Pig Supply Chain Analysis for Improvement and Inclusiveness for Small-Scale Producers in Hanoi, Vietnam

Pig Supply Chain Analysis for Improvement and Inclusiveness for Small-Scale Producers in Hanoi, Vietnam

Published: 2020.05.25
Accepted: 2020.03.25
National Pingtung University of Science and Technology, Taiwan
National Pingtung University of Science and Technology, Taiwan


Hanoi is one of the top pig producers and consumers in Vietnam. However, pig is mainly produced by small-scale producers; the number of small-scale producers, including smallholder (under 30 porkers) and small-scale farms which are from 30 porkers to less than 100 porkers accounts for 97.91% of total producers; contribute 60.91% of the total pig population in Hanoi (Vietnam agro-census, 2016). Even though, large-scale farms seem to be an indispensable trend as the industry becomes more integrated, the large-scale farms are challenged by the vulnerability to outbreak of diseases and price shocks risks. Moreover, the current regulatory system is unable to help consumers distinguish pig production and pork product safety. The aim of this paper is to understand the small-scale producers (under 100 porkers) pig supply chain in Hanoi and suggest a recommendation for its improvement. Using government data and documentation, this research adapted the Rapid Appraisal approach to analyze the pig chain in Hanoi. To convey the issues of major concerns about food safety, it was recommended that creating inclusiveness for small-scale producers into the system through collective economic mechanisms such as product association, cooperatives were important first steps, and the government should create an enabling condition for enhancing the food safety management.

Keywords: Pig supply chain, smallholders, Hanoi


Vietnam ranks fifth in the world in terms of the total number of pigs and ranks sixth in terms of porker production. However, Vietnam's porker production is mainly for domestic consumption and export of pork (including porkers) is negligible. Hanoi is on the top list of both the largest pig production and high consumer demand in the country and ranks number two of largest pig producers, which accounts for 4.4% of 2,963 million producers in Vietnam (Vietnam agro-census, 2019). In particular, the total number of pigs raised in Hanoi reached over 1,589,000 pig heads, which ranks second of the largest number of pig in total 29.1 million pig of Vietnam, and 10,000 pig heads for consumption per day (K., K. Đ., 2016; Vietnam agro-census, 2016). However, the percentage of smallholder (with under 30 porkers) and small-scale farms (from 30-100 porkers) in Hanoi are bigger than medium-scale and large-scale farms. In Hanoi, the number of smallholder with less than 30 porkers accounts for 90.84% of the total producers; contributing 41.26% of the total pig population (Vietnam agro-census, 2016). However, the trend in the past few years has been shifted from small-scale to a larger scale. In particular, the number of smallholders in 2011 decreased sharply from 4,132 smallholders to 3,441 smallholders in 2016 (Vietnam agro-census, 2011 and 2016). It can be said that smallholders are less competitive than others are. There were near 1,000 smallholders that disappeared during the past five years from 2011 to 2016.

Regarding a large number of smallholders, the pig industry in Vietnam faces several forms of competition, which are considered disadvantageous. These are high production cost, environmental pollution, and food safety management (VN agriculture, 2007; VN agriculture 2019). Feed price is one of the reasons for the high production cost, regarding Mergenthaler et al., 2008, domestic feed prices in Vietnam are 10–20% higher than a regional one, due to low yields, high post-harvest losses, inconvenient transportation, and unfavorable tax regulations. For safety management, it comes from the slaughter process and logistics. First, the wastewater of livestock directly goes with domestic wastewater drain. Moreover, the slaughter is in the producer’s yard, on the floor. Then the meat will be delivered by motorbike to the local market (VN agriculture, 2007; VN agriculture 2019).

In this research, I assume owners of small-scale farms and smallholders are small-scale producers. The research question is “should owners of small-scale farms or smallholders continuously develop together with others? If yes, what are the solutions for these small-scale producers?” This research will provide an overview of the pork industry in Hanoi to identify and analyze the pig value chain in Hanoi for improvement and inclusiveness for small-scale producers.


