mouth disease (FMD) outbreaks are rare among adult livestock, they can reach 90 percent in piglets in high-density populations. Therefore, with the increase of intensive commercial pig production, the susceptibility of pigs to rapid outbreaks of disease has also increased. The periodic shortage of some vaccines and inadequate response to disease outbreaks are also seen as major problems.

Inadequate knowledge and appropriate technology

The pig industry has clearly been constrained in the past through a lack of appropriate technical expertise at the village level. Luengyosluechakul and Kortheerakul (1989) criticized the limited level of innovation, communication, technological transfer and implementation of basic research by the agencies responsible for developing the industry.

While intensive commercial pig farms have developed in spite of the traditional domination of the industry by small backyard growers, they are still constrained in several important areas. Disease still plagues the industry aided by the unhygienic standard of many slaughterhouses, the low level of meat inspection and the high incidence of illegal slaughtering - factors which have cost Thailand valuable foreign exchange in lost export opportunities. While the market at the producer level is characterized by competition, the carcass wholesalers and slaughterhouses are granted local monopsonistic power. As a consequence of the power of the carcass wholesalers and the limited market for live pigs, swine growers have received low farmgate prices. Consumers are also worse off under such conditions, owing to higher retail prices and the low standard and unhygienic quality of meat. This situation is made worse by problems of the hog cycle and increasing prices of feedstuffs, which helps to explain why the number of commercial hog farms is low.

Observation on prospects for the Thai pig industry

Although the Thai Eighth National Development Plan (1997-2001) projects extremely high increases in Thai pig stocks for the period, these estimates or targets are not convincing. For example, the target stock for 1997 is 8.6 million, rising to 11.3 million in 2001 (Government of Thailand, n.d.) which, on the basis of the FAO statistics given in Table 1, would imply more than doubling 1996 stocks in 1997 and almost trebling them by 2001. This is not in line with recent trends in stocks and there is little indication that these constraints have disappeared. In fact, as pressure for reduced trade protection increases, the Thai pig industry could encounter import competition which might reduce its size.

A further serious constraint to the Thai pig industry is the high price of local feedstuffs and the import tax on those imported. A background paper for the Thai Eighth National Development Plan recommends the withdrawal of this tariff (Government of Thailand, n.d.) in order for Thailand to increase exports of pork. Nevertheless, given its labour costs and disease prevalence, Thailand may still not enjoy a comparative advantage.
Let us now consider the other major industrial livestock sector of Thailand.

POULTRY IN THAILAND

The poultry industry of Thailand comprises broilers, laying hens, ducks and geese. Since 1982, the broiler industry has expanded rapidly because of the major increase in the number of commercial farms. As in the swine industry, the central plains are the main area for broiler production, with more than 35 percent of all broilers being raised here. The largest chicken-raising provinces in this region are Chacheongsao, Nakhon, Pathon, Suphanburi and Ratchaburi (OAE, 1993). Poapongsakorn (1985) has classified Thai chicken farms into three types: i) backyard growers; ii) independent commercial farms; and iii) contract farms.

Backyard growers. The average flock of all types of backyard farms is estimated to be about 70 birds, with over half of all growers raising fewer than 20 birds. In 1985, it was estimated that approximately 99.7 percent of all producers were backyard growers, although they constituted only about one-third of production (Poapongsakorn, 1985, p. 259). Today they account for less than one-quarter as a result of the expansion of commercial production. Village production in this category has remained relatively constant.
Independent commercial growers. More experienced producers usually adopt more advanced methods of production. Independent growers often engage in contract farming with smaller producers (Poapongsakorn, 1985, p. 260). The inability of such farms to benefit from the economies of size associated with the larger contract growers will result in a decline in their numbers in the future.
Contract growers. The introduction of contracts between chicken growers and hatcheries or feed companies, which supply inputs for pre-emptive marketing of output, only became genuinely widespread when the Charoen Pokphand Company introduced wage and price guarantee contracts in 1976 (Poapongsakorn, 1985, p. 260). Almost 100 percent of commercial growers in Thailand are full- or part-time contract growers.
In addition to production by poultry farms, it is estimated that 65 million to 85 million native chickens are raised by 4.3 million farming families in Thailand. These native chickens account for about 30 percent of the national chicken population, of which one-third is raised in the northeast. The chickens move freely around the house and in neighbouring yards. Their owners do not usually provide feed, housing, medication or vaccination against infectious diseases. Hence, their growth rate is low. Nevertheless, they play an important part in the national economy of the country as a source of additional income for villagers. Because of their meat quality and taste, they are preferred by consumers and so command a price premium.

