WHY WE HAVE COME TO IMPORT CONTAMINATED MEAT: The Pig Story

In 1990, Romania had over 12 million pigs. Today, only 5.5 million

One of the most interesting stories about Romania"s economy, with a promising start and a plot that promises a grim ending, comes from the animal farming sector. Once upon a time, in the 1990s, pig farming was quite a profitable branch of this traditional sector. The numbers are self evident: in 1989, Romania had 11,671,000 pigs and peaked a year later at 12,003,000 pigs. Some sources say that the real headcount was close to 15,000,000 at that time. The pork production was so significant - in terms of both quantity and quality - that Romania managed to export 80% of the total output. On the other hand, the only parts that were not exported were the heads and the legs, according to Dragos Frumosu, President of the National Federation of Foodstuff Unions (FNSIA). Other sources say it is certain that massive pork exports contributed substantially to the payment of Romania"s foreign debt during the communist period. This branch of the animal farming sector appeared able to overcome the changes triggered by the Revolution of 1989 and the transition from a centralized economy to a market economy. Who could predict 20 years of regress?

The abattoir collapse - the first sign of decline

Things took a turn for the worse in 1991 and the pig headcount began to decrease dramatically. One of the reasons is the collapse of most of the abattoirs in the country. Dragos Frumos blames that on the lack of subsidies from the State and the increase in bank interest rates by up to 140%. "Because the State"s support was either insufficient or late, many abattoir owners who took loans from the banks had to downsize their business and eventually to close it," Frumosu explained. Thus, only a few years after the revolution, the overall pig headcount was 35% smaller. "In 1990, there were 40 abattoirs capable of ensuring that 80% of the pork production was exported. In 1994-1995, many of them were closed because of lack of subsidies from the State," he added. The union leader also recalls that "the 40 abattoirs would work almost non-stop because there were farms capable of providing 1,000 pigs per day each." Presently, statistics do not outline a pretty picture: in three quarters of the counties, the abattoirs no longer exist, while recovery measures are delayed. Noteworthy is that a draft law made in 2007 stipulated the establishment of multifunctional abattoirs, but the document never became a law.

Lack of investment and reform followed

While abattoirs were facing quite a bundle of problems, the animal farming sector as a whole was confronted with a dire lack of investment and reform. Stefan Nicolae, President of the Agrostar Federation, says that the regress of the domestic pork production originated in the lack of sufficient investments in pig farms, as well as in the lack of support for scientific research. While the State stopped any form of support for research, the price of grains increased continuously. The result? Poor nutrition and no genetic innovation and improvement irreversibly scarred the genetic pool of Romanian-grown pigs. "All this caused the extinction of quality pigs and that is why we now have pigs with lots of fat and very little meat, which cannot be exported," Nicolae added. "Farmers did not have the money to go back to breeding pigs of a superior race, which was completely lost in time," he added. Romania"s domestic pork production stopped matching the domestic consumption a long time ago. In 1994-1995, the authorities responsible for the animal farming sector played a key role in the regression. "Unqualified people, who ran the Ministry of Agriculture at that time, share the blame for the disappearance of high quality pig races," Dragos Frumosu added. In his opinion, incompetent politicians infiltrated the foodstuff industry, while the specialists were either removed or simply quit their job. An eloquent example is the Department for the Foodstuff Industry of the Ministry of Agriculture. "It was first downgraded to a directorate and then it was completely disbanded," Frumosu added.

The 1996-1997 famine: pigs eat pigs

What followed in 1996-1997 seems hard to imagine. In that period, the animals were famished enough to "chew on metal bars" and "eat each other," because the State stopped financing pig farms, according to Gheorghe Caruz, President of the Romanian Pork Association (PRCP). Romania remained a significant exporter of pork until 1997. In parallel, pork imports remained insignificant until that point. Later on, trade liberalization led to a surge in pork carcass imports from 0.5 thousand tonnes to 46.5 thousand tonnes in 2001. In the meantime, exports dropped to 315 tons, according to the Agrarian Economics Institute. "The main causes for this situation were a decrease in domestic pork production and the low competitiveness of Romanian-made pork. In addition, Law 20/1999 on the legal status of disadvantaged areas enabled tax-free meat imports.

