Wetenschap - 10 september 2015

'Closed chains are the solution'

Albert Sikkema

Thousands of dairy and pig farmers demonstrated in Brussels this week against the low milk and meat prices. Wageningen UR sells milk and pigs too. For company manager Han Swinkels of the Pig Innovation Centre in Sterksel, low meat prices are not a big problem. His remedy: distinguish yourself with your market concepts.

Is your pig farm running at a loss?
We are not like standard pig farms. We are a research farm and only half of our turnover comes from sales of pigs; the other half comes from research projects. And the drop in research questions coming in is more of a problem for us that the drop in pig prices.

Why is that?
‘We’ve got a lot of long-term agreements with suppliers and buyers. We have farmed out the manure processing and we pay a fi xed price for the sale of manure. All our pigs are in VION Food Group’s Good Farming Star programme. They are sold to supermarkets with one welfare star. That adds value, compensating a bit for the falling prices. And we have fi xed agreements with our suppliers, which also creates a buffer for the falling prices.

What is the solution?
‘Pig farmers should distinguish themselves with market concepts, in closed chains so that they can make agreements with buyers about the profi t margin distribution. The organic pork chain is a good example. There the supply is in proportion to the demand, there is good collaboration with buyers, and the price is a lot better. Closed chains with long-term agreements are the solution. You have to regulate the supply as a chain, because if the supply is too big someone will have to bear the losses and at the moment that is the pig farmers.’

Then there is not much point in demonstrating in Brussels?
‘It draws attention to the problem. There is a surplus of pork in the EU and the EU cannot regulate that supply on an open market. Most lobbying organizations are not asking the government to intervene in that market, they are asking for tax cuts. Lower taxes can give them some space, but a better price would really get them somewhere. And those don’t just come out of the blue. It took the organic pork sector at least ten years to achieve a good market position.’