The commercial poultry industry

The dramatic structural changes and growth in the Thai poultry industry began in the 1970s. Prior to this, there were a few attempts to stimulate growth in the industry, with the introduction of modern production methods in 1946 and the importation of high-yielding stock in 1956 (Poapongsakorn, 1985). These modern production methods were implemented by some growers in the late 1960s; however, it was not until the early 1970s that a significant expansion of the industry was started by a few large private companies. In 1973, the Charoen Pokphand Company exported the first batches of chickens to Japan. This company established the first modern chicken slaughterhouse in the same year in order to process frozen chicken for the export market. In 1977, the Bangkok Livestock Trading Company initiated a contract farming system in Sri Racha. Since then, slaughterhouses have been established by a number of large companies and contract farming has become common in Thailand (Poapongsakorn, 1985, p. 230).

Over the past two decades there has been a tremendous expansion of Thailand's commercial broiler industry. In the early 1970s, most farmers grew only small numbers of indigenous chickens mostly for on-farm consumption, and there were virtually no exports. This was soon to change because, between 1974 and 1981, the annual growth rates of the number of broilers and in the quantity of formula feed produced were 30 and 24 percent, respectively (Poapongsakorn, 1985). Thailand is now one of the world's largest chicken-producing countries and one of the largest exporters to Japan. This success has been attributed to the initiative and ability of a few private feed mill companies.
Although commercial poultry stocks in Thailand increased during the 1980s and into the very early 1990s, they peaked in 1993 and are now much lower, as can be seen from Table 3. These changes occurred because Thailand's broiler industry lost its international competitiveness to countries such as China.

Structure of the poultry industry

The economies of scale associated with large-scale production, marketing and processing saw the major feed mill companies start introducing vertical integration into the Thai poultry industry. They purchased their own slaughterhouses in the late 1970s, a development which lessened the past dependence on large Chinese wholesalers who were unable to compete with the superior broiler processing and marketing adopted by these modern chicken processing companies. The poultry industry in Thailand hence became highly concentrated in the hands of a few leading integrated companies (Poapongsakorn, 1985, p. 297). While the success of the Thai poultry industry can be attributed to the ability and initiative of these companies, it must be noted that the oligopolistic structure of the market has not been of benefit to everybody in the industry. There has been public concern about possible exploitation of small farmers by such market powers and fears about the eventual monopolization of the market, with consequent welfare losses to the consumers.

Poultry exports

The first batch of frozen chickens exported from Thailand was in 1973 when the Bangkok Livestock Trading Company exported 142 tonnes to Japan (OAE, 1992a, p. 160). Since then, broiler meat exports increased from 4 254 tonnes in 1977 to 180 261 tonnes in 1992, but have since declined (Table 4). The large increase occurred between 1977 and 1982. The Figure illustrates the recent trends in the export of poultry meat.


Thai production and export of poultry, 1985-1995
Production et exportation de volailles en Thaïlande, 1985-1995
Producción y exportaciones tailandesas de aves: 1985-1995

w6437t02.gif (7852 bytes)


The significant position Thailand has achieved in the world market is to a large extent due to its ability to raise chickens at lower costs than other exporters, for whom feed and labour costs are the most important. However, they need to be watched closely, since labour costs are increasing and the quality and supply of feed is diminishing, even though there appears to be an abundance of agricultural and fishery products, especially corn and fishmeal. In fact, these developments have greatly influenced Thailand's competitiveness with China. Furthermore, recent FAO predictions stated that increased labour costs in Thailand for poultry production could result in decreased sales and erode trading with Japan, its major market (FAO, 1994a). In fact, this has already happened.
The decline of Thailand's poultry production and exports from 1994 to 1996 can also be attributed to the fact that many of the large multinational companies involved in contracting chickens for raising are moving their production offshore. Furthermore, the competition from Brazil and from subsidized United States exports is also creating difficulties. It seems that Thailand's position as an exporter of broilers will continue to decline at least marginally. Yet the Eighth National Development Plan predicts an increase of almost 50 percent in exports of broiler meat between 1997 and 2001 and even further expansion of the industry. This seems to be a very optimistic projection indeed, given the downward trend in production and exports since 1992, and it fails to take into account the changes in Thailand's international competitiveness.
Thailand exports substantial quantities of eggs, and the Eighth National Development Plan predicts that it will export about half of its total commercial egg production in 1997, i.e. about 3 billion eggs. Furthermore, there are also export market opportunities available for frozen duck meat and eggs, although the value of such exports has been relatively insignificant. The overseas markets for duck include Hong Kong, Singapore, Japan and Germany. So far in 1997 15 million kg of duck meat and some 200 000 eggs have been exported.


