Breeding and feeding pigs in Australia and Vietnam

This report establishes that ACIAR Research Project AS2/1994/023, ‘Breeding and feeding pigs in Australia and Vietnam’ (supported by ACIAR from July 1995 to the end of 2000) has yielded an extraordinarily high rate of economic return on the funds invested. The collaborating agencies were the Department of Primary Industries, Queensland, James Cook University and The University of Queensland in Australia, and the Institute of Agricultural Sciences of South Vietnam in Vietnam. The best estimate benefit–cost ratio for investment in this project is at least 159:1 with a corresponding internal rate of return of 900% and a net present value of A$496 million. This is a total value, not an annual value. To give context to the number A$496 m, in 2000, 1.3 million tonnes of pig meat, worth A$2,323 million, was consumed in Vietnam in that year alone. The returns to the project are still significant even when the net present value up to, and including, 2001 is considered. While the breeding and the feeding components of the project had highly favourable levels of economic return, the relative economic returns for the genetic component are considerably higher than the nutrition component. In Vietnam, the project has enabled better quality (less fatty) pork to be produced, has resulted in more favourable feed-conversion ratios in pig husbandry and has reduced the number of sows needed to produce a given annual stock of pigs for slaughter. This is mostly a result of genetic improvements in the Vietnamese pig herd made possible by the import of Australian Yorkshire pigs (also known as Australian Large Whites) from Queensland. These pigs have several genetic advantages in the tropical climate of Vietnam. However, nutrition research has also added to these benefits. As a result of changes in the lysine/energy content of concentrated pig meal for fattening and finishing pigs, it has become possible to produce leaner pork more cost effectively in Vietnam. The new feed formula is being adopted by Vietnamese-owned millers of concentrated pig feed, and benefits should flow to Vietnamese pig farmers. In addition, in the near future, results from the nutrition research component of this project should enable Vietnamese-owned mills to produce concentrated feed for weaner pigs for the first time. To date, this production has been exclusive to foreign-owned mills. Because of the inadequacy of the data available, it was not possible to quantify the benefits to Australia from this project. They are, however, believed to be significant and are listed and discussed. It is pertinent to observe that this project has been very effective as an Australian foreign aid project. It has made possible substantial advances in pig husbandry in Vietnam, and Vietnam has obtained a high level of economic benefits from the project. The project has been well managed with an appropriate level of attention given to diffusion of economic results. With the nutrition component of the research, there has been effective follow-up and liaison with state farms and Vietnamese-owned produce mills to ensure adoption of the more cost-effective pig feed mixtures developed as a result of this research. The extremely high net benefits from the project result from the following factors. First, the genetic material transferred as a part of the research package, namely from Australian Yorkshire pigs of the herd of the Queensland Department of Primary Industries (QDPI), was most appropriate to Vietnamese tropical conditions and was capable of adding both to the quantity and quality of pig production in Vietnam. Second, the transfer of this genetic material was not on a commercial basis but essentially was an aid item. Third, the considerable costs involved in developing the pig herd of QDPI (now sold to private interests in Australia) was not assigned as a cost of this project. They were treated as a sunk cost because they had been incurred before the ACIAR project. Fourth, there was an extremely short lag or gestation period before the flow of benefits or results from this subcomponent in Vietnam. Benefits could be obtained almost immediately. Fifth, effective mechanisms were quickly put into place to help diffuse the superior genes. These included their adoption on state farms, and the construction or reconstruction of five regional artificial insemination (AI) centres and associated improvement in their facilities and the skills of their staff. The latter initiatives were supported by the Australian International Development Assistance Bureau (AusAID), but are not costed against ,the project since the AI centres have multiple uses and they remain as long-term assets for Vietnam.