Regarding production volume and economic value, pig raising is the largest sub-sector in Vietnam, followed by poultry (Dinh, 2017). Besides, pork accounted for about 74 % of total meat in Vietnam in 2012 (Agro-census). In the past, pig producers are classified into two types, which are commercial farms and smallholders, the commercial farm is made up of a breeding producer with above 20 sows or fattening pigs with more than 100 pig per batch (Dinh, 2017). In contrast, there are four types of pig producers in Vietnam — smallholders or backyard producers with 1-30 pigs, small-scale farms with 5-20 sows or 30-100 fattening, medium with 20-500 sows or 100-4,000 fattening, and large with more than 500 sows or 4,000 fattening pigs (Lapar, 2014).

In 2011, the Vietnam government defined a commercial farm as one with a profit of over 1 billion VND[1], thus there are two possible cases here, and one is a commercial farm the profit of which is solely from the sale of more than 500 pigs. The other is commercial mix farms, and the number of pigs sold is less than 500 but the total profit in a year includes other products is greater than 1 billion. In this paper, the classification of pig farms is based on either the “number of fattener pigs” or “number of sows.” It means that the commercial pig farm is equivalent to fattening pig of more than 500 sold in a year.

Along the supply chain, pigs are produced as piglets, weaner/ growers/ porkers and pig fatteners, slaughter pigs, pig meat/pork (all types), offal, and processed pork products. The piglets normally weigh from 10–15 kg at 40–45 days old (Nga, Ninh, Van Hung, & Lapar, 2014). Growers usually weigh from 20–35 kg at 70–80 days old (Nga et al., 2014) and finished pig/ pork weigh 80-130kg.

Porker is transformed into meat after slaughtering process, and both pig meat and offal are edible products for human consumption (Nga et al., 2014). Pork can be frozen meat (store at -18°C or below), chilled meat (0 - 4°C), warm meat or processed pork products depending on how it is used. In this paper, the flow of pigs and pig products along the supply chain is described in the district and particular supply chain.


The data uses secondary data from General Statistics Office of Vietnam, adapts with Rapid Appraisal Methods (World Bank). Yearly, General Statistics Office of Vietnam (GSO) together with Ministry of Agriculture and Rural Development MARD collect data about the total number of pigs, piglets, porkers, breeding boars and sows in April and one time in five years they collect the data of smallholders in July. The full dataset consists of around 17 million households of 79,898 villages in Vietnam and we used the subset of the 120,232 of small-scale pig producers in Hanoi in July 2016 as the sampling frame. Regarding the Vietnam agro-census, April 2016, there are almost 2.96 million pig producers in Vietnam and Hanoi ranks second of the biggest number producers list in the country. Twelve samples in each village were selected randomly from the list of farmers in the sampling frame on an excel file. The random samples were selected through the following formulation (Vietnam agro-census):

(1) Select the first sample from the list:

Number of the first sample on list = RANDBETWEEN (1, number of smallholder)

Space of each samples = total smallholder/ 12

(2) Generate the 11 remaining samples:

Sample (n+1) = n * space of each sample + number of the first sample on list

The questionnaire includes general information such as “name”, “address”, “education” and other detailed information such as “how many cows, buffalos, chickens, and pigs do you have?”; “the number of pigs, pork, porkers, and breeding pigs that are available on 1st July 2016” (Vietnam agro-census).

In addition, the mapping of the value chain is done by Rapid Appraisal Methods (of World Bank), which is a timely and cost-effective approach with five key rapid data collection methods such as informant interviews, focus group discussions, group interviews, structured observations, and informal surveys (Kumar K., World Bank).


Overview of the pig supply chain in Hanoi

From 2010 to 2013, the number of pigs in Hanoi decreased slightly from 1.625 million pig heads to 1.38 million heads. From 2013 to 2016, the number of pigs in Hanoi increased gradually, and reached 1.589 million heads in 2017. After the period of excess crisis in 2016, although the number of pigs in the country has been reduced sharply in 2017, but the number of pigs in Hanoi remained stable. The reasons are due to the psychology of livestock farmers waiting for the increase in pork prices to compensate for their losses and that demand for pork consumption increases as prices fall, so farmers in Hanoi still have market for their products.

