Introduction

In Vietnam, household pig production supplies a large amount of fresh pork to the national market. This competitiveness of smallholder pig production is driven by the high demand and preference for fresh meat in Vietnam (Tisdell 2010; Lapar et al. 2012). Pork markets in Vietnam differ between urban and rural areas. There is a high demand of lean pork in urban areas (Tung 2001), while rural families prefer meat with a higher fat content (Cuong 2004). There are, however, several challenges for smallholder producers in improving their productivity and income sustainably. Having a limited capacity and poor access to resources, suitable innovations and the market, as well as a lack of availability regarding information and services, are some current limitations for smallholder husbandry (Wright et al. 2011; Lapar et al. 2012; Lubungu et al. 2012). Smallholder farms often have problems in accessing formal markets because of small marketable outputs, high transaction costs, and inadequate quality standards (Jari and Fraser 2012). FAO (2011) suggests that the best way for poor farmers and small-scale household production to join an added value chain is to organize and collaborate with each other in order to increase their market power. Cooperative action can strengthen the market position of smallholders and their bargaining position, as well as their lobbying power (Kayonza 2014).

In the mountainous province of Son La, in Northwest Vietnam, most of the smallholder farms rely mainly on local pig breeds or crossbreds with exotic boars, for both home use and local market supply, and do not yet participate in the growing pork market (Lemke et al. 2006). Local Ban pigs are preferred by farmers in remote villages due to their feed intake spectrum, feed intake capacity, disease tolerance, and good-tasting meat. However, remoteness and poor infrastructure are the major restrictions for possibilities regarding pork marketing and the exchange of breeding pigs. The pork supply chain in Son La province is unsystematic, and strict quality control systems have not yet been implemented. Local Ban pigs only serve local markets and a small portion of customers (Huong 2007). Valle Zárate and Markemann (2010) argue that a cooperative organization is necessary for linking a farmers’ breeding program with a vertically integrated production chain in which a public and private partnership would support high quality and cost efficient inputs, as well as high price outputs of the system. Tilburg and Schalkwyk (2012) identified two promising options in South Africa: either a high volume with low value strategy or, in the case of niche products, a low volume with high value strategy. Additionally, they stressed the need for cooperative implementation by specific stakeholder groups.

In the context of the Son La province, based on 12 years of research in the frame of the Thai-Vietnamese-German collaborative research program “Sustainable land use and rural development in mountainous areas in Southeast Asia” (SFB 564 “The Uplands Program”), a community-based breeding and marketing cooperative group was transferred to the participating ethnic Thai farmer cooperative group, simultaneously aiming to test the applicability of the model and its prospects for up-scaling to other regions and species (Valle Zárate and Markemann 2010). A study of Levy et al. (2014a) on pig production in rural Kenya found that farmer profits depended mainly on feeding costs, but a large range of marketing factors also decisively influenced the revenue of the farmers. The establishment of farmer groups may reduce transaction costs; however, research on value chain improvements and marketing approaches to ensure a sustainable indigenous pork market is still required (Levy et al. 2014b).

The current study aimed at evaluating the possibilities of a farmer group to access a stable market for their products to ensure long-term sustainability of the communal local pig breeding and production system. The study analyses the potential for developing a marketing channel for specialty Ban pork as an alternative to supplying the local markets within the study area.

Materials and methods

Data collection

The formation of a farmer cooperative group was introduced to all the farmers of 10 villages including the villages of: Bo and Co (Chieng An Ward, Son La city) and Buon (Chieng Coi ward, Son La City) (near town villages); Dau and Ot Luong (Chieng Co commune, Son La City–intermediate villages); and Long, Khoang, Phat, Hiem, and Lam (Ban Lam commune, Thuan Chau district–remote villages). An overview of pig keeping, including the number of pigs, breed, and yearly sales, was derived from the data of 378 interviews with farmers who wanted to enroll in the cooperative group. After the interviews, 180 farmers in these 10 villages, with 64 farmers from the villages near town, 33 farmers from the intermediate zone in Son La city, and 83 farmers from the remote villages in Thuan Chau district, were selected to be members of the cooperative group. The major selection criteria for the members included the availability of stables/space and labor for pig rearing; motivation behind developing production of Ban and/or Mong Cai pigs; willingness to join the cooperative group due to a justifiable interest, such as the improvement of market access and productivity etc.; access to health care and pig breeds; and a willingness to contribute a membership fee.

