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For young entrepreneurs looking to invest in the meat industry of Nepal, Pig or Pork Industry can be a good option. Previously considered a taboo due to religious and cultural reasons, pork meat is becoming increasingly popular, especially among the youths. Pork industry has a huge market potential, which if tapped into can reap good benefits for investors.

Growing domestic demand
A report published by SAMARTH and Centre for Environmental and Agricultural Policy Research, Extension and Development (CEAPRED) in 2016 noted that demand of pork meat has been rising annually by 10% in Nepal. According to a newspaper source, in Pokhara alone, the number is as high as 30%.
Changing food habits and growing penchant for foods like sekuwa, pork chop, shredded pork etc. inside the valley and in other urban areas in Nepal have increased demands for pork and pork-related products. General income and consequently, spending capacity of Nepali consumers has also increased over the years, increasing their demand for protein-rich diet, which includes pork meat as well.
As we have become more globalized and have started incorporating international cuisines in our diet, demand for processed pork products like sausages, salami, bacon, etc. has also increased. Another major contributing factor in the rise of demand of processed products is tourist inflow.

 

Export potential
Along with domestic demand, pork products have tremendous export potential as well. Nepal’s immediate northern neighbor, China is the largest consumer of pork meat in the world and consumes around a quarter of global pork production. Consumption of pork meat may still be frowned upon in India, Nepal’s southern neighbor, but there are possibilities of export to Bhutan, Vietnam and Thailand. Nepali entrepreneurs have access to international markets that presently lie unexplored but have huge profit scopes.

Understanding Pork Production
To invest in the sector, it is crucial to first understand its salient features. Contemporary pork industry is largely characterized by scavenging or traditional model. Most pig farms are small in scale and many operate out of backyard of homes and restaurants. Majority of the pigs reared are indigenous and they are fed kitchen scraps and wastes. Feeding wastes to pigs is a cost-cutting measure for farmers since 75-80% of the total costs of pig rearing constitute of feeding cost. Feeding cost is also a major determining factor of profit and sustainability of pig farming.
However, this scenario is slowly changing. New businesses that have adopted systematic or more modern model of pig rearing are gradually springing up.
Figure 1 Value Chain of Pork Industry in Nepal (simplified version)

 

 

Challenges to growth
Despite demand, market potential and supply gap, the pork industry has not been able to flourish in Nepal. It is mired in several challenges and problems that need to be addressed for the industry to grow unhindered. Some challenges to growth of the industry are as follows:

  • There is a lack of clean slaughterhouses in Nepal. Most of the available slaughterhouses follow traditional slaughter methods. This deters both national and international buyers from buying pork products.
  • Current trend of feeding kitchen wastes to pigs reinforces people’s view that pork meat is unhygienic; this can also discourage them from including pork meat in their diet.
  • Similarly, there is common misconception among general consumers that swine flu is transmitted from pork products that further discourages them from consuming pork meat.
  • Even though acts and policies regulating the pork industry are in place i.e. Animal Slaughterhouse and Meat Inspection Act 1999 and Regulations 2001, there is minimal to no implementation.
  • There are Poor Market linkages along with unavailability of locally produced feed ingredients.
  • People are still reluctant to cook pork meat in their vicinity of homes, even though they consider it alright to eat it in restaurants.
  • Farmers, especially in the east, are complacent and do not want to adopt commercial models of farming.
  • There is limited number of meat-processing factories in Nepal that can fulfill the rising demand of processed pork products. According to the report by SAMARTH, there are only six meat processing industries in Nepal.

Opportunities and way forward
Nevertheless, there are several opportunities that entrepreneurs and investors can leverage on.

  • The number of quality conscious consumers is growing in Kathmandu Valley, especially in areas like Nakhipot, Jorpati, Koteshwor and Kalanki. New enterprises can leverage on this while marketing their products.
  • Feed-based commercial farming can easily be undertaken in Nepal. Moreover, required technical resources to do so are also readily available.
  • Government has initiated series of grants, subsidies and loans to support the country’s domestic pig farming. Various NGOs and donor agencies like World Bank and Asian Development Bank have also started various projects to construct new piggeries. In addition, Pig Entrepreneurs’ Association Nepal (PEAN) was formed three years back to address problems faced by entrepreneurs in the pork industry.

Additionally, to ensure that producers follow Good Husbandry and Good Manufacturing Practices, concerned government authorities can strongly implement ‘Slaughterhouse and Meat Inspection Act’. If producers adopt better practices in production and distribute their products through appropriate channels, the pork industry in Nepal can compete with other meat products in both the domestic and global market.

(This article was prepared with the help of report published by SAMARTH and CEAPRED and interview with the Value Chain Expert, Suhrid Chapagain. For more details, follow the link: http://bit.ly/2Bg8j1v)