Thai Big Business Helps The Little Guys -
The Nongwa Farming Project
The CP Group started in Thailand in 1921 and now has three core businesses that operate in agribusiness and food, retail and distribution and the telecommunications industries. The Group is huge, employing nearly 300,000 people worldwide, with revenue for 2013 being estimated at $46 billion (USD). CP has a UK offshoot- CPFoods (UK) Ltd imports meat products and frozen foods and had a turnover of £120million in 2010.
CPFoods and BetaGro between them have over 50 per cent of the Thai pig industry, with vertical integration being a cornerstone of the CPF modus operandi – likewise the BetaGro group. The CP Group is naturally in business to make money, but also likes to be seen as helping the less fortunate in Thai society. In 1975 a programme of land reform came into being. Traditionally Thai farmers grew cassava and rice, which was basically subsistence farming. However, in 1977 the CP Group came up with a scheme, the Nongwa Farming Village Project. The aim of this project was to enable 50 agricultural workers to eventually farm in their own right, to improve their standard of living and their status in local society. The Bangkok Bank Ltd, backed by the CPGroup, provided funding to purchase 1253 Rai (495 acres) of land, with each future farmer having a farmhouse and a piggery housing 30 sows. The Village finishing unit was comprised of 24 units with a total throughput of 32,000 finishers (100kg live weight). The government gave assistance in the form of roads, public utilities and security.
First Stage :( 1977-1987)
The CPGroup provided breeding stock, feed, equipment, pharmaceuticals and veterinary services and were responsible for marketing the finished pigs. With 30 sows and finishers, each farmer earned on average $420 / month, of which $260 was used to pay back the loan and service it as well.
By 1987 all the long term loans had been repaid to the Bangkok Bank and CP helped the farmers set up the "Nongwa Farming Village Company".
The company (non-profit making) is made up of all 50 farmers, as shareholders, with an elected committee of six members who run the company. Breeding stock replacements and feed were bought at fixed prices by the Company from CP and sold to the farm members at the same price, with CP marketing the finished pigs on behalf of the shareholders. In addition CP also provided technical advice to the Company in terms of improving management and productivity. Biosecurity is a big headache the world over. Security of another type is provided in the shape of five guards employed by the company to deter pig poaching.
In 1988, in order to boost farm income CP instigated a mango growing project. Each farmer put down 20Rai to this crop and by 1994 income from the mango crop equated to that from the pig operation.
In 1991 the company net profit was $89,870 ($1797 per farmer). Furthermore, the company had boosted the Thai economy by providing 161 jobs and contributed $19,289 in taxes to the State. By 1993 the number of sows per holding had increased to 70, with the average income after repayment of interest on working capital being $480 per month. Today the company has 7000 sows which averages out at 140 per shareholder, weaning 21-22 pigs/sow/year.
Approaching Nongwa it's obvious that this is no typical farm setup, as the farm entrance is part of a well kept garden area. The grass between the pig buildings was obviously cut frequently and smells were noticeably absent.
Pricing is still negotiated with CP and this is based on a 7kg 21 day old weaners, the rate currently standing at £3.75 per kg. Pigs are actually transferred at 30kg but a 7kg piglet is used for pricing as CP nationally runs two site systems, with weaners being transferred to its finisher units at a weight of 7kg. CP has had its own breeding pyramid for many years and it supplies F1 Large white/ Landrace gilts to the company on a regular basis, with all the gilts kept in a single gilt pool.
Prior to entering the company gilt pool they are held in a quarantine area just outside the village. The CP maiden gilts are PRRS –ve, however company breeding stock are +ve, so maiden gilts are "bugged up" by being mixed with cull sows. Gilts are inseminated with Duroc semen and then moved to individual farmers' units. Duroc semen is used on the sows and hence all the slaughter pigs are 50 per cent Duroc.
FMD vaccination is compulsory. The Thai government provides the vaccine which is administered by a CP vet hired by the company.
Chairat Ladwana is not a typical shareholder in that he has a big pig herd – 500 sows – and employs nine staff who live on the farm. He is the current Company chairman, has a degree in agriculture and used to be a CP employee and in fact became a shareholder by buying out an existing Company farmer. Ladwana commented that when the Company was first set up 36 years ago, biosecurity was not a problem, but it is today. His sentiments can be shared worldwide no doubt. Another major concern for the Company was that cull sow prices were very poor.
Mr Ladwana's data:
Pigs born alive / litter 12-13
Pigs weaned / sow/ year 23
Pregnant sows are all kept is stalls, which is typical in Asia. Tunnel ventilation is used with the incoming air passing over large pads which are kept wet, so that the air is cooled. The temperature in the sow house was 27-28C, although ideally it should be 25C. The unit operates on a three week batching system. The sows are protected at farrowing and supervised from 5am - 9pm. The pen floors are raised slightly above floor level and are made of a type of tribar steel slat. Despite the high temperature pig lamps are used along with boxed creeps, with creep feed being provided in small circular dishes. Manure accumulates on the floor under the crates but is frequently washed away, with the effluent ending up in sealed underground tanks. Many of the other pens have solid floors, which are also swilled down. This uses a substantial amount of water and this comes from a very large pit about 12m deep. The water table is quite high and so the pit keeps half full by seepage.
Using slurry to produce bio-gas is very common in Thailand, thanks to the hot climate. However, Ladwana's unit was very unusual in that each building had its own individual bio-gas plant, with the methane powering a special internal combustion engine, imported from Japan. The engine was connected directly via belts and pulleys to the huge piggery exhaust fans. Other engines powered generators providing electricity for the pig lamps. All in all, this gave a massive saving of 40 per cent in the electricity bill.
Having a 7000 sow pig unit run by 50 different manager/owners cannot be easy, but the model used by CP is quite intriguing and it would be interesting to know if they plan to do something similar in Vietnam, Cambodia or Laos, as CP already does business in these nearby countries. •
— By Norman Crabtree