Information on the price of local pigs/pork was collected monthly in the 10 villages of Son La city and the Thuan Chau district from 10/2012 to 01/2014. Five randomly selected farmers in each district were interviewed over two days at the end of each month in order to ascertain the farm gate prices of purebred Ban pigs and other crossbred pigs, within the different weight categories.

Information on demand and preference for local Ban pigs and their crossbreeds, according to genotype, weight category, price, husbandry, feeding, and the requirements for pork quality, were collected by interviewing specialty restaurants and food stores in Hanoi that were selected according to the list of Phuong et al. (2014), the websites, and direct observations, and slaughter men and collectors in Son La open markets introduced by Son La veterinarians, using a short standardized questionnaire. In total, 57 traders, who were currently trading Ban pigs/pork and were willing to answer the questions related to the above mentioned information–which included 11 slaughter men in Son La province, six food stores, and 40 restaurants in Hanoi–were interviewed to identify market demand, and to introduce the cooperative group and their Ban pigs.

Data of the pig trading, including the number of Ban pigs sold in Hanoi, their prices, their weight and age, and the local market price at the time of sale, as well as all additional costs for transport and slaughter, were recorded among the members of the cooperative. The feedback of traders (and also their customers) for the pork quality and other issues related to services was collected after each delivery. The consumption of Ban pig products was recorded. Information about the traders, prices, and the kind of feeding schemes used for the good quality pork was fed back and exchanged between the members to improve the group’s bargaining power with the traders.

Data analysis

The qualitative data and information on market demand and marketing development were analyzed using descriptive statistics. The quantitative data was analyzed by applying SAS software version 9.3 (SAS Institute Inc., Cary, NC). Count data was analyzed using general linear models (GLM procedure). The applied linear model is given, followed by the model notation suggested by Piepho et al. (2003): Y(f x ) = Z, where Y is the expected cell frequency of the number of pigs raised and sold, and Z is the zone effect (three zones: near town, intermediate and remote); and Y(f x ) = B, where B is the breed effect (four breeding groups: pure Ban, pure Mong Cai, crossbreed, and mix of breeds).

Pig prices over months and years were transferred to MS Excel spreadsheets. Differences in the criteria of the traders for selecting pigs from different zones were examined using Chi-square tests.

The ranges of weight of marketed Ban were derived from trader interviews in order to identify the preferred weight categories of Ban pigs by calculating the lowest and highest values, medians, and lower and upper percentiles (P25–P75). For the ages and weights of the Ban pigs at sale and the respective prices given, medians were also calculated. Price differences between markets were examined using the Kruskal-Wallis Test.

Added value (AV) when selling local Ban pigs to food stores in Hanoi compared to trading in local markets was calculated from the sale of 107 Ban pigs by:

AV (in VND/kg live weight) = price per kg live weight (LW) of Ban sold to Hanoi–market price at farm gate per kg LW of Ban sold to a local trader in Son La at the same time.

The added benefit (in VND/pig or per kg live weight) that the cooperative group could receive from selling a Ban pig to Hanoi was calculated using the revenue from selling the pig to a food store, subtracting all transaction costs for transporting the pig from the farmer to Hanoi, and, in the case of the sales of carcasses, the slaughtering cost. Additional costs, like expenses for a cooling box and bamboo pod, were considered.

Results

Overview on pig keeping and Ban marketing in the study zones

Different breeds of sow were often kept by farmers in different zones. In the villages near town, the Mong Cai breed was more prevalent than crossbreeds or pure Ban pigs. In the intermediate zone, pure Ban, Mong Cai and crossbred sows were quite equally distributed on the farms. Almost all of the interviewed farms in the remote villages kept pure Ban pigs (see Table 1).

Table 1 Percentage of sow breeds by zone
Full size table

Commercial pig production differed between zones. Very few pigs were sold on farms in remote villages (on average, only 3.0 pigs/farm/year). The number of pigs sold increased by a factor of three to four in the intermediate and near town villages (see Table 2).