Commercial stocks of poultry in Thailand, 1991-1996
Nombre de volailles destinées au commerce en Thaïlande, 1991-1996
Población avícola comercial de Tailandia, 1991-1996

Year

Number of head (millions)

1991

126.6

1992

137.4

1993

139.0

1994

130.0

1995

80.2

1996

110.0

Source: FAO statistics.


Import/export and production statistics for Thai broiler meat
Importations/exportations et production de viande de poulet à rôtir de Thaïlande
Estadísticas de importación y exportación y de producción de carne de pollos de asar tailandeses

Years

Imports
(poultry - fresh/chilled/frozen)

Exports
(fresh/chilled/frozen)

Production
(million tonnes)

 

Volume (tonnes)

Value (1 000 baht)

Volume (tonnes)

Value (1 000 baht)

Frozen broiler meat

1977

-

-

4 254

157

179

1982

-

-

33 217

1 310

474

1987

-

-

81 905

4 019

505

1988

63

3 326

95 784

4 869

518

1989

106

5 304

107 983

5 879

625

1990

121

6 727

138 945

7 589

508

1991

101

5 493

150 000

8 000

643

1992

143

7 293

180 261

n.a.

n.a.

1993

192

n.a.

163 828

n.a.

n.a.

1994

232

n.a.

158 941

n.a.

n.a.

1995

293

n.a.

156 943

n.a.

n.a.

Sources: OAE (1992b, 1993 and 1995); FAO (1993).

 

Constraints on the Thai poultry industry

The broiler industry has been relatively free from major problems over the last few decades. Farm and disease management and the introduction of modern technology have provided a solid foundation for a consistently high performance in recent times. While price fluctuations hindered progress in the past, labour costs and diseases are the predominant factors that have had a significant impact on the industry's competitiveness within the domestic and international economy.

Labour costs

The international competitive edge that the Thai poultry sector has had over the last few decades because of low production costs is beginning to diminish as the standard of living rises throughout Thailand and wages increase. This trend has halted the rapid expansion of the poultry industry and will increase pressure on companies to focus more attention on production efficiency, also obliging them to seek neighbouring markets, such as Australia. Thailand's relative competitive advantage over their rivals in China and other countries is also declining.

Disease incidence

Poultry have a reduced resistance to disease when temperatures and humidity are high. Stress induced during the hot humid months of summer (March to April) often causes heightened susceptibility of poultry to diseases in Thailand. Infectious diseases, such as Newcastle disease and fowl cholera, kill large numbers of village chickens every year. Most villagers do not strictly follow the recommended vaccination and deworming programmes.

The development of more intensive commercial livestock industries, while offering a greater level of control over the application and regulation of hygiene standards, also results in keeping large numbers of higher-valued livestock in confined spaces (i.e. feedlots) where a disease outbreak would be swift and costly. The question of improved animal health therefore remains very important for the progress of the Thai livestock industry. It is, however, at the village level rather than at the commercial level that the control of poultry diseases remains a major problem in Thailand.

International comparisons

Table 5 provides some rough-and-ready "performance" comparisons between Thai broiler production and that of the world's major exporters. Birds are not stocked as densely in Thailand as in other exporting countries which is probably a plus from an animal welfare point of view, even though stocking rates are still high. Lower stocking rates imply more capital per bird. On average, at 5.7 percent, mortality rates in Thailand are the highest and feed costs exceed those of Brazil and the United States, while they are comparable with those of China. Wholesale prices in Thailand are higher than in Brazil, the United States and China. While wholesale prices are also high in the Netherlands and France, their markets are protected by the European Community (EC). The feed-conversion ratio in Thailand is roughly the same as for the other major exporters.

