Charoen Pokphand Group: Benefiting Chinese Farmers

By He Yao

In Beijing’s suburban Pinggu District there lies a chicken farm with 18 massive barns, each housing about 168,000 hens. What makes this farm unique, however, is not its size — it is the fact that there is only one human being operating each barn.

The entire farm is under a system in which feeding, egg collection and cleaning are automated. The “housekeeper”, an intelligent robot, makes his rounds in the barns and monitors temperature and humidity, as well as the condition of the hens and their eggs. Any abnormalities will immediately be referred to the barn manager. In addition, egg classification equipment and liquid egg processing equipment are also automated. Outside the farm, large delivery trucks wait to transport eggs stamped with “CP” (indicating Charoen Pokphand Group, the farm’s key investor) to supermarkets in Beijing and surrounding areas.

Charoen Pokphand Group is Thailand’s largest private company and one of the world’s largest conglomerates. In introducing an automated egg production process, the group focuses on food safety — reduced human interaction in the process means less chance of polluting the supply.

“In the production process, from feeding to the final product, we refrainfrom using antibiotics and hormones,” said Wang Shancheng, President of the Beijing CP Egg Industry Company. “The whole process of egg production, packaging and transportation is automated for ‘zero pollution with zero contact’. We have also developed a strict product traceability control system and quality management system to ensure the quality of CP products.”

Exploring a Sustainable Development Path

In the agricultural industry, reducing waste caused by production is vital. How can modern agriculture be sustainable? The supporting projects of the farm — CP’s ecological orchard and its Siamese crocodile breeding base — have set fine examples for the industry.

The Beijing CP Egg Industry produces 30,000-40,000 tons of ecological organic fertilizer every year, which is applied to its 135-hectare peach orchard. Thanks to the special natural environment and its advanced cultivation model, the peaches produced in this region are known for their delicious taste. The estimated output of the farm will reach 1,000 tons in 2017.

The Siamese crocodile breeding program is similarly innovative. As the first large-scale aquaculture enterprise engaged in captive breeding of the Siamese crocodile so far north (the Siamese crocodile is native to Southeast Asia), the CP Siamese Crocodile Lake (Beijing) Company has expanded its range of knowledge and expertise to Siamese crocodiles, allowing the crocodiles to grow and reproduce in temperate, high latitude areas after a long period of technical research.

What’s more, the project has contributed new ideas for integrated value chains from upstream to downstream in the livestock breeding industry. It is environmentally friendly and engages in sustainable practices. Meanwhile, it effectively complements the close-circuit livestock breeding industrial chain and provides ingredients for catering, food, leather and health products as new revenue points.

Four-Pronged Model for Rural Development

CP Group has not only promoted the modernization of Chinese agriculture with advanced production methods but also attached importance to solving the problems of the farmers’ lack of funding, technical skills and market access.

The Pinggu chicken farm project differs from other models of cooperation with local farmers. With this project, CP Group has combined the resources of the government, leading enterprises, financial institutions and agricultural cooperative organizations; hence a four-pronged model.

The legal entity of the project, the Beijing Green Square Livestock and Poultry Cooperative, is a registered organization of the local farmers. Apart from payments given to land owners, the farmers can earn regular income from the farm and share dividends. Every year, 12 percent of Beijing CP Egg Industry’s budget investment is spent on land owners’ rewards and dividends. In addition, farmers can work on the farm to earn a salary while also learning how to operate modern agricultural industry equipment.

“With this project, CP Group has been employed by the local farmers,” commented Xie Yi, senior vice chairman of CP’s Agro-Industry and Food Business Group in China. “What the farmers need most are funding, technical skills and market access. The four-pronged model of the Pinggu project has been a very good solution for the farmers. After the expiration of the contract, the project will be transferred to the farmers’ coopera
tive voluntarily. By that time, farmers will become the bosses whereas enterprises will be employees. Farmers will be the owners of the modern agro-industrial enterprises. ”

At present, CP Group is actively exploring the possible application of the four-pronged model to other parts of China. It also hopes to contribute to the transformation and upgrading of China’s livestock breeding and development of a modern, sustainable agricultural industry. The actual content of the model will be adjusted to the circumstances of different regions, Xie explained. However, agricultural products have always been CP Group’s main business, and the introduction of its high-tech products into agricultural operations in rural China has greatly benefited local farmers.