Table 2 Total number of annual pigs sold by zone
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Very few Ban pigs were marketed. The numbers of pig sales by farms raising only Ban pigs was significantly lower than that of farms raising other genotypes (see Fig. 1). A significant difference (P < 0.001) in the number of total pigs sold between farms raising purebred Ban and farms raising crossbreeds, Mong Cai and a mix of breeds was detected.

Fig. 1
figure 1

A distribution of pigs sold annually by interviewed farmers using the breeding groups. CB crossbreeds, MC Mong Cai, Mix a mix of breeds

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Farmers in the study region used to sell pigs to traders at the farm gate. The price was agreed upon during the transaction. Farmers used to sell the entire litter at the same price. In the Thuan Chau district, Ban pigs could also be sold at a fairground at a low price, whenever the farmer needed cash. The price for pigs in general and Ban pigs in particular has been fluctuating seasonally. Prices for Ban pigs were slightly higher in villages near Son La city compared to villages far from town (Thuan Chau district), and prices per kg decreased with a heavier weight. The highest fluctuations during the year were found for Ban pigs in the weight category of 20–40 kg. From the weight category of 40–80 kg and above, prices were lowest, but quite stable. Prices increased for approximately two months before the Lunar New Year (January and February), a consequence of the higher demand for Ban pork during the festivities (see Fig. 2).

Fig. 2
figure 2

Prices at the farm gate of pure Ban pigs in two districts of Son La Province during the year by live weight category. TC Thuan Chau district (remote zone), SL Son La City district (intermediate and close to town)

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The prices of different crossbreeds followed the same pattern, whereby heavy pigs held lower but more stable prices than small piglets. Prices of Ban-crossbred piglets were similar to Mong Cai-crossbred piglets. It can be understood that the prices for founder animals of all genotypes were high and fluctuating

Developing marketing channels for specialty Ban pork

Results of the trader interviews showed that small Ban pigs (10–15 kg) were preferred as a specialty dish in restaurants and food stores in Hanoi, while in Son La, heavier Ban pigs (40–80 kg) were demanded in the open market. The highest prices were achieved for small Ban pigs in Hanoi, and the lowest for the heavier ones traded in Son La (on average of 120,000 VND/kg live weight compared to 55,000 VND/kg live weight, respectively) (see Table 3).

Table 3 Preferred weight categories of Ban slaughter pigs and trading prices for Ban pigs in Hanoi and Son La markets
Full size table

In Hanoi and Son La, 59% (27 out of 46) and 91% (10 out of 11) of the interviewed traders, respectively, gave specific criteria for evaluating the quality of Ban pork. Almost all traders wanted Ban pigs with a high lean meat rate (more than 40% of the total carcass weight). A good smell during cooking was requested by 50% of traders in Son La and more than 30% of the traders in Hanoi. In addition, a traditional feeding system (free scavenging, no industrial feed) was one of the major criteria for good quality pork in Hanoi. The request for a certificate of veterinary inspection was only mentioned by some traders in Hanoi, while no traders in Son La requested any of the latter two criteria.

Only 21% of the interviewed restaurants and food stores in Hanoi had a contract with one or two collectors for buying Ban pigs. Two thirds (66%) of the interviewees knew the origin of the purchased pigs. Depending on price and quality, 78% of the interviewed traders in Hanoi were interested in tasting Ban pigs from the Son La cooperative group before agreeing to a stable supply.

The above information and the analyzed marketing data were frequently reported to the cooperative board of management and all members. It was revealed that niche markets for different pig genotypes and weight categories should be targeted and this required active participation from all members. Selected small Ban pigs were sold regularly to food stores in Hanoi for a higher price than on the local market. Breeding piglets and other heavier pigs were sold to the local market in Son La province. The sold pigs had to meet the requirements of the regular buyers, especially in terms of weight category, age, feeding system, and smell during cooking. It was clear that selling pigs to Hanoi could bring added value to individual farmers and to the cooperative group. Furthermore, all members of the cooperative group were trained in marketing, pig production, and health care. Three members of the cooperative group visited the Baeuerliche Erzeugergemeinschaft Schwaebisch Hall (BESH) in Germany, where local pigs were bred and produced by members of the cooperative. Pigs from the German cooperative were slaughtered at their own slaughter house, and marketed in their own shops and restaurants as well as with different contracting wholesalers or supermarket chains. Other pigs were marketed at regional markets or in special butcher shops with added value by relating the product to the special breed of the cooperative, the local Schwaebisch-Haellische pig. These training activities aimed to improve the awareness and comprehensiveness of farmers in the collective action for pig breeding and production.