Although Thailand's Eighth National Development Plan projects an increase in its poultry stocks, the basis of such a prediction is not completely clear. Export competition continues and, even if subsidies for broiler production are reduced under the Word Trade Organization (WTO), Thailand may find it difficult to compete internationally with China, the United States and Brazil. Apart from Thailand's rising labour costs, as the Eighth National Development Plan points out, feedstuffs such as corn and soybean meal are in short supply. Indeed, the Food and Agricultural Policy Research Institute at the University of Missouri (Internet information obtained September 1997) predicts that Thailand will become a net importer of corn by the end of this century. Both its poultry and pig production may therefore be constrained by feed supplies.


Comparisons for the six major broiler exporting countries
Comparaisons entre les six principaux pays exportateurs de poulet à rôtir
Comparación de los seis principales países exportadores de pollos de asar

Variable

Brazil

United States

China

Thailand

Netherlands

France

Stocking density (bird/m2)

10-12

14

15-16

8-12

23

16-25

Mortality (%)

5.0

5.0

5.0

5.7

4.9

3.0-7.5

Feed cost/tonne (US$)

165

176

289

280

384

315

Wholesale price (US cents/kg)

94

123

133

140

194

205

Source: Based on Anon. (1996, p. 26).

ENVIRONMENTAL AND "GREEN" ISSUES

With increasing livestock numbers in Asia and the growth of units involved in intensive livestock husbandry, associated environmental problems are also growing but the amount of information about such problems in Asia is still very limited. Nevertheless, severe water pollution problems from piggery manure and wastes have been reported for Taiwan Province of China. The Food and Agricultural Policy Research Institute at the University of Missouri reports that, as a result, the Taiwanese Government has imposed environmental restrictions on piggeries that will limit the expansion of their pig production. Similar restrictions do not appear to have been imposed yet in Thailand. Nevertheless, a support paper for Thailand's Eighth National Development Plan specifically mentions piggery wastes as a problem (Government of Thailand, n.d.).

Increasing livestock numbers, especially in intensive systems, can create many environmental problems, as experience in Europe, particularly in the Netherlands, has illustrated (Dietz, 1992). Animal manure from intensive livestock units can be a cause of eutrophication of surface waters owing to its nitrogen and phosphate content and it can lead to nitrate pollution of groundwater and volatile emissions of ammonia from manure as well as contributing to acid rains (Dietz, 1992). Heavy metals may also be present in such manure and chemicals may be washed from intensive livestock farm buildings into waterways. The water so affected will be less suitable for aquaculture, an important activity in Thailand (and in Taiwan Province of China, where it was a major factor in restricting the growth of piggeries) not to mention its adverse impact on supplies of potable water.
Manure from piggeries and poultry farms is sometimes used to fertilize water for fish aquaculture, as is done by some Thai piggeries. However, leakages of nitrogen and phosphorus from such aquaculture ponds can occur.
Piggeries and poultry farms also cause air pollution through the release of ammonia. Little attention is paid to this issue in Thailand and small commercial piggeries are sometimes found in relatively built-up areas.
It has been commented that intensive farming of livestock is not an energy-efficient use of food such as grain (from the human point of view), even though this form of livestock husbandry is growing in importance in Asia as incomes increase. This is a complicated issue which cannot be assessed here (see, for example, Tisdell and Harrison, 1997). Furthermore, intensive livestock production is usually dependent on cropping, an intensive form of land use. For example, Dietz (1992, p. 152) points out that intensive livestock in the Netherlands are fed mostly on imported tapioca from Thailand and soybeans from Brazil and that approximately 10 million ha are required to produce this food - five times the land area available in the Netherlands. Such land use can be unsustainable and contribute loss of biodiversity. Nevertheless, should the European intensive livestock industry collapse as a result of the withdrawal of trade protection, for instance, it is possible that an expansion of the industry in Thailand or Brazil could compensate to some extent so that very little change in land use in these countries occurs. It would merely be a change in the global location of the intensive industry.
Growth of intensive livestock farming appears to be associated with loss of biodiversity of livestock. In the case of pigs, Landrace and native breeds are increasingly being replaced by "improved" breeds and varieties. This is happening in Asia, including Thailand, and may create problems for the long-term sustainability of livestock production because of declining genetic pools which, for example, reduce the scientific capacity to breed animal strains resistant to new diseases.
Animal welfare issues have not reached the degree of prominence in Thailand and most of Asia that they have in higher-income countries. It is, however, difficult to generalize about welfare conditions for livestock in Asia. In fact, Table 5 indicates that on average there is less crowding of broilers in Thailand than in other major exporting countries and that crowding in the Netherlands and France is extremely high. However, this is only one aspect of animal welfare. Large piggeries and poultry farms in Thailand actually seem to be run along similar lines to those in the West. Other sensitive issues include the risk to humans of the use of antibiotics, growth hormones and chemical additives to food when livestock is kept under intensive conditions. According to its Eighth National Development Plan, Thailand plans to upgrade the safety of its livestock products for human consumption.
There is potential for all of the above issues to affect international trade in livestock products but insufficient research has been carried out for policy purposes. This is probably because it is only recently that Thailand has seen the rapid expansion of these industries, a pattern which is being repeated in several other East Asian countries as they experience economic growth. This suggests that higher priority should be given to research in this area than has been done in the past.

