The flu that made agribusiness stronger

By Isabelle Delforge*

Just a few days after authorities reluctantly recognised the existence of the avian flu in Thailand, deputy prime minister Somkid Jatusripitak vowed that the government would take steps to "turn the crisis into opportunity."[1] His words were echoed by Charoen Pokhpand Group (CP) chairman Dhanin Chearavanont, who asked people to stop arguing about the issue and instead, turn the crisis into opportunity. Adirek Sripratak, a top executive of CP, went even further saying that "changes resulting from the crisis would benefit the Thai chicken industry in the long term as well as help it recover from the current difficulties."[2]

And it could well happen that way. CP’s export-oriented industrial farming model might emerge much stronger in the aftermath of the epidemic.

CP’s chairman Dhanin maintained that closed farms were bird flu free, and that this was the safest way to produce chickens, arguing that in enclosed factory farms, chickens were completely isolated from the wild birds believed to be the carriers of the flu virus.[3] And the government followed the lead, launching a plan to modernise poultry farming and providing loans to small farmers to replace open farms with industrial poultry houses. The livestock department issued new standards requiring chicken raisers to register every chicken and to upgrade their farms. But, according to a farmer of Ban Chik, a village in Suphanburi province, it is very expensive to follow the new regulations. "We have to buy a big plastic net to cover our chicken houses, build an incinerator for the dead chickens and a special coop for the sick o­nes. We cannot afford it, we have to borrow money."[4]

Between 1000 to 2000 farmers in Nakhon Pathom and Suphan Buri have already given up their business because they had no money to upgrade their farms[5]. Authorities estimate that there are over 40,000 small and medium sized poultry farms nation-wide, mostly open air.

Moreover, o­nly farmers that have adopted the closed farm system are eligible for the compensation fund provided to buy new chicks after the epidemic.[6]

"We will be inspected two or three times to check if our farms comply with the new guidelines. o­nly then will we receive chickens for restocking that the government promised us by mid-May. But we are worried because we don’t really trust the government’s promises. We are also worried because they announced a new tax o­n chicken raising," explained the farmer.

Farmers were compensated for the chickens culled (40 baht per bird), but the restocking scheme approved by the cabinet in February has been held up by a disagreement between the chicken breeders who want to sell the chickens at 120 baht each and the agriculture minister Somsak Thepsuthin who is not ready to pay more than 100 baht.[7]

Even social programmes have been used to support the drive to industrialise chicken raising. Deputy Agriculture Minister Newin Chidchob announced that land belonging to the Agriculture Land Reform Office would be distributed to landless farmers in order to establish "chicken farming estates" under contract farming agreements with the Association of Poultry Entrepreneurs for Export. This measure is meant to help the export industry meet the massive shortage of poultry after the epidemic.[8]

However, contrary to what has been said by the industry leaders, chickens raised indoors have also been affected by the virus. In Vietnam, the current chicken flu outbreak infected a large closed farm owned by CP. o­n February 5, Vietnam News reported that "The army had been mobilised to kill 117,000 birds o­n the biggest farm in the (Ha Tay) province, owned by the Thai Charoen Pokphand Company, following a decision from the Ministry of the Environment and Natural Resources."[9]

In Thailand, a farm operator in Ang Thong quoted in the Bangkok Post disagreed with the idea of promoting closed-farm system. "Ms Chatamas had operated a closed-farm for five years and through her experience had found that the number of chickens which had died from avian flu in her closed farm was higher than those in open farms, due to lack of immunity."[10]

Veerapon Sopa, an organic farmer in Buriram raises about 100 chickens in the open, 40 ducks and a few geese. None of them got the bird flu even though some nearby farms were affected by the virus. He believes that healthy chickens living in open farms develop a strong immunity that helps them resist epidemics.[11]

Indoor chicken raising is not "avian flu free". When the epidemic was raging in Asia, avian flu infected at least two closed farms in Delaware, USA. As a consequence, China, Poland, Japan, Malaysia, Singapore and South Korea banned US poultry imports.[12] Industrial chicken farms in Belgium and The Netherlands also had their chicken flu scare last year.[13]