Farmers in remote villages in the Thuan Chau district have adapted to the demands of the high quality market of Ban pigs in Hanoi. When an order was received, good slaughter piglets for the Hanoi market were selected from farmers who kept pure Ban pigs for producing heavy fatteners, and from farmers practicing breeding after selling the best Ban pigs as breeding piglets. The remaining piglets were fattened and sold to local traders at a heavier weight, and consumed by customers buying from the local markets. Selected Ban piglets (n = 107) were sold in Hanoi for an average live weight of 16.5 kg (P25–P75 ranging from 13.5 to 21.0 kg) and at an average age of 8 months (7.0 to 10.0 months). All farmers keeping pure Ban sows were connected to the Hanoi market for specialty Ban pork and to local markets in Son La for the other pigs. Thus, through experiencing higher benefits, all the farmers agreed to the change in marketing strategy, and about half of them had already dropped their habit of selling the entire litter at one price and become accustomed to selecting pigs for sale according to market segments.

When selling pure Ban piglets to the Hanoi market, farmers received an average added value of 9000 ± 4700 VND, an increase when compared to the local market price for each kg of live weight, i.e., the added value was 12.8 ± 6.9 % of the market price for a kg of live weight. The respective added value for the cooperative group amounted to 220,700 ± 123,000 VND/pig (equal to 11,300 ± 5600 VND/kg of live weight). Through a common agreement created by the cooperative group, one third of this amount was saved as common capital for the cooperative, while the remainder was used for salary payments to the board of management, which was responsible for managing the marketing activities. From the farmers’ point of view, the more piglets sold to Hanoi, the more space and farm resources available for enlarging the herd size. The resulting high benefit obtained encouraged them to increase Ban pig production, and was more than able to compensate the cost of their membership fee (50,000 VND/year). However, one problem during the implementation of the new marketing strategies was that some farmers tried to cheat by omitting the fasting periods before slaughter. Furthermore, some members were not active in recording performance data and herd inventories for reporting to their leader, resulting in problems when elaborating a sound and appropriate business plan for the cooperative group.

Discussion

Local pig production and marketing

Smallholder farmers in the northern mountainous area of Vietnam are aware of the disadvantages and risks of keeping exotic breeds that require higher inputs and better husbandry conditions than indigenous breeds (Tjällden 2003). The preference of farmers for the local Ban pigs results from their suitability and adaptability to the lack of capital belonging to the poor farmers, poor infrastructure, and limited accessibility to markets in the remote areas (Roessler et al. 2008). Thus, the results of the current study resemble those of previous studies that have shown a distribution of breeds matching specific production conditions, i.e., a dominance of local Ban in remote areas and preference for improved breeds (e.g., Mong Cai and crossbreeds with exotics) in closer-to-town situations (Lemke et al. 2006; Roessler et al. 2009; Ieda et al. 2015).

