EGGS THROWN IN PROTEST AS AVIAN FLU PREVENTION

UNCLAS SECTION 01 OF 02 HONG KONG 001203 SENSITIVE SIPDIS STATE FOR EAP/CM, CA/OCS/ACS/EAP, AIAG, OES/IHA, MED HHS FOR OGHA/STEIGER AND PASS TO NIH/FIC CDC ATLANTA FOR COGH AND DIV-FLU BEIJING FOR CHRISTENSEN/GREEN E.O. 12958: N/A TAGS: TBIO KFLU EAGR PINR CH HK SUBJECT: EGGS THROWN IN PROTEST AS AVIAN FLU PREVENTION MEASURES TURN CONTENTIOUS REF: A. HONG KONG 1034 ¶B. HONG KONG 1061 ¶C. GUANGZHOU 351 ¶1. (U) Summary: The Hong Kong Government (HKG) is proposing significant reform in the live poultry trade following the June 7 finding of H5N1 avian influenza virus in Hong Kong markets for the first time in five years. These "farm to table" changes include a ban on overnight stocking of live poultry in markets (effectively a daily cull),and a proposal to buy-back licenses from farmers, wholesalers and retailers as part of a HKD1 billion plus compensation package. The announcement of the overnight stocking ban on June 27 provoked a demonstration by chicken farmers who threw eggs at the Legislative Council (Legco) and Government House buildings in protest. Negotiations between the HKG and poultry trade industry associations are contentious, with the two sides 30-50% apart on compensation packages and license buy-out figures. The HKG is planning to completely restructure the industry as a means to prevent the spread of avian influenza. End Summary. ¶2. (SBU) Comment: The June H5N1 virus is having implications far beyond those originally anticipated, as the HKG seeks to buy out the entire poultry trade industry as a means to prevent the spread of avian flu. In the five years since the virus was last seen inside Hong Kong's borders, the HKG has grown confident that its prevention, surveillance and detection measures are effective. The return of the virus has shaken that confidence, resulting in this tough response. The compensation package and license buy-outs, combined with the overnight stock ban, and reinvigoration of the plans for centralized slaughter seem to be enough to satisfy the public and media for now -- it remains to be seen if they can stop the virus from returning to Hong Kong. End Comment. Chronology of the H5N1 Outbreak -------------- ¶3. (U) On June 7, the Hong Kong Agriculture, Fisheries and Conservation Department (AFCD) announced that routine testing and surveillance had detected the H5N1 virus in a Hong Kong wet market. Subsequent comprehensive testing across 64 markets and 50 domestic poultry farms found no abnormalities, however, the Secretary for Food and Health raised the response level from "alert" to "serious", adopting a series of public health protection measures: the cull of live poultry at the infected market (over 2,000 birds),suspension of live chicken imports and trade, inspection of mainland China registered supply farms, and enhancement of surveillance measures. On June 11, three more retail markets tested positive for H5N1 avian influenza, resulting in additional poultry culls and intense media and public opinion pressure for action. Reports from mainland China of H5N1 outbreak in Guangdong Province (reftel C) only increased scrutiny of the HKG response. While no human cases have been identified, and no additional H5N1 virus identified in Hong Kong, the HKG is seeking significant changes in the live poultry trade. Ban on Overnight Stocks Draws Eggs -------------- ¶4. (U) On Friday, June 27, the HKG gazetted a measure to ban the practice of keeping live chickens overnight in wet markets, effectively instituting a ban on overnight stocking beginning on July 2. This announcement provoked protests at the Legco and Government House buildings from chicken farmers who fear that this measure will destroy their businesses. Shouting "oppose the overnight ban, demand reasonable compensation", farmers threw eggs and carried cages housing dead chickens, but did not set live chickens free throughout HONG KONG 00001203 002 OF 002 downtown Hong Kong as had been threatened. Note: That threat remains, as farmers have expressed a plan to release live chickens as part of their next protest rally on July 4. End Note. The overnight stocking ban goes before the Legco on July 2 and, barring opposition, will take effect immediately. Poultry Trade Reforms -------------- ¶5. (U) Secretary for Food and Health York Chow began negotiations with all sectors of the poultry industry on June 8 regarding compensation for birds culled and lost business during the import ban. To the surprise of the industry, these discussions are also focusing on closure of all poultry farms in Hong Kong, daily culling at the retail level (para 3),and the buying out of retailer, wholesaler, and transporter licenses. The HKG is proposing a HKD1 billion (USD129M) buy out plan to reform the entire industry comprised of 50 chicken farms, 71 wholesalers, 469 retailers, 266 poultry transporters and 2,500 workers. Meetings are being held with each of the trade associations, with pressure mounting to reach agreement before the import ban is lifted on July 2 and live poultry trade resumes. Sessions between the parties have been contentious, often ending with walk-outs, or not even beginning due to boycotts. The HKG and industry positions are quite far apart: -- Farmers: The HKG wants to buy back all licenses and will pay between HKD680,000 to HKD1.5M (USD87K to USD193K)depending on the size of the farm. The HKG will also pay HKD42 per chicken older than 30 days still in stock due to the government closure of poultry markets. Farmers want business to continue as normal and HKD50 per chicken older than 30 days. -- Wholesalers: The HKG wants a mandatory buy-out of licenses for individual wholesalers and is offering from HKD1.5M to HKD4.97M (USD193K to USD639K),depending on the size of the operation. Wholesalers want to stay in business, but have offered to increase cleaning. They wholesalers have agreed to support a voluntary buy-out of the licenses with compensation based on lost earnings. -- Retailers: The HKG wishes to buy back the licenses of all retailers, offering HKD750K (USD96,400) and will ban chickens in stalls overnight. Retailers want the status quo with chickens kept overnight and compensation for the 21-day closure of markets. Most retailers will eventually agree to the buy-out, but they are holding out for a better deal from the government, according to Steven Wong, Chairman of the Poultry Wholesalers and Retailers Association. Looking Ahead -------------- ¶6. (U) Live poultry imports resume and the overnight stock ban is expected to begin on July 2. The Legco will review the HKD1 billion compensation package for the poultry industry over the next several weeks. The deadline for poultry retailers to surrender their licenses is July 24. On September 24, farm owners and chicken transporters will be asked to surrender their licenses. The poultry trade has threatened to go to court to protect their livelihoods. A court case could alter the timeline substantially. Cunningham