China struggles to build cattle numbers in north-west

By Mark Godfrey

- Last updated on GMT

Related tags: Agriculture

China has announced ambitious plans to expand sheep and cattle breeding in the country’s sparsely populated north-westerly regions in order to meet the country’s growing demand for meat. But adding more cattle numbers in the provinces of Inner Mongolia, Shanxi and Xinjiang is not without major challenges – a big one being water.

With worries over pollution from slurry produced by new dairy, pig and beef fattening farms in the country’s crowded east coast, it appears that the government is getting more serious about encouraging breeding in the vast western hinterlands. On a trip to the region last week, deputy minister for agriculture Yu Xinrong called on cattle breeding stations and agricultural colleges to expand production of cattle and sheep.

Feed and water are both challenges in what the minister termed the "arid north-west". Yu told local officials in the sprawling province of Inner Mongolia – a large part of which is covered by the Gobi desert – that they should study new pricing regimes for agricultural water use. In recent months China has increased water tariffs for industry and agriculture in a bid to push conservation, while also increasing subsidies for new rural water piping and irrigation projects.

As for feed, Yu visited an alfalfa growing base trialling special varieties that consume minimum water. "Near the cities of Hohot and Linxian, the minister visited fields producing 500kg/mu (15 mu = 1 hectare) more than normal alfalfa varieties, while using less water,"​ explained a press release from the agricultural ministry.

Some of China’s most respected business media have reported that a lack of feed options has constrained a new wave of dairy and beef farms in China. The weekly Caijing magazine has frequently reported that low-quality feed had resulted in low yields from cows in multi-billion renminbi (RMB) projects, backed by venture capital firms seeking to cash in on China’s growing demand for beef and milk.

Indeed, all the language used by minister Yu suggests China’s government is nervous about major expansion of animal husbandry in the country’s less populous north-west. During his north-western trip Yu told officials to encourage expansion of animal husbandry in the region "in a sustainable manner… according to local conditions… to ensure the orderly use of local resources".

The challenges and potential of China’s north-west as a base for building up animal husbandry were also illustrated this week by the results from one of the region’s biggest agri firms, Xinjiang Western Animal Husbandry Co. The firm’s 2013 results showed the company’s revenues down 6.15% year on year to RMB451 million, with profits down 14.3% year on year to RMB27m.

The results were blamed on higher costs for feed and raw milk and higher distribution costs as the company – a cattle breeder as well as milk producer – sought to open up markets in the north-west of China, far from its base on the borders of central Asian states such as Kazakhstan and Kyrgyzstan.

The sheer ambition of Xinjiang Animal Husbandry, a subsidiary of the military-controlled Xinjiang Production and Construction Corps, is obvious in its plans to build six further farms with a total 21,000 head of cattle.

However, shortages of breeding cattle are another challenge to building a new wave of dairy farms in Xinjiang and other north-western regions, which could prove vital in boosting China’s cattle numbers and providing calves for fattening operations.

But in explaining why his firm had postponed the building of a new dairy breeding and milking farm in Xinjiang, Gao Lina, CEO of Hong Kong-listed Modern Animal Husbandry, said to local media: "Setting up a farm is easy and local governments are very supportive. But there’s still a shortage of cattle." 

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