Dividing by purpose of raising, in 2017, Hanoi has a total pig population around 1.6 million pig heads, of which the porkers are about 1.4 million pig heads, the sows are 0.18 million pig heads and the breeding boars are around 2,600 pig heads (GSO, 2017). In figure 1, the pork production in Hanoi from 2010 to 2017 ranged from 250,000 tons/year to 300,000 tons/year. The decline in meat yields in 2014, from 299,000 tons in 2013 to 247,000 tons in 2014, is due to the impact of the disease situation, which became serious in 2013. In the period 2014-2017, although the output of pork in Hanoi increased gradually but only reached about 270,000 tons per year as consumers have moved from pork to alternative meat products, especially chicken and beef (K., K. Đ., 2016). Consumption behavior has changed due to either pig diseases in the period from 2006 to 2013, especially PRRS (Porcine Reproductive and Respiratory Syndrome) or the highly concern about food safety (K., K. Đ., 2016).

Regarding figure 2, the 90.84% of total producers in Hanoi is considered smallholders but only get 41.26% of total number of pig heads; on the other hand, the large farm scale owners with over 500 pigs have only 0.35% of total producers but accounts for 24.46% in total number of pigs.

Mapping of pig supply chain in Hanoi

Within the framework, actors involved in the pig supply chain in Hanoi are described in the form of linkage and scale, as follows:

Breeding farms: The breeding pig farms are the individual breeding pig farms or domestic enterprises, FDI enterprises. In addition, some domestic breeding farms work as an out-sourced for breeding companies.

Breeding companies: They are domestic or foreign companies (FDI), which import and produce breeding pigs, commercial breeding farms or outsource commercial piglet production.

Livestock feed companies: They are domestic or foreign companies (FDI), which supply animal feeds to porker or breeding pig raising establishments, and business agents of agricultural materials.

Veterinary drug companies: They are domestic or foreign companies (FDI), which sell animal feeds at wholesale prices to porker and breeding pig producers, and agricultural material business agents.

Animal feed and veterinary agents: These are agents specializing in selling of animal feeds and veterinary drugs to livestock establishments at retail prices.

Smallholders: They include livestock establishments with less than 30 pigs. It is around 80-90% of the pig heads, which is sold to local traders. It means that all that volume is delivered to traditional markets (local market). Then there is only 10-20% of total pig head is supplied to semi-industrial slaughters. And there are three customers of industrial slaughter: wholesales market, modern retailer and local markets.

Small-scale farms: These are livestock farms from 30 to 100 porkers. They may be members of cooperatives, farmer groups or not (non-linkage).

Medium-scale farms with more than 100 porkers to less than 500 porkers: These are pig farms with a scale ranging from 100 porkers to 500 porkers or more than 300 breeding pigs. These include farms that meet the criteria of "farm scale" according to the Ministry of Agriculture and Rural Development (MARD)..

Industry-scale farm or large-scale farm with more than 300 sows or more than 500 porkers: They have characteristics of using imported breeds, industrial feeds, and good implementation of animal disease prevention. Often these large-scale pig production establishments are mainly involved in market linkages with large companies specializing in livestock feeds such as CP Livestock Joint Stock Company, Deheus Company. Trading company is priority buyer of large-scale farm, around 85-90% of total pig heads with mouth contracting at the beginning.

Traders: They are those who buy live pigs or carcass from producers, they can be district traders, inter-district traders or inter-provincial traders.

Cooperatives: They are the cooperatives producing, trading piglets and porkers; operating according to the Cooperative Law "a cooperative is a collective economic organization, co-ownership, has the legal entity status, which is established voluntarily by at least seven members to coordinate, and support each other in the production, to create jobs in order to meet the mutual needs of the members, on the basis of self-control, self-responsibility, equality and democracy in the management of cooperatives".

Slaughter companies or industrial slaughters: They are domestic or foreign companies that purchase porkers from livestock farms; directly slaughtering, processing or hiring another slaughtering agency and selling pork as well as processed pork products.

Illegal slaughters, traditional slaughter, or small-scale slaughters: They butcher poker at smallholders’ house with less than 10 porkers per times, without a slaughtering permit of the Government.

