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Romania sees opportunity in China's new taste for meat

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(Globalpost/GlobalPost)

Hit by declining demand on the local market and in parts of Europe, Romanian farmers say China's growing meat needs may help them out of the hole.

Chinese officials earlier this week signed two agreements to import 500,000 cattle and three million pigs from Romania over the next few years.

On a visit to Bucharest, Premier Li Keqiang said China also wanted to import sheep and possibly other food produce.

"We can buy all you can deliver," Li said after talks with Romanian counterpart Victor Ponta.

Fast-paced urbanisation and development of a middle class have radically changed the Chinese diet, with meat increasingly replacing or complementing rice and vegetables.

"In 1978, China's meat consumption of 8 million tons was one third the US's. Now China's annual meat consumption of 71 million tons is more than double that in the US", Washington-based Earth Policy Institute said, citing USDA figures.

In their 2013 Agricultural Outlook, the Organisation for Economic Cooperation and Development (OECD) and the United Nations' Food and Agriculture Organization (FAO) said meat demand in China will continue to rise in the next ten years, in line with rapid expansion of household refrigerators.

In rural northern Romania, breeder Dumitru Grigorean said China's plan to import livestock was good news.

"It would be a pity to miss the opportunity," Grigorean, 44, told AFP.

"Of course I'd earn a lot more if I made (computer) tablets like the Chinese do, but I'm only good at raising cattle," he added.

Grigorean said he invested some 80,000 euros ($108,862 dollars) in his farm, buying 70 French meat cows, and expected to start seeing a profit two years from now.

"The cows thrive on the rich grass and enjoy the fresh air even when it is cold," he said.

He said that several members of his cattle breeder association, who own up to 2,000 head each, were set to export cows to China.

But Dragos Frumosu, the leader of the food industry trade union, said Romania did not have enough cattle to meet Chinese demand.

"The solution would be to set up joint farms with Chinese capital or encourage local farmers to expand by using more European Union funds," he told AFP.

Agriculture minister Daniel Constantin said Romania's cattle stock dropped sharply from 2.8 million in 2001 to 1.2 million this year.

But he added that the government earmarked 830 million euros of public funds and European money to help breeders increase stock.

Romania currently imports up to 70 percent of its beef consumption and some 50 percent of pork consumption, but also exports cattle and sheep mostly to Arab countries.

During the first eight months of 2013, the Balkan country's livestock imports amounted to $141.5 million while exports stood at $276 million, official figures show.

Constantin said Romania would have no problem exporting sheep as it has a surplus of around 5.0 million heads.

Shuanghui International's recent takeover of Smithfield Foods in the United States, which owns a pork producer near Timisoara in western Romania, will partly solve the pork exports issue.

The former Smithfield's Comtim farm breeds some one million pigs, out of a total of 5.7 million raised in Romania.

"Local farmers used to complain that they have no outlet for their meat," Stefan Minea, head of the Romalimenta food industry association, told AFP.

"Now they can export to China. But they must make sure quality standards are met and the price is right," he added.

Minea said the Chinese will do it their way: set up offices in Romania, inspect the farms, make sure the livestock is disease-free and if they are satisfied give credits to the breeders.

"Romanian farmers have little money to invest," he stressed.

"We have to help ourselves but we also need to get subsidies, as do farmers all over Europe and in the Americas," Grigorean said.

"Because as much as we love what we do, if we see that our pockets are empty one day we might give up farming, and maybe keep just one or two cows as a hobby."

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http://www.globalpost.com/dispatch/news/afp/131201/romania-sees-opportunity-chinas-new-taste-meat