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Voluntary surrender of pig farm licences proposed

The Government announced today (April 4) a proposed incentive scheme for pig farmers who choose to surrender their licences voluntarily and cease pig farming activities permanently in Hong Kong.

A spokesman for the Health, Welfare and Food Bureau said the main purpose of the scheme was to reduce the number of pig farms in Hong Kong thereby reducing associated public health and environmental pollution problems.  

At present, there are 265 pig farms in Hong Kong rearing about 330,000 pigs, which supply about 20% of the local fresh pork market. Most of these farms are located in northern New Territories.

"Pig farming activities generate considerable public health and environmental pollution problems that are difficult to overcome and we need to consider whether the sustainable development of livestock farming can ever be realistically achieved. With the rapid urbanisation of Hong Kong and heightened community concern about public health and environmental issues, we consider it appropriate that the number of pig farms should be gradually reduced.
"This can be achieved by stopping the issue of new licences for pig farming and by reducing the rearing capacity of existing farms. In parallel, the Administration should also tighten the existing licensing framework to ensure compliance with the licensing conditions. Under such circumstances, it is appropriate to introduce a voluntary surrender scheme for those who do not wish to remain in the trade.

"During past discussions with pig farmers, it appeared that many were prepared to surrender their licences for a reasonable package. In this regard, we have so far received over 190 written submissions, representing nearly half of all pig farms, urging the early launch of the scheme," the spokesman said.

Under the incentive package, which amounts to a total expenditure of $941.7 million, ex-gratia payment (EGP) will be provided to pig farm licencees who choose to surrender their licences and to cease pig farming permanently.

The EGP calculation will broadly follow the current formulae for calculating ex-gratia allowances for pig farms affected by land resumption and clearance for public work projects, as approved by the Finance Committee of the Legislative Council. There are two major components in the formulation of the EGP, namely the EGP for farm operation and EGP for farm buildings, such as pig sheds and agricultural stores.

"To encourage smaller pig farms to close down and surrender their licences, we propose to set a minimum EGP payable to pig farmers and to include an element that takes into account the number of pigs raised by individual farms. Under the proposed arrangement, the minimum EGP the pig farmers can get is $450,000 while the highest is $25.45 million.

"As the 'Wet-Muck-Out' (WMO) facilities is a capital-intensive environmental protection facility in many pig farms, the Administration has also decided to include an additional EGP factor taking into account the farmers' capital investment in WMO facilities after deducting the capital grant provided by the Administration to the pig farmers to set up the WMO to control pollution back in the 1990s. Only pig farms with WMO facilities would be eligible for this EGP component," the spokesman said.

The scheme also provides an $18,000 one-off grant for each affected local pig farm worker and live pig transport worker to ease their immediate financial needs.

A loan of $50,000 will be provided to each transporter who has been transporting live pigs from local pig farms to slaughterhouses to upgrade/convert their vehicles for other business opportunities.

In response to concerns about pork supply in Hong Kong, the spokesman explained that although the number of live pigs produced by local farms would shrink, the number of live pigs imported from the Mainland would increase to fill the gap, depending on market demand.  

"As a corollary to the introduction of a voluntary surrender scheme for pig farm licences, the Government also proposed to introduce legislation to stop the issue of new pig farm licences to gradually reduce environmental pollution and public health problems that were caused by the existing pig farming activities. Meanwhile, the Administration would freeze the rearing capacity of those pig farms that choose not to join the scheme.

"Subject to funding approval from the Legislative Council's Finance Committee, the Government plans to invite applications from pig farmers as soon as possible," the spokesman said.

Ends/Tuesday, April 4, 2006
Issued at HKT 19:13