Slaughter distribution or semi industrial slaughter: They adapt the standards of slaughter of MARD and the Government's regulations on veterinary hygiene conditions for large-scale pig slaughterhouse[1]; they can be semi-industrial or traditional slaughterhouses or modern industrial slaughtering in large-scale. Modern industrial slaughtering meets the standards of MARD and the Government's regulations on veterinary hygiene conditions for pig slaughterhouses, cold storages, and slaughtering by hanging lines.

Along the supply chain of pig in Hanoi, there are several products, such as:

Pigs: In the pig value chain, porkers are the products that are raised and fattened from commercial piglets by the farmer. After about 20 weeks of raising and fattening, the average live weight of a live porker reaches 100-125 kg, which is the average weight of a live porker for sale.

Commercial piglets: Commercial piglets are traded for large-scale and fattening after 3 weeks (about 20 days) to 8-12 kg.

Carcass: It is the porker left after slaughtering and, removal of hair, water, and wastes, porker is either pork meat or internal organs, which are used as food. The rate of pork carcass compared to porkers in slaughterhouses is usually 65 to 80% depending on the variety and feeding process.

Pork: They are part of the carcass, which will dissect it into many pieces with different names such as loin, shoulder, belly, ribs, and ham and shank, excludes offal.

Chilled meat: they are pork meat, which, after slaughtering, will be stored in cool condition before shipping to retailers and consumers (0 - 4°C).

Frozen meat: it is pork after being slaughtered then it will be frozen and put in cold storage (–18°C or lower). Frozen meat is sold in supermarkets and modern food stores.

Processing food of pork: they are processed food made from pork such as ham, sausage, brawn.

Non-linked smallholders the pig supply chain assessment

Products: live pigs, carcass, offal, blood, pork, and processing food of pork.

Description of the products along the supply chain: The breeding facilities of this chain often buy inputs such as feeds, piglets, and veterinary drugs at the retailers or local shops. Feed price at the retailer or local shop equal input cost plus profits, the profit of retailer or local shop accounts around 11.11% of input cost (CAP/IPSARD, 2016).

Usually, smallholders in Hanoi buy feeds at prices 10% higher than the direct purchase price from wholesaler, thus, even smallholder can use food waste from local restaurant or center kitchen but the feed cost is from 56%-70% of total cost (Tran, 2014) . For example, if the price of feeds at the second agent is 25,000VND/kg, the price of the company will be 22,500VND/kg. In recent years, prices of feeds and vaccines have fluctuated or decreased slightly in the short term, but tend to increase in the last few years. Farmers either produce the piglets by themselves or buy from various sources, such as small-scale farms. Piglets normally weigh from 10 to 15 kg around seven weeks. Smallholders use waste food so they have high feed conversion ratios and low livestock productivity, low carcass rates and higher feed prices than commercial pig farms, which resulted in lower returns per head.

The small-scale trader in this supply chain is trader-cum-slaughterer (trader combined with slaughterer). They are the ones who decide the price of pigs and they get the reference from CP Company. After reaching an agreement with the smallholders, there are two possible circumstances. A usual circumstance is that the number of slaughtered pigs is under 10 pigs at a time, they slaughtered pig at farmer’s house at midnight, from 2 am to 4 am. In another circumstance, they take the pigs in the afternoon and are transported to slaughterhouses that the trader-cum-slaughterer pay the fee for, about 30,000VND/pig in the afternoon, then the pigs are slaughtered at slaughterhouse. Slaughterer-cum-trader sells the whole slaughter pigs or sells types of meat, blood, offal for traditional retailers, center kitchens. The carcass is delivered by motorbike to traditional retailers.

The price of pork depends on not only the type of pork (head meat, shoulder meat, loin, bacon, leg and ham, etc.) but also the location of the local market. Normally the retailers set the price according to preference of the consumers, especially the bacon, shoulder meat, and rib. Others mostly are sold to center kitchens or food processing shop. The selling price to consumers is usually higher than the purchase price of retailers from 12,000-20,000VND/kg.

