STRUCTURES AND MARKETING STRATEGIES OF CHINA RABBIT FARMING COOPERATIVES
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1 YINGHE QIN: Structures and Marketing Strategis of China Rabbit Farming Cooperatives STRUCTURES AND MARKETING STRATEGIES OF CHINA RABBIT FARMING COOPERATIVES YINGHE QIN College of Animal Science and Technology, China Agricultural University No. 2 Yuanmingyuan West Road, Haidian District, Beijing, (Makalah diterima 14 September 2010 Revisi 19 November 2010) ABSTRACT China is now the world s largest rabbit farming country, with such features that the percentage of rabbit meat production in total livestock meat production increases year by year. Rabbit farming regions are widely distributed, and those rabbit farmers are generally in miniature scale but in large quantity. When it comes to response to market demand and application of new technologies, these miniature scale but large quantity rabbit farms have certain disadvantages. To address this problem, the most important is to develop a reasonable and effective organizing mode to unite the miniature scale farmers. One of the usual solutions is to set up rabbit farming cooperatives. There are three major types of rabbit farming cooperatives in China, each hasits own structure and marketing strategy to meet the demand of different cooperatives member compositions and management in different areas. With the development of China s rabbit farming industry, rabbit farming cooperatives will exist for a long time and will progress in accordance to the economy development of the Chinese rabbit industry. Key words: Rabbit, farming cooperative, China ABSTRAK STRUKTUR DAN STRATEGI PEMASARAN KOPERASI PETERNAKAN KELINCI DI CHINA China, saat ini merupakan negara terbesar dalam peternakan kelinci. Persentase produksi daging kelinci terhadap total produksi daging meningkat dari tahun ke tahun. Daerah peternakan kelinci semakin berkembang luas, peternak-peternak kelinci umumnya dalam skala kecil tetapi jumlahnya banyak. Ketika harus merespon permintaan pasar dan mengaplikasikan teknologi baru, peternak-peternak kelinci skala kecil akan kesulitan untuk memenuhinya. Untuk menyikapi masalah ini, hal yang paling penting adalah mengembangkan sebuah model organisasi yang efektif dan bertanggung jawab yang menyatukan peternakpeternak skala kecil ini dan salah satu pemecahannya adalah membentuk koperasi peternak kelinci. Ada tiga macam koperasi peternak kelinci utama di China, masing-masing mempunyai struktur dan strategi pemasaran untuk memenuhi permintaan anggota-anggota koperasi yang manajemen dan komposisi anggotanya berbeda. Dengan berkembangnya industri peternakan kelinci, koperasi peternakan kelinci akan tetap ada dan terus berkembang selaras dengan perkembangan ekonomi industri kelinci di China. Kata kunci: Kelinci, koperasi peternak, China INTRODUCTION Chinese rabbit industry is now the biggest in the world. Its total breeding stocks, total rabbit slaughters, rabbit product output and export volume rank first for many years (FENG et al., 2009). In 2008, China yielded totally 415,299,100 of slaughtered rabbits. The production of rabbit meat is 660,000 tons, out of which 10,340 tons are exported. The production of rabbit wool is 12,000 tons, out of which 1,264 tons are exported. The production of Rex Rabbit skin is 50,000,000 pieces, out of which 95% is exported (CHINA AGRICULTURAL, 2009). With respect to rabbit farming regions, rabbits are mainly raised in Sichuan, Shandong, Henan, Hebei, Jiangsu, Chongqing, Fujian, Zhejiang, Inner Mongolia and Shanxi provinces, such very widely distributed areas of China (FENG, 2008). We can conclude from the ratio between product export with total production that Chinese rabbit product mainly supply for domestic market. In 2009, China s per capita consumption of rabbit meat is 507 grams. Though the numbers are lower than most Western European countries, they exceed the global average level (FAO statistical database). 147
2 WARTAZOA Vol. 20 No. 4 Th Table 1. The amount of rabbit slaughtered in different province of China in 2007 Rank Province Number of slaughter (000) Rank Province Number of slaughter (000) 1 Sichuan 174, Guangxi 2, Shandong 83, Shaanxi 2, Henan 39, Xinjiang 2, Hebei 30, Jilin 1, Jiangsu 28, Guizhou 1, Chongqing 19, Beijing Fujian 15, Shanghai Zhejiang 7, Hubei Shanxi 4, Yunnan Hunan 4, Gansu Inner Mongolia 4, Tianjin Liaoning 3, Hainan Guangdong 2, Ningxia Jiangxi 2, Qinghai Anhui 2, Tibet 0 16 Heilongjiang 2,573.2 In recent years, several infectious animal disease outbreaks in different countries, such as foot-andmouth disease and bird s flu. There are also occurrence of some food contamination of animal origin, such as the dioxin incident. These accidents raised people s concern with the safety of pig, cattle, poultry products, which indirectly promoted rabbit meat consumption in China, resulting in increasing of rabbit meat consumption of China year by year (Table 1, Figure 1, LIN, 2008). During the recent 3 decades, China s economy developed rapidly and people s income and living standard improved fast, but in most rural areas, especially in areas inhabited by minority nationalities, remote and border areas and poverty-stricken areas, people are still living poorly and they do not have many ways to make fortune. Rabbit farming needs little investment, receives faster income, and has less risk, comparing with many other livestock keeping. Also, it makes little contamination to the environment and can make full use of rural surplus labor. So, nowadays it becomes an important way to reduce poverty, increase farmers income and improve farmers living standard (FENG and LIN, 2010). Annual amount of rabbit slaughter in recent five years Figure 1. The annual amount of rabbit slaughtered from 2003 to
