Swine industry in Kelantan

Before readers, PAS members, and extremists start labeling me as anti-Islam, or trying to mock Islam, let me categorically state that I have no intention whatsoever to mock your religion, your beliefs, as well as to insult anybody. The reason why I brought this up is to propose to the Kelantan PAS government the potential to create a source of economic revenue, create jobs which are higher up the value chain, as well as re-cast the entire image of PAS not only in the eyes of Malaysians (especially non-Muslims), but also internationally. I would also like to state that this post is strictly my personal view and not my party's stand. I am not an economist, so my apologies if my take on certain things in this post is errorneous.

Pig, or swine, farming in Malaysia has traditionally been to fulfill mostly local consumption needs, with some exports to Singapore (before the Nipah virus outbreak in 1998). According to some statistics collected by the Perak Department of Veterinary Services, Negeri Sembilan used to have the largest number of pigs until 1998 when the entire industry in that state was wiped out. From then on, Perak has been consistently the largest producer of pork in the country. Total pig population in 2005 stands at 1.45 million, with Kelantan having only 450,000. What is interesting as well is that the majority (~60%) of pigs in 2006 are farmed in farms of sizes between 500-5000 pigs each, with only 18.8% farmed in >10,000 size farms. The number of farms in the 500-5000 pig population forms 73% of the total number of pig farms in the peninsula. Kelantan has no commercial-scale farms to speak of, having 95 backyard farms.

The Malaysian swine industry has always been having a less than favourable reputation. Issues such as environmental pollution, hygiene, health, disease, social, and more recently the use of banned growth enhancers, have plagued the industry for years. As far as I could remember (readers who are more informed on this issue, please correct me if I am wrong), the government has not been actively involved in monitoring and regulating the industry, let alone encouraging its growth. What has been more common, as in the case of Melaka, was in restricting the scale of the pig farms, placing very rigid conditions for continual operation, as well as closing down farms with the pretext of moving them to a special area. Perhaps the inability, or lack of incentives, to enlarge and modernize these pig farms is the main cause on why pig production levels in Malaysia is well below other pig producing countries in the region, as well as having a high production cost coupled with significantly lower quality pork.

However, if one is to look at the world's consumption pattern of meat according to a report, pork is the most consumed meat compared to any other. Although facing pressure from poultry, pork consumption is expected to rise due to improved efficieny in pork production, lower cost, as well as higher quality products. Although being the world's largest pork producer, China imports a substantial amount of pork from the EU, mainly in the form of specialized meat or byproducts. With the ascension of China into the WTO, tariffs on imported meat will fall encouraging more competitive pricing for imported pork and pork products. Moreover, with the growing affluence of China's urban population, demand for more pork products other than the traditional muscle is expected to grow. Exports of such products into China will be able to fulfill the demand since 80% of China's pork production is confined to small family operations mainly concerned with self-consumption. Even if pork imports is only about 2-3% of China's domestic consumption, when you consider a population of 1.3bil that percentage translates to some 26-39mil consumer base. This is an export potential which Malaysia could seize, especially if we take shipping distance into consideration (Malaysia is so much nearer to China compared to the EU or Americas).

Considering the potential of pork product export as well as the various production and social issues faced by pig farmers in almost all the states in Malaysia (specifically in the peninsula), the Kelantan PAS government should seriously consider bucking the trend to seize the opportunity, and set up a major pork production area which will set new standards in production cost and quality. The relatively low labour cost in the state is also a plus point towards lowering the production cost.

For a business plan to have a higher chance of success, minimizing threats is required, and it is due to this that proposing any other kind of livestocks would not be that viable. The BN state governments would easily be able to compete in the farming of other livestocks and Kelantan would be hard pressed to differentiate itself enough to attract investors. Therefore, choosing a livestock which is totally unexpected by the other competing BN states, and one which has high export potential, makes economical sense. A few key things to differentiate this area from the rest, and to ensure that current issues plaguing the industry could be resolved or prevented, will be to ensure the following:

- Large (>10,000 pigs) farms. Considering that most farms in Malaysia are small, a focus on larger farms will attract serious big players as well as reduce overall per pig production cost (economy of scale). This is also to avoid competing with the other states for farms of the size of less than 10,000 which forms the majority of farms in the peninsula.
- Farming facilities are modern and uses latest farming and veterinary technology, ensuring hygienic conditions and minimizing disease outbreak, increasing productivity level, as well as producing higher quality pork.
- Centralized, efficient, and effective waste treatment facilities for the entire area to prevent the usual problems of environmental pollution.
- Vertically integrated with dedicated feed mills, genetic selection instead of relying on imported breeding pigs, breeding units, veterinary care and research center, slaughter centers (humane processes), as well as packaging centers. This could also include other pork meat processing centers to product meat byproducts.
- Efficient and effective logistics and supply chain infrastructure to make it easy for products from the area to be distributed and exported.

Considering the amount of activities that would be required to make the above area a reality, one could see the economic potential for Kelantan. It will create jobs, create projects which could go to the local companies, attract investment, as well as carving a niche and name for Kelantan itself for an industry which the other states in Malaysia seem to want to discard. Bear in mind that when PAS came to power in Terengganu in 1999, the state government under Datuk Seri Hadi Awang actually lifted a 10 year ban on pig farming in that state. Granted that nothing much has happened since the lifting, such a suggestion to the Kelantan PAS government to seriously look into this industry with big export potential should not be seen as against the party's ideology. In fact, the one advantage I see the Kelantan PAS government gaining from adopting such a proposal will be in politics.

By creating a potentially large and profitable industry which benefits the state and its people, albeit an industry which is considered to be not inline with its religious ideology, PAS would have shown Malaysians, especially non-Muslims, and international watchers, that it is not the extremist and Talibanistic party which is usually in the mind of people. It will also show to the people that they are fully capable of implementing economic policies for the greater good of people regardless of race and religion, as well as potentially attracting foreign investments of other kinds in the longer run. The Kelantan PAS government would have a chance to prove the BN wrong that they are incapable of bringing economic progress to the state. Of course, Umno would then try to paint PAS as being "un-Islamic" in doing such a thing, but I think PAS would have no difficulty rebutting them.

PAS has been trying hard to repackage and reshape themselves to win more votes, but the most effective manner to do that would be to do something which is perceived as totally in opposite of their ideology. As they always say, actions speak louder than words. Their leaders have shown that they could walk-the-talk in their lifestyles by not living in grand official residences, which is by and large commended and respected by most people. Now they could also show that they can be practical in economic development as well. The Kelantan PAS government has an Economic Planning committee headed by Husam Musa which thus far have managed to bring in a China company in a JV to mine gold in Sokor, Tanah Merah. Perhaps they could also seek experts from China in development of modern pig farms or vertically integrated pork production facilities to kick start such a project, as well as to have good management and oversight over the entire development and running to ensure its success. With little or no help from the BN federal government, the Kelantan PAS government really have to think-out-of-the-box to bring better economic progress to the state, and that would mean serious consideration of any ideas, no matter how outrageous at first glance.

Note: The position regarding pig farming, albeit in a different manner, has been taken by Barisan Alternatif in 1999 in response to the Nipah virus tragedy that struck down the Negeri Sembilan pig farming industry. The press release concerning the tragedy specifically mentioned how PAS views the issue, as well as pig farming in general.