Even before the bird flu epidemics, industrial chicken raising in Thailand faced serious safety problems. In March 2002, health authorities in Europe found nitrofuran residues, an antibiotic forbidden in Europe for more than a decade, in chicken meat made in Thailand[14]. ^{This prompted the European Union to impose restrictions o­n Thai chicken for almost a year, seriously affecting CP and other poultry exporters.}

The social impact of such an aggressive move towards industrial farming will be devastating. Recent history has shown that fifty years of modernisation and intensification of food production systems in Thailand has not lifted farmers and workers out of poverty. Three state banks have agreed to offer a total of 25 million baht (US$631,880) in loans for poultry farmers to upgrade their farm. Because of the high investments required to build industrial farms (up to 10 million baht per farm or US$252,750), most small raisers will be wiped out.[15] In Thailand, most farmers are already heavily indebted. The Bank for Agriculture and Agricultural Co-operatives (BAAC) estimates that 20,000 farm borrowers, with outstanding loans of 3,6 billion baht (US$91 million US$), have been hit by the outbreak.[16]

Mr. Adirek, a top CP executive, said that the number of non-contracted farmers was likely to decrease after the Asian flu because of the need to increase quality standard.[17] At present, CP Group has about 10,000 contracted poultry farms. With contract farming, large companies control the whole production process: they lend money to the farmers, they sell them chicks, feed and medicine, and they have the right to buy the whole production. But usually the company is not committed to buy the chickens if the demand is low.

Contract farmers bear all the risks related to the production and become extremely dependant o­n demand from the world market. They become factory workers in their own field: the o­nly difference is that they have no company to take responsibility to secure their jobs, their social welfare, etc.

Mr Veerapon explained that many farmers are now dependant o­n CP.

"The company comes and makes wonderful promises to the farmers. In my village, they convinced many of us to start raising chicken for them. Then the exploitation comes. Farmers have to invest a lot of money at the beginning. There is a guaranteed price, but CP always finds a way to pay less, arguing that the farmers didn’t respect the standards, that the quality is not good, that the production is late. Contract farmers become very indebted, they sometimes have a 300,000 debt (US$7,500). Personally, I will never enter into a contract with CP. They destroy small farmers with false promises," he said.

Largely unchallenged by the Thai establishment, intensive animal raising has been under strong criticism in Europe and the United States where it has been implemented for decades. Attacks range from safety issues (heavy use of antibiotics and hormones in feed) and animal welfare concerns (high levels of stress in poultry houses) to environmental problems (heavy waste). Consumers find "industrial chicken" tasteless and are ready to pay more for "natural chickens" that are raised in the open and that grow at half the speed of the "industrial chicken".

But while CP’s production model is receiving unconditional support from the government, Thai civil society is discussing alternatives.

Disathat Rojanalak, an organic farmer at Nongjok Natural Farming Center near Bangkok says that in order to really guarantee the quality of the food, chicken should be raised in the open air. "But," he says, "small raisers need to take special measures to protect the birds against diseases, like the use of herbal medicines, micro organisms and better hygienic conditions." He also thinks that consumers should take responsibility for the crisis. "Very few people care about what they eat, the way food is produced and the broader impact it has o­n the society."[18]

On the other hand, many groups involved in sustainable agriculture also advocate the importance of diversified production systems to spread the risks of pests and financial losses.

Ms. Kulnipa Panton, president of the trade union at Centaco chicken processing factory in Rangsit/Bangkok said that workers want the government to respect and protect their right to form a union. "We also want more safety at work and better living conditions," she said. "For the chicken flu, I don’t know what the good policy would be. But the policy of closed farms is an anti-poor policy. With this government, the poor are always the victims and the capitalist gets a lot of support." The women workers of the union also want to know what’s happening in their own factory. "The manager never discloses information to the workers, we need to find out by ourselves."[19]