The non-linked smallholder is a producer, which has almost no relationship or activities linking with other producers. They together attend the training of the Government, but the linkage and exchange of information in this supply chain is very weak, especially in the production stage. They have no direction in production, exchange of experiences to improve the production process, no investments, and no voice in deciding the price of the product or input price. Smallholder with less than 30 porkers still plays a major role in the livestock sector in contributing 41.26% of the total pig population. The positivity of smallholder is to take advantage of labor, land, and waste-food; however, less capital and no technology invested. According to the Hanoi Department of Agriculture and Rural Development, small-scale producer supplies around 40% for the Hanoi market and nearly 70% of the warm meats market, and the large-scale commercial production have provided only over 15% of meat for consumption (according to the Vietnam Agriculture and Rural Development Census). In 2016, there were 120,232 smallholders, created jobs for 721 regular workers and for nearly 800 seasonal workers; it has become the main source of income for local people with an average income of 964,000VND* per person.

Non-linked small-scale farm pig supply chain assessment

Products: pig, carcass, offal, blood, pig meat, and processing food of pork.

Description of the product along supply chain: small-scale farm is also quite popular; typically, these facilities usually combine pig production in the V.A.C model with fish, poultry, and fruit orchards. The small-scale farm sells to local trader, agricultural cooperative or a company. With the price reaching a peak in June 2018 at 55,000 VND*/kg live weight, the profit of a pig farm is approximately 2 million to 2.8 million VND/pig. The buyer determines the price of pig or carcass. For local traders, after reaching an agreement, there are two circumstances, which is the same situation with smallholder case above. These traders are also the ones who decide the selling price for wholesalers and center kitchens.

The difficulties faced by these farmers are the lack of capital to expand production, access to preferential loans, and buying food agents with cash immediately. Without contract farming, the price depends on the traders. In addition, these farmers have varied sources of income, such as fruits cultivation and livestock, including pig, fish, chicken, or duck. Because of risk concern, these farmers do not want to invest their money to upgrade the number of pig.

Overview of Government support in the pig industry

On January 16, 2008, the Prime Minister issued Decision No. 10/2008 / QD-TTg approving the strategy for livestock development to 2020. The Decision indicated that pig production should rapidly develop the scale in the direction of farms and industries where they have preferable land conditions, fresh water sources, and ecological environment. Especially, medium and large enterprises in breeding, slaughtering, preserving, and industrial processing need to develop immediately and suitably to the market.

To achieve the goal of improving efficiency and competitiveness, there should be an increase in productivity, quality and added value, consumers' needs and tastes, and sustainable development. In May 2014, the Ministry of Agriculture and Rural Development (MARD) issued Decision 984 / QD-BNN-CN approved the project "Livestock re-structuring in the direction of enhancing added value and sustainable development.” The restructuring of the value chain was most notable. Enterprises play a central role in linking production organizations, cooperative groups, associations, and business associations and branding to organize the link between the production chain and the market. Furthermore, the decision also clearly oriented animal husbandry restructures by region, kind of livestock and way of breeding. Moreover, the policy in Pig industry can be divided by “direct policy support for farmers” and “policy support for others sectors,” such as prevention of disease policy, Pork price stabilization policy through retail price, the model of linking farmers - enterprises - market support policy, etc.

Policy support to prevent disease: In order to provide direct support to livestock producers in the prevention of foot-and-mouth disease and blue-ear disease through the Decision No. 719 / QD-TTg dated 5 June 2008 of the Prime Minister (Vietnam Government postal, 2008). The application of farmers should show that the number of pigs infected with the disease must be accounted to 70% of the total value of pig farm, then that farmer will receive financial support of 25,000VND[2] per one kg of pig dead (Vietnam Government postal, 2008). Following this policy, Chu – director of Department of Agriculture and Rural (DARD) of Hanoi said that DARD of Hanoi funded 620 billion VND* to support pig farms affected by African swine fever virus disease (Chu, 2019).

Credit policy: Decision No. 23/2017 / QD-TTg amended and supplemented a number of articles of Decision No. 246/2006 / QD-TTg on the establishment of the Cooperative Development Assistance Fund and promulgating the Regulation on credit guarantee and support activities Post-investment interest subsidy of the Development Assistance Fund. According to this Decision, the loan projects are evaluated by the Funds for repaying in accordance with the conditions for the Credit Guarantee Fund to provide loans; In the case of post-investment interest rate support, at the interest rate regulated in Article 24, Chapter III "The maximum post-investment support interest rate of the Fund for co-operatives and unions of cooperatives shall be equal to the gap between the commercial lending rate and the preferential loan interest rate of the Fund. Commercial loan rates are determined on the basis of the lowest loan interest rates in the medium and long term loan interest rates for normal business sector of state commercial banks (state owned 100% of charter capital) and joint stock commercial banks (state owned more than 50% of charter capital) announced periodically by the State Bank of Vietnam.

