Against the background of the fact that framework is being tightened ever more for pig keepers and that slaughter businesses get ever more centred, Mrs Renate Kühlcke in her capacity as the Fleischwirtschaft trade magazine’s editor-in-chief held a dialogue with ISN’s chairman Franz Meyer zu Holte in October. This dialogue was published as the Interview of the Month in the Fleischwirtschaft 10/2005 edition.

The German pig industry is going to effectuate another production record this year without having the producer prices losing from it. So, where’s the secret of success behind it?

With regard to this issue, we need to definitely differentiate the slaughter industry and the pig producers’ business from each other. It is quite right to assume that the slaughter industry gained market shares mostly from the EU eastward enlargement. For the pig keepers, this certainly means an important positive development. As far as this year is concerned, an average pig price of EU 1.40 to 1.42 per kg slaughter weight is being forecasted by ZMP. Given a price level like that we would, on the whole, be getting along for quite some years. However, such price level will not be sufficient for compensating for the past years’ losses.

Over the past years, the political framework proved to be disastrous for the pig keepers, because so many restrictions were imposed on us by the red-green Federal Government as well as by the green Ministers of Agriculture. You will find this most obvious if you look at the huge slowdown in investment which currently prevails among pig keepers. So, we’d rather not speak of kind of a secret of success if we talk about the pig keepers’ situation.

Would you regard this latest economic success to be an indication for the pig keepers’ being well prepared for international competition?

I do, by all means. Top quality has been produced by German pig keepers since long ago. We do not need to hide away behind the Dutch or Danes with regard to performance in pig fattening and piglet production. But – to be honest – we must not deny the fact that some of the farms where pigs are held today will be off the market in future.

The entrepreneurial pig feeders only – such as you find in north-west Germany, for instance – will be able to earn money in pig feeding in the future as well. It is absolutely vital for this purpose, however, that above all the Federal Government strongly supports pork export opportunities to China and other countries. The red-green government completely failed in this field.

Germany has now been found appropriate as a production site by the neighbouring countries. Do you fear you will have to compete much more with the Danish and Dutch pig feeders? Or would you rather say there are common problems to solve?

At present, Danish pig feeders run about 100 000 fattening places throughout Germany, tending upwards. But these were mostly fattening capacities which already existed and were then taken over by the Danes. These are no problem for us. But for some pig feeders in some economically underdeveloped regions in southern Germany, for instance, the low-priced high-quality piglets from Denmark produce a real threat meanwhile.

On the EU level, we do aim at quite the same things as do the Danish and Dutch pig feeders. We have been agreeing regularly on issues for some years now on which we might fight jointly to arrive at fair competitive conditions within the EU. A word for word conversion of the Pig Keeping Decree as well as standard transportation rules may be regarded to be a permanent issue.

How do you evaluate the meat processing industry’s getting ever more centred? At least, almost every second German pig is being slaughtered by the three most important groups of companies.>

This is kind of a development which we look at with growing concern. The large slaughter companies’ economic power has increased to an enormous extent over the past years. The Vion Food Group’s supremacy – observed in southern and eastern Germany above all, where Vion will be slaughtering near to every second pig in future – is very burdensome for the pig feeders. Given such situation, no more alternatives are left for marketing which would however be required to allow for fair pricing.

In order to improve market transparency in support of the pig feeders, the ISN publishes a weekly pig price comparison for its members of German pig prices on the one hand and of European pig prices on the other. At the end of this year, we will also be publishing a comparison of slaughterhouses in order to farther strengthen the pig feeders’ position.

Despite a positive basic atmosphere among them, the producers and processors mistrust each other. The ISN complains about cover-up tactics such as chaotic masks and methods of classification. But with regard to the economic success of the pig feeders, is complaining about a lack of market transparency still a reasonable thing to do?

It definitely is. It was only last Friday that we had to learn what the slaughter industry means by talking about cooperating in partnership with the producers. They had only recently conjured to do so on the occasion of the Pig Trade Convention held at Burg Warberg at the end of September – but what they really had aimed at was to beat down the so-called Nordwestpreis (north-west price) by eight cents per kg slaughter weight the following Friday, bringing it down to EUR 1.38 per kg slaughter weight.

When building up production reserves, cooperation between the individual levels of creation of value is of decisive meaning. What would you think to be the ideal way for producers, slaughterhouses and dealers to cooperate with each other?

It is imperative that every production level sees to it that it produces at utmost efficiency on its own behalf. The ISN does not favour integrated systems, because we think such systems do incapacitate and paralyse the producers.

Looking at the broiler business we see that the farmer is no longer in the position to take any decision on his own but nevertheless must bear the whole risk of production all alone. There he is: having his back to the wall. For the pig feeders this is a warning indeed. Since long ago, the pig industry has proved in parts that good and long-time cooperation is possible even without oppressive contracts suffered from. It’s here where we must continue our efforts.

It is the ISN’s aim to get classification and weighing out of the slaughter companies’ sphere of influence. Could such aim be achieved under the conditions given?

In the short run, such aim certainly cannot be achieved. But it can at long sight. We regard as an example for us the Bavarian meat testers who carry out independent classification in Bavaria. The amendment of the laws on livestock and meat will most probably weaken the producers’ market position, if the drafts prevailing at present are going to be passed indeed. For us this means that independent classification will become ever more important for the pig feeders in future.

In Lower Saxony we are making a huge move forward currently in this respect. A general agreement is going to be signed before long by the red and green political parties – with the Lower Saxony authorities for consumer protection and food safety being involved – in which improved classification and weighing will be fixed.

The pig feeders are still waiting for the Pig Keeping Decree to be realized. What is it that you worry about most in this respect?

The draft presented by the Bundestag in December 2004 still surpasses many of the EU guidelines. What we estimate to be the crucial points for the pig feeders are: required surface per pig, window sizes, illumination, opportunities required for the pigs to keep themselves busy, and transition periods.

All those points would however make building costs increase considerably and worsen still more the competitive conditions for the German pig feeders. We are willing to face competition, but we think it necessary that the same rules must be valid throughout Europe for that purpose.

Considerable national tightening of the forthcoming salmonella decree realization must be reckoned with. Are the pig feeders well prepared for that?

There are still some points in this salmonella decree – which was reviewed by the Federal Ministry of Consumer Protection, Nutrition and Agriculture in June – which we regard to be very hard for us. The decree, for instance, is planned to become effective in 2006 already, although the EU demands it to enter into force as from 2009 only. The extensive particulars required for filling in the documents accompanying every batch of pigs delivered must be integrated into the data demanded for the EU meat hygiene decree that will come into force in 2006.

There are too many points to be obeyed for the taking of samples with regard to documenting and storing duties. For these and other points, cooperating with the QS system (quality assurance system) would be a very sound thing to do. On top of that, that best category (I) has been tautened, so that by far less farms are included in it. Furthermore, all pigs from this category are planned to be marked and transported separately. That’s so insane!

Do you expect differentiation in price of QS pork and other pork to be realisable?

Without achieving differentiation in price, producing QS pork doesn’t make sense at long sight. The pig feeders certainly cannot and won’t accept that they must fulfil high demands with regard to the time and money they invest into documenting their production without being remunerated for it.

The farmers trust in the system, and their trust should not be betrayed.

However, there is no real alternative to the QS system. Seen from the agricultural point of view, one may say that some aspects are still unsatisfying. But if we resist it, a governmental system will certainly be established that the farmers won’t be involved in at all any longer.