INSTITUTIONS AND PRICE TRANSMISSION IN THE VIETNAMESE HOG MARKET

The Vietnamese Hog Market

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Figure 1. Organization of the hog marketing channel in Vietnam.

The structure of the present hog market can be characterized by two essential
transactions between the producer and consumer levels (Figure 1): the transaction
of live hogs between producers and assemblers (T₁), and the transaction of pork
carcasses between assemblers and meat retailers (T₂). In T_1, assemblers buy hogs
from producers widely dispersed in the countryside, and in T₂ they have to find
buyers who are scattered in the city open markets. As a consequence of high
transaction costs, assemblers resort to agents’ services: upward to extend their
procurement area, and downward to kill the animals and sell the carcasses to meat
retailers. Since there is no refrigeration chain, hogs are transported live and then
slaughtered the same day, close to the place where pork is sold and consumed. No
meat processing plant (with a slaughtering line) is supplying the domestic market
with carcasses. Slaughterhouses are instead very basic setups where animals are
killed and dressed manually.

In the North, slaughterhouses are privately owned. Urban agents are slaugh-
terers in charge of killing the hogs and selling the carcasses to meat retailers. In
the South, slaughterhouses are publicly operated. Urban agents are brokers only,
in charge of selling carcasses on wholesale markets. Both types of agents are hired

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