3 YINGHE QIN: Structures and Marketing Strategis of China Rabbit Farming Cooperatives Arable land in China is relatively few. China has 7% of the world s total arable land but has to feed 22% of the world s population (CHENG, 1995). So, it is an important strategic option for China to fully utilize the non-arable land. Based on years of research, the Chinese government has put forward a strategy that is to stabilize and control grain-consuming livestock industry (such as pig and poultry farming) and to develop grain saving husbandry, including developing rabbit farming effectively (TAO, 1997.) China has a lot of grassland resources and has many surplus rural labors, which are very suitable for rabbit farming (XIANG, 2008.) Many local governments have put rabbit farming as the focal point of local animal husbandry development, giving priority to rabbit farming on the government level. The rabbit industry was supported by many aspects agricultural policy, such as financial support, for example the microfinance, land supply, cooperative foundation and scientific research projects. One of the most important event is the promulgation of Farmers Professional Cooperative Regulations (XING et al., 2009) THE STATUS OF SMALL-SCALE RABBIT FARMING IN CHINESE RABBIT INDUSTRY China is a big country, and it also has a large proportion of rural population. The investment scale of the rural families was limited because of their economic strength (CHEN et al., 2009). Generally most of the rabbit breeders are small-scale, which can also be seen from the official statistics of Shandong province in 2002 (Table 2). The table shows that most of the breeders kept less than 50 rabbits, and only a few breeders had more than 500 rabbits. Many large-scale integrated rabbit industry enterprises emerged in recent years, but the numbers are relatively small, compared to other livestock and poultry industries. Large amount of small-scale but widely regional distribution breeders are significant features of Chinese rabbit farming. Their status in the rabbit industry, technical support they received and their managing and organizing mode have a critical role in Chinese rabbit industry development. Large-quantity small-scale rabbit farms have the advantage of small economic size, so they have little risk. Even if they ended in failure in some cases, the loss will be small (HUA and SONG, 2009.) Also because they are small, they have better adaptability for economic change. There are mainly three types of rabbit in China, which are meat rabbit, Angora rabbit and Rex rabbit. Some farmers have also breeding experiment rabbit and pet rabbits, but they are in small number. The price of different types of rabbit product varies largely year by year, fluctuating with the change of season, region and demand in domestic and abroad market. Same investment in different breeds will end in different incomes. When the farmers find that their products have little profit, they will change to another type breeding easily. Thanks to the small-scale, wide distribution and low breeding density, they can avoid the puzzle faced by many large-scale rabbit farms, and they also have a low cost of management. From economic perspective, the economic benefit of a single doe in a small scale farm is bigger than in a large-scale farm. However, majority of the widely distributed small scale breeders also have many disadvantages in responding to rabbit economy and technologies (FENG and JUN, 2009.). Mainly reflected as: First, rabbit product sales price can not effectively reflect market supply and demand, which influences the income of breeders. Under present conditions in China, individual breeders are connected to final product processing enterprises by large number of middle dealers (FENG, 2010). Relying on product market information, familiarity with sales channels and understanding of breeders expectation, these middle dealers always Table 2. Scales of rabbit farms in Shandong province of China in 2002 Number of rabbit of a farm Number of meat rabbit farms Percentage Number of Angola rabbit farms Percentage 50~ ~ ~ ~ ~ ~ ~ ~ Total Source: Personal correspondence of QIN YING HE 149
4 WARTAZOA Vol. 20 No. 4 Th lower the purchasing price to make extra profit. Sometimes, they even use some extreme measures such as delaying the date of acquisition. This greatly hurt interest of the farmers. Second, the spreading of new breeding technologies in small-scale rabbit farms is too slow, because they are small and widely distributed and the breeders generally got little education. Especially those technologies about improving litter survival rate and disease control are lacking, which ultimately affect the improvement of rabbit production potential and breeding efficiency (HUI, 2009). Because there is no uniform supply of feed, veterinary medicine, vaccines and training on breeding technologies, the same problems occurred repeatedly in different areas and different farms, which affected farmers enthusiasm for continuously keeping the rabbit. Third, supply capacity of rabbit product is limited, because individual farms are widely distributed, lacking an effective organizing mode. So even if there are a