Reduction of pig production makes no economic sense

The recent Melacca government's decision to reduce the quantity of pigs in pig farms basically makes no economic sense. Reasons are:

• More pigs produced locally, less imports and therefore capital can be freed for some other stuff.

• More pigs, cheaper pork. Less pigs, expansive pork. Basic supply and demand. As pig production is forced to reduce, pork becomes more expensive which causes standard of living to drop because consumption decreases due to higher relative prices. It doesn't stop here and eventually non-pork consumers will also be affected when pork consumers start substituting pork for other meats like chicken. Demand for these meats will then increase and will therefore create an upward pressure on their prices. To illustrate my point, consider this example:

"An economy has a population of 100 people and produces 50 chickens and 50 pigs. The government announces that production of pigs will be reduced to 30 pigs. Pork consumers will have to offer higher prices to outbid their peers if they want to continue consuming the same amount of pork, increasing pork prices.

Some pork consumers cannot bear this price increase and substitute partially or fully to chickens for meat. Chicken production has not changed but demand for chicken has now increased. Because the same amount of chicken have to be divided to a greater amount of consumers, consumers wanting to consume chicken will now have to bid higher prices.

In the end, the economy produces only 50 chickens and 30 pigs. There's now less resources to go around so everyone now consumes less."

• More imports, more profit for holders of Approved Permits (AP), slower economy. With the system of Approved Permits (AP), imports can ony traverse through approved permits. AP holders profit off the consumer by instituting higher import prices. Giving assets(revenue) to AP holders slow the economy because resources are being given to inefficient individuals and firms which does not promote growth to the economy.Even if the economy renormalizes itself when the pig breeders produce something else, the present slow may have already already caused a lower future output. The economy needs to allocate its resources to the most efficient sectors for optimal growth and not to cronies which does not promote any sustained growth in output.

Pigs are confined to concrete stalls where they are unable to even turn around. While this may be justification for the reduction of pig breeding, it is not the reason for the government's move. They are concerned only with complains by the local population on the pigs and their effect on the environment. However, rather than imposing regulations to improve farm conditions, they imposed instead