In the study region, Ban pigs were mainly sold to nearby local markets without fully exploiting other profitable urban markets in the lowlands (Huong et al. 2009). Only a small number of Ban pigs were marketed to specialty restaurants in Hanoi (Huong 2007). Before farmers joined the cooperative group, the commercialization of pigs in remote villages accounted for only 3.0 pigs/farm/year compared to 9.3 pigs/farm/year in the intermediate zone and 11.2 pigs/farm/year near to town. Such fairly low commercialization rates point to the major purpose of keeping Ban pigs in remote villages for home consumption and cash requirements (Lemke et al. 2006; Huyen et al. 2006). The number of marketed pigs at the onset of the current study was even lower than the average number of pigs sold yearly by small-scale household farms in Vietnam (6–20 slaughter pigs/year) given by Lapar et al. (2012). This can be seen as a consequence of the weak linkage between producers in the uplands of Son La province and the lowland supply chain actors (Huong et al. 2009), despite the increasing preference of consumers for local pigs outside the province. The lack of market outlets is also mentioned in the study of Ouma et al. (2014) and Riedel et al. (2012), where almost all smallholder farms in rural and remote highland areas in Uganda and China sold their pigs to their neighboring butchers at low prices. A lack of market information and capacity in pig live weight estimation (Ouma et al. 2014), as well as lack of bargaining power (Riedel et al. 2012), were major reasons for these low prices. The opportunities for access to more profitable markets were limited.

In the current study, the prices of Ban pigs and other crossbreeds were different between weight categories. High and fluctuating prices for piglets resulted from the limited availability of breeding piglets in the study region. This challenge also opened up an opportunity for a well-organized community-based breeding and marketing program, in which targeted local gilts or piglets could be supplied sustainably by household pig breeders (Herold et al. 2010; Lapar et al. 2012).

Developing marketing channels for specialty Ban pork

Levy et al. (2014a) suggest that farmers should be educated and informed about prices, weight estimation, and techniques to negotiate with traders for reasonable prices, because varying prices heavily affect the benefit of pig production. Phuong et al. (2014) reported that trading Ban pigs and meeting specific requirements of restaurants in Hanoi and surroundings could bring 6–9% higher prices for farmers. In the current attempt to explore market opportunities, high prices could be fetched for pigs selected for market suitability in Hanoi city, while the remainder could be marketed at lower prices in local markets in Son La (Table 3). Thus, potential markets have been identified for each product category of the cooperative group. Pure Ban pigs at the weight of 10–15 kg were most preferred by customers in Hanoi (see Table 3) and could still get a good price at the local market in Son La, while the heavier ones from 20–40 kg would achieve lower and fluctuating prices in Son La (see Fig. 2). Purposefully targeting these different market segments could enable farmers to sell their pure Ban pigs at target weights for more profit. The study of Phuong et al. (2014) also showed that the preferred weight of specialty Ban pigs was below 15 kg. In the current study, different criteria for pork quality relevant to the preference of traders were identified, in which a high lean meat rate was required by most of the traders in both market places, Son La and Hanoi. The higher fat content and the assumption that concentrates had been fed to the pigs were also given by restaurant owners as reasons for lower prices for bigger Ban pigs in the study of Phuong et al. (2014). Lapar et al. (2012) proposed that the competitiveness of a niche market for smallholders to supply local piglets provides an opportunity for them in local pig production. However, so far, high transaction costs and less integrated markets were the main reasons for the low benefits of pig production in the upland province (Huong et al. 2009). Insufficient marketing outlets, as well as limited market information, were also reported by Mbuthia et al. (2014) as major constraints to smallholder pig production in Kenya. For instance, if farmers would only have more knowledge about the weight of sold pigs and the communication with traders, the business would already have improved (Levy et al. 2014b). The current study emphasized the importance of giving regular feedback from consumers to the farmers regarding the niche markets of different products. This information provided farmers with the awareness of competitive local pig products, and how the power of collective action can support remote producers to develop their production and marketing strategies. As a consequence, selected pure Ban pigs were increasingly sold to food stores in Hanoi at high prices, at about 16 kg and 8 months of age. A study of Muth et al. (unpublished data) showed that traditional pork from purebred Ban pigs slaughtered at about 15 kg and 6–7 months of age in Son La province could be discriminated from commercial pork through cut dimensions, such as the significantly reduced loin eye area, and the significantly reduced back fat thickness and marbling content. The change observed in the present study region in which farmers’ behavior shifted from selling entire litters at a low standard price to selling selected higher quality pigs for higher prices implies that farmers were becoming aware of the added value their pigs could reach in more profitable lowland markets. According to Olson (2009), by sharing their knowledge within a producer organization, farmers could ensure market upgrades for their products and achieve higher production efficiency. In the current study, long-term trading relations were maintained, as described by Huong (2007) and Phuong et al. (2014), i.e., marketing agreements were not made in written form, but mainly from building relationships with trading partners based on trust, satisfaction, and power dependence.

