Recently the Ministry of Finance has announced that they will grant subsidies to pig farmers based on the number of sows they are feeding. But Li Qing, an old pig-raiser, is not happy about it.

"I don't want these subsidies," she said bluntly. "Subsidies are not necessarily good. The new subsidy-granting policy will cause more and more people to raise sows. When there are more sows, isn't it possible that pork prices will greatly decrease?" Li fears that she may again lose money, as she did last year, due to considerable decline in pork prices.

It is certainly possible that pork prices will undergo a severe fall. Significantly, sixty five percent of Chinese pig farmers are not well organized. Without general supervision and proper arrangements, short-term interests, such as the proposed subsidies, could drive these farmers to swarm toward the pig-raising business. Indeed, the result would be excessive pork supplies, thus causing pork prices to decline and farmers to lose money. 

For more details, please read the full story in Chinese. (http://www.chinabusinesspost.net/showArticle.php?ID=9481)

(China.org.cn July 23, 2007)