Chinese officials convicted of pig subsidy fraud

A court in the province of Shaanxi sentenced Zhu Mou to one-and-a-half years in jail for “abuse of power” and misappropriating almost RMB1 million in public funds.

Zhu headed up the local office of the Livestock and Poultry Slaughter Supervision Office in Liquan County, a pig farming region over two hours’ drive from the historic city of Xi’an in the westerly region of Shaanxi. Another official in the same bureau, Zhang Mou, was found to have published false data on pig slaughtering numbers, but wasn’t jailed.

In what is being termed by government as a first for China, the conviction casts a light over a system in the country whereby slaughterhouses are paid subsidies to slaughter and dispose of sick pigs.

Dead pigs​

China has tried to get farmers to report and dispose of diseased pigs in a formal manner by paying them compensation to take the animals to officially-designated disposal sites and crematoria. Previously large quantities of pigs were thrown into local rivers, but that practice was spotlighted by the discovery of hundreds of dead pigs in the Huangpu River flowing through Shanghai.

China has long offered subsidies to pig breeders as well as processors to improve breeding and modernise meat companies. However fraud is widespread, says industry figures.

Slaughterhouses are over-stating the numbers of pigs actually slaughtered in order to claim larger subsidies for new plants and for storing government intervention stocks, explained an executive at one of China’s largest pig breeding and genetics companies. He also explained how collusion is common among large pig breeders and local officials: “There have been many cases of factories over-stating their inventories. And local governments over-state their sow numbers to get more money from central government.”​

Tightening supply​

Pork sales have been hurt in recent years by several high-profile cases of ill and even dead pigs finding their way into the food chain. Illegal use of sick and dead pigs tends to rise in China when pig prices tighten. Pig and pork prices have risen in China this year due to tightening supply.

The Shaanxi case follows an investigation which began in June following a tip-off to local police. China has been clamping down on official corruption, but the agricultural sector has featured less in the campaign compared to the infrastructure and real estate sectors where officials have frequently been jailed for taking bribes in return for licences and approvals.

The convictions in Shaanxi also illustrate how a complex series of agencies compete to police China’s livestock and meat processing industry, including the Animal Husbandry and Veterinary Office and the local department of agriculture as well as the recently reformed China Food & Drug Administration.