In the current study, the added value from selling specialty Ban pigs to regular markets in Hanoi promoted a market orientation in local pig production and participation in a cooperative group. Such a market-oriented breeding system has also been seen in the UK sheep industry, where the adaptation of local breeds to specific environments enhances the overall benefits for inhabitants and the prevailing natural systems (UK Agriculture 2009). Jari and Fraser (2012) found that smallholder pig farms in the Kat River Valley in South Africa did not participate in the cooperative organization because they were not aware of the importance of value-adding. The authors argue that developing and initiating value-adding practices are very important in the cooperation of farmers with private and public sectors. Studying cooperative organizations of small-scale farmers in Vietnam, The Anh et al. (2006) found that collaboration between cooperatives and other actors in the commodity chain was limited, and securing the sale of outputs from members is a problem in almost all cooperatives. The negative opinion of farmers in remote villages toward farmer organizations, as reported in the study of Roessler et al. (2012), stemmed from experiences of farmers having to contribute considerable sums of money without receiving any benefits. The initial success of pure Ban pig marketing in Hanoi, as developed in the course of the current study, may provide the opportunity for a long-term sustainable operation of the farmer cooperative group in the study region. High competitiveness for fresh pork from smallholder pig production (Tisdell 2010; Lapar et al. 2012), and an increased concern about meat quality and food safety by high income urban consumers (Regmi and Gelhar 2005), may further motivate the development of smallholder pig production cooperatives. However, in the future, the process may also necessitate animal identification and recording (Schmitt 2009). Results from comparative studies on meat quality may help to match production strategies and customers’ preferences (Muth et al., unpublished data). As trust is a main prerequisite for the long-term success of a farmer group within niche markets (Masuku et al. 2003), all members of the cooperative need to safeguard their standing with the partners in the market, regarding that the provision of the products is in accordance with the agreements made. This in turn will require strict control and supervision by the management board, as well as by individual members.

The acceptance of the extended market in the lowlands for specialty local Ban pork, and its added values, are encouraging ethnic farmers in remote areas to change from subsistence to market-oriented pig production. Without government subsidies, the limited accessibility to regular markets is an important motivation for the cooperative group in extending local pig production. Changing toward market orientation when joining the cooperative group provides the basis for Ban pig keepers to improve their production to a higher quality (via breeding and husbandry management), thereby attaining a higher income, and improving the innovation application for Ban pig keeping toward a more socio-economic sustainable production. Mueller et al. (2015) mentioned that the formation of a breeder organization with collective actions is very useful for empowering livestock keepers in the marketing of their products, animal health care, and other interventions.

Effective management of the cooperative group is very important for its long-term operation, particularly in order to avoid any breakdown of coordination and deter members (Olson 2009). Restrepo et al. (2014) state that external motivation, such as incentives or regulations, and internal motivation might change human actions; therefore, understanding and applying trust-building mechanisms among the different actors, and ensuring that they are aware of their roles in the process, are very important. A multi-institutional cooperation of commercial farmers, researchers, private sector organizations, and public authorities can work together to play an important role in monitoring the improvement in market access for smallholders (Tilburg and Schalkwyk 2012). The support of policies targeting smallholder farms in rural areas is necessary. Lapar et al. (2012) argue that, in addition to the constraints of resource limitation for sustainable development, smallholder pig production in Vietnam has difficulty adopting the relevant policies and institutions, which tend to favor the development of large scale commercial farms. This was also observed in South Africa and seen as a constraint for smallholder farmers in accessing a fair and competitive market (Jari and Fraser 2012).

For the long-term development of the cooperative group, trade mark registration needs to be carried out in cooperation with the contracted food stores in Hanoi. Furthermore, strict pork quality control would be required to help protect the brand of the product. Written contracts need to be signed between the cooperative group and the regular consumers, thereby replacing the current oral confirmation. In order to maintain and improve the quality of pure Ban pigs, members of the cooperative need to continue with their efficient system of recording data so that they can further develop the Ban breeding nucleus herd with support from the research institutions.