lot of farms in a certain area, the overall quality of the products cannot be controlled and the timeliness cannot be guaranteed. This indirectly affects establishment of rabbit product processing enterprises and development of rabbit consumer market in local areas, which is adversely not inducible to local rabbit industry. Concluding from above, the large-quantity of small-scale rabbit farms need an effective organizing for fully utilizing the advantages and to avoid the disadvantages. It is this demand that gave birth to the emergence of rabbit farming cooperatives. MAJOR TYPES OF RABBIT BREEDING COOPERATIVES Rabbit farming cooperative is a new thing in China, having only about 15 years of history. It can be divided into three major types according to different rabbit species and strains, level of economic development, sense of market of the cooperative members, and conditions of the promoters (LIN et al., 2009). The first type is classical rabbit farming cooperatives. This kind of cooperative is established in line with modern western mode in all aspects including organizing structure, operational management, and member entrance requirements. This type of cooperative is co-financed by members with different amounts investment. It has strict regulations and entrance requirement. It often unites all parties which have different advantages in the same rabbit industrial chain to form a community with common interest. These parties include the rabbit breeders, product processing enterprises, research and technology support departments and feed and veterinary medicine suppliers. Breeders are in charge of rabbit farming, and the product processing enterprises in charge of purchasing and processing rabbit of the members under certain conditions. The final product is sold by the processing enterprises directly or by the cooperative. Science and technology institutes participating in the cooperative are responsible for disseminating knowledge and product quality control. The cooperative employs professional management team, and the profit sharing i given to members according to annual operational conditions. One of the most typical cooperatives of this kind is Zhejiang Xinchang Angola rabbit farming cooperative (PING, 1998; DONG and HUI, 2001). The second type is the compact conjugated rabbit farming cooperatives, also known as company+ base+ farmers cooperatives. The fund of this type of cooperative comes from the founder of the company. The entire appliance such as the rabbit hutch buildings, cages, rabbit breeding stocks, feed and drugs are invested or supply by the company. Other members of the cooperative do not invest, but contribute their labor and submit some security payments. Every farmer who wants to take part in the cooperative just need to make an application, then the company will review it and decide if he or she is eligible to be a member. After the approval, farmers need to submit a certain amount of security payment, and then they will become a formal member. Breeding stocks, feed and drugs are sold to farmers on credit. When the rabbits are slaughtered, company will purchase them, and the initial cost of stocks, feed and drugs will be deducted from the sales. Companies generally adopt the five unified management, those are unified breeding stocks supply, unified feed and drugs supply, unified technical training, unified immune procedure and unified product recalls (LING, et al, 2008). In operation, the company supply materials for farmers at a low price, and recall rabbit products at a low price too. This guarantees both the company and the farmers interest. Meanwhile, the entire breeding bases adopt a closed-end management. Rabbit farming is centralized and each farmer is responsible for one designated building. In order to guarantee the safety of products in the market, farmers are not allowed to take any materials and products in or out of the base while entering or leaving it. One of the most typical representations of this type of cooperative is Xinjin Yuanshan Rex rabbit cooperative in Sichuan province. The third type of cooperative is common cooperatives, also known as company+ farmers cooperatives (LONG, 2008.) This type of cooperative is very common in China. Farmers join the cooperative according to their different conditions. The cooperative will provide to the farmer unified breeding stocks rabbit, unified feed and immune procedure, unified 150
5 YINGHE QIN: Structures and Marketing Strategis of China Rabbit Farming Cooperatives product price and recall, unified technical guidance. However, because the members are large in number, and widely dispersed, the control by the company is limited. This type of cooperative generally acts as the bridge between farmers and large processing enterprises. The processing enterprises in the downstream are always given some support in funding and supporting policies. These supports also come from local government. Farmers have a certain degree of freedom in selling their rabbits, especially when the market price is high. One of the most typical representations of this type of cooperative is Jiaonan Zhongbang Farming cooperative in Shandong Province. MARKET STRATEGIES OF RABBIT FARMING COOPERATIVES One of the most important reasons for setting up rabbit farming cooperatives is to unite the dispersed breeders to improve their ability to confront the market change, to make their products be sold easily and improve their income. Therefore, the market strategies