Policy to improve the efficiency of small farm and smallholders in 2015-2020: In order to improve the efficiency of smallholder production and environmental protection, the Prime Minister issued Decision 50/2014 / QD-TTg dated 4 September 2014. There are two objects, which will get benefit from a number of support policies for artificial insemination, breeding and waste treatmentregarding this decision, such as “(1) Households directly engaged in raising pigs, buffaloes, cows, and poultry, except for those engaged in outsourcing of the enterprise (hereinafter referred to as breeding households) and (2) people providing artificial breeding services for cattle” (Vietnam Government postal, 2014). The producer needs to apply for the registration form that is stamped by Commune People's Committee at the Economic Department of district. And the supported level for pig producer to buy breeding male is 5 million/head with maximum 3 heads per household. The maximum support for waste treatment is 5 million VND/smallhoulder and the requirement is that the smallhoulder directly raise under 05 sows or 10 meat pigs, or 03 buffaloes/cows, or 200 poultry reproductive, and equivalent.

Science and technology policy: In order to improve product quality and food hygiene and safety, the Ministry of Agriculture and Rural Development (MARD) has issued good practices for safe pig raising, such as Decision 1506 / QD-BNN-KHCN issued on 15 May 2008 and Decision 1947 / QD-BNN-CN on the process of good husbandry practice for safe pig raising in the smallholder. The decisions set out a full production process from the choice of site, the way to build and design the breeding facilities, the management of breeding stock, feed, drinking water, blanket hygiene farming and disease management.

Breeding stock management is a very important part of the production process. Regarding the importance of this issue, the Ministry of Agriculture and Rural Development has also promulgated specific regulations on the management and use of breeds through Decision 07/2005 / QD-BNN dated January 31, 2005 on the management and use of male breeding hog, Circular No. 31/2013 / TT-BNNPTNT dated 12 June 2013 on national technical standards on breed testing.


Although small-scale producers is currently facing many difficulties and challenges: environmental pollution; there are no sufficient resources to participate in vertical linkages between material supply, processing and marketing but they have strong recovery after the crisis compared to those of large-scale pig production. Therefore, some proposed recommendations to help promote the development of sustainable pig industry towards a comprehensive growth, including:

Production quality: The production should be produced following VietGAP standards and should focus on premium quality such as organic pork, biological pigs feeding, etc. to meet the demand of customer’s food safety requirement.

Enhance efficiency of domestic enterprise sectors: Improving the capacity of domestic feed companies together with productivity and quality as well as raising the ability to supply feed ingredients in the country will reduce the input cost.

Create linkages among producers and form farmer groups or cooperatives with collecting points or distribution: The establishment of groups and cooperatives to increase the total size of groups over 500 pigs that help members access to input supplies companies at lower around 10% prices than retail prices at agents. In addition, each farmer group or cooperative has a collecting point or distribution, which increases the environmental solution for waste management.

Create linkages among actors in the entire pig and pork value chain in Hanoi: The Monitoring and Information Management System of Pig should be established. Accordingly, small producers can exchange information including price, the number of piglets as well as technical skill. Traders and slaughters also can send pre-order or order to producer leaders. Creating “microloan” program for smallholders who have strong linkages and supporting from enterprise sectors along supply chain.


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[1] Circular No. 60/2010/TT-BNNPTNT on veterinary hygiene conditions for pig slaughterhouses; Circular No. 05/LB-TT "Guiding the conditions of slaughter, trading and transport of pigs, cattle” and Decree 66/2016/NĐ-CP

[2] Exchange Rates 1USD= 23,350VND, 22nd of June 2019, Vietcombank-Vietnam

[3] Exchange Rates 1USD= 16,617VND, 22nd of June 2008, Vietcombank-Vietnam