CONCLUDING COMMENTS

While the Thai broiler industry experienced rapid expansion in the 1980s and into the early 1990s, favourable conditions for further expansion no longer exist. In fact, according to The Nation (11 September 1995, p. B4), the Research Department of the Bangkok Bank indicates that Thai exports of frozen chicken declined in 1993 and 1994, mainly owing to increasing competition from China, the United States and Brazil. Thai production of broilers is now well below its previous peak.

While the GATT Uruguay Round Agreement may result in lower subsidies for broiler production in the United States and Brazil, it may cause markets such as those of the Republic of Korea and Taiwan Province of China to allow greater access of imported frozen chickens. However, despite these opportunities, China, the United States and Brazil are likely to continue to provide strong competition for Thailand and limit its exports of broilers.
According to the Research Department of the Bangkok Bank (reported in The Nation, 11 September 1995, p. B4), Thailand is facing considerable constraints in expanding its livestock industries using local grains and food supplies. The Animal Food Manufacturers were given special clearance in 1995 to import maize, which has been in short supply in Thailand for several years. Although the demand from the EC for Thai tapioca pellets is reduced (because the price of EC-produced animal feed has fallen), the price of tapioca pellets has not fallen in Thailand. This is partly because Thailand reduced its area of cassava and because the global demand for processed animal food is increasing. Rising livestock feed prices not only affect the poultry industry but also Thailand's pig and cattle industries involved in feedlotting or supplementary feeding.
Considerable care is taken in the Thai commercial poultry industry to control poultry diseases, to sustain the profitability of the large companies involved and to maintain the reliability of supply.
Commercial piggeries also appear to be keenly aware of the economics of controlling diseases in their stock. However, it appears from casual observation that the larger piggeries give more attention to this control than the smaller ones, while control is even less among villagers. Nevertheless, disease remains a serious problem for Thailand's pig production.
From this paper and from Murphy and Tisdell (1995a; 1995b) it is clear that substantial structural change has occurred in the Thai livestock sector over the last two decades. Commercialization has been most marked in the pig and poultry industries, whereas most beef and buffalo production remains in the hands of villagers. It is on the village level that control of animal diseases lags most and this constrains the scope for Thailand's commercial livestock industries to operate in a relatively disease-free environment, in some instances limiting their export prospects.
With the economic growth in Asia, rapid commercialization, specialization and expansion have recently occurred in livestock production, especially in Thailand. Intensive pig and poultry production has grown in importance. The growth pattern in livestock production has by no means been smooth, and significant obstacles faced by the Thai pig and poultry industries have been highlighted in this article. Increasing environmental problems are emerging from expanding livestock production and changes in the livestock industry's structures but these appear to have been little studied in the East Asian context. Furthermore, environmental controls, for example in Thailand, seem to be much less comprehensive than in Europe. In the future, greater environmental constraints to livestock production in Thailand seem probable and may be necessary to maximize the overall benefits from economic activity. 

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