for the farming cooperatives are very important (REN and LIANG, 2008). Different type of cooperatives have different market strategies according to their organizing structure and operational management. As to the classic cooperative, they are mostly located in economically developed areas, and members of them have a strong sense of market. In addition, there are some rabbit product dealers in the members of the cooperative. Therefore, the sales plan is made by the management team and operated by the dealer member. Due to the compactness of the organizing, the quality of the products is guaranteed and can be supplied in large amount. They can easily get a high sales price, hence, achieve maximum benefits. For the company + base + farmers cooperatives, the market strategies are completely decided by the company initiating the establishment of the cooperative. Those companies generally have their own sale channel or processing capacity. They will speed up the sales when the market condition is good, or roughly processed and store the products when the market condition is bad. In such circumstances, members of the cooperative do not take part in sales directly, and they depend on the company to sell their products. For the company + farmers cooperatives, they are always a bridge between farmers and the downstream processors, so they often sign contracts with the processors to guarantee the sales of the products. Moreover, in order to ensure a stable supply of products, the processors always give cooperatives a little higher price of the product. From the members point of view, even though they cannot determine the price by themselves, the sales of their products are guaranteed. CONCLUSION It has not been a long time since rabbit farming cooperatives appeared in China. Rabbit farms are also turning from scattered small-scale individual ones into medium or large scale centralized ones to meet the demand of changing product market in recent years. The rabbit raising technologies are developing fast in the recent two decades. Standardization level of the breeding in China is still continuing. Because of the economic development in different areas of China varies greatly, it is the case with weather conditions, forage and feed availabilities, rabbit breeders sense of market and the adopting of strategy of product processing and circling. There are also differences in breeders level of education. Moreover, with fast development of Chinese economy, matching laws and conventions are continuously being refined and China s per capita consumption of rabbit meat has still great development potential. All these indicate a good prospect for Chinese rabbit industry. So, different types of cooperatives will co-exist for a long time to satisfy demands of different breeders. It will also be a long way to improve the coverage of cooperatives on normal breeders. It needs to make more efforts to practice, to explore, to conclude, to improve and to exert the potential and effective of the rabbit farming cooperatives. REFERENCES CHENG, W.G Can Chinese Arable Land Feed Its Population in Next Century. Outlook News Weekly. China Agricultural Industry Technology Development Report. China Agricultural Press Beijing. 19: CHINA AGRICULTURAL Statistical Yearbook. CHINA CUSTOMS Statistical Yearbook. DONG, G.H. and H.Z. HUI With rabbit farming cooperatives as a leader, to promote agricultural industrialization. China Rural Economics 4: FAO statistical database. FENG, C.Y., X.X. PING And S.S. KUN Current status and development strategy of rabbit production in China. Chinese J. Rabbit Farming 5: FENG, Z.M Problems and countermeasures of nowadays Chinese rabbit industry. The Chinese Livestock Breeding 2: FENG, Z.M. and J.Y. JUN Overview of the development of Chinese rabbit industry. China Herbivores 29(1):
6 WARTAZOA Vol. 20 No. 4 Th FENG, Q.Y Rabbit industry is gradually maturing, and has a broad development prospect. Chinese J. Rabbit Farming 3: 4 5. HUI, W.Q Problems of and countermeasures for rural small-scale meat rabbit breeding. Livestock Poult. Industry 8: LIN, G.Z Current status of Chinese rabbit industry and trend analysis for J. Rural Anim. Breeding Technol. 3: LIN, G.Z., H.Y. TING and L.Y. JUAN Progress of Chinese rabbit production organizing mode. Chinese J. Rabbit Farming 27: LIN, S.J Current status, development prospects and benefit analysis of Chinese rabbit industry. Jilin Anim. Sci. Vet. Med. 3: LING, W.T., W.G. XIANG and H.W. YING Basic judgments for 2008 Chinese rabbit industry. Chinese J. Rabbit Farming 3: 5. LONG, C.L A cooperative model for normal rabbit breeders. China Anim. Husbandry Bull. 21: PENG, R.D. and L. HUI Cooperatives are basic organization vector for husbandry development. Chinese J. Anim. Sci. 44(8): PING, C.Z Rabbit. Farming cooperatives in angola rabbit town. Chinese supply and marketing cooperative economy 4: SONG, L.J. and S.L. HUA On the failure of large-scale rabbit breeding and countermeasures in Shandong. J. Anim. Husbandry Vet. Sci. 11: TAO, X.H Development of Chinese characteristics grain saving husbandry, the relationship with rabbit breeding industry. Chinese J. Rabbit Farming 3: 3 6. XIANG, W.X The advantages of rabbit industry will not disappear in next decade. J. Rural Anim. Breeding Technol. 21: XING, Z.M., P.Y LAI, Z.J. XIAN and Z.J. XIAN Review of 30 years development of Chinese rabbit industry and a look into the future. Chinese J. Rabbit Farming 1:
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