After the customs liberalization in 1997, the customs duties for pork decreased to 60% and then to 45% as of 1998. This policy triggered massive pork imports, especially from Hungary and other CEFTA countries. The State consequently decided to offer an export subsidy of 4,300 lei/kg for a quantity limited to 20,000 tons, as a measure to stimulate domestic farmers. In turn, Dragos Frumosu explained: "In this period, which lasted until the year 2000, the pigs in Romanian farms were hungry enough to try to eat the metal bars of the pen, because the State had stopped financing the pig farms and the grains were becoming more and more expensive. As of 1996, politicians completely lost any interest in pig farming. Also, the personal interests of the people who led the Ministry of Agriculture also played a part. Subsidies were not sufficient and the genetic quality of the breeding stock deteriorated. Consequently, the few meat processors left on the market had to import pork. Because Romanian-made pork was no longer acceptable because it was too fat, almost 70% of the domestic consumption was covered by imports. This percentage remains valid today, too."

Disaster in 2000-2001: pig headcount drops to 4.6 million

According to the Romanian Pork Association, the pig headcount continued to decrease in 2000-2001, to an average of 4,622,000 animals. Nevertheless, pork remains the most popular type of meat in Romania. Pork accounted for half of the overall meat production until 2000 and for 44% since 2001. Because of the drastic decrease in the pig headcount, the domestic pork production decreased from 1,023,000 live tonnes in 1989 to 613,000 live tonnes in 2001. A slight progress was logged in the years that followed. Specifically, the pig headcount increased to 6,076,000 tonnes between 2002 and 2008, but production remained about half of what it was in 1990. However, any hope for revival was shattered by further increases in the price of grains and the pig pest.

The price of grains triples

Gheorghe Caruz claims that, between 2004 and 2008, the price of grains tripled from 2,000 old lei per kilogram in 2004 to 5,500 - 6,000 old lei per kilogram last summer. However, domestic pig farmers were not able to increase their price too much, because of foreign competition. In other words, they had to maintain competitive prices, despite a three-fold increase in the cost of pig nutrients. "In 2004, a kilogram of pork used to cost 9.8 lei. This year, the price was 8.5 lei. Obviously, the problems of the meat factories worsened, because the sale price was maintained, while the cost of pig food tripled. Moreover, the payroll cost also increased. The minimum wage increased from 240 RON in 2004 to 540 RON now," said Gheorghe Caruz. For farmers, 2007 was the worst year since the fall of communism. The drought and a very poor crop pushed the price of grains to as much as 1 RON per kilogram.

EU bans Romanian pork, pest kicks in

While the price of grains increased three-fold, producers were afraid that the famine of 1996-1997 was about to return. However, the next crisis was not going to be a famine, but a pestilence. The European Commission banned Romania from exporting any kind of pork, causing Romanian pig farmers to lose all of their export contracts. The losses were estimated at some 100 million EUR and caused several farmers to go bankrupt. In the meantime, domestic demand for Romanian-made pork also decreased, because of poor quality. According to Caruz, wild boars are still not vaccinated and can easily infect domestic pigs, while pork exports are still banned. For the time being, Romania only has about 5.5 million pigs, while the domestic consumption is over 11 million pigs. In the meantime, Brussels is considering banning Romanian pork producers from selling pork even in Romania, as of 2010, unless the matter of the pig pest is solved.

Dioxine, the latest episode

If we look at the history of the pig farming business in the last 20 years, we realize that Romania has missed a tremendous opportunity, especially a member of the EU. The animal farming sector is considered a processing arm of the agriculture, as agriculture is almost impossible without animal farming, while animal farming is almost impossible without agriculture. Moreover, animal farming can also generate important quantities of fertilizers, if properly managed. But what did Romania ended up with?

Anyway, what"s done is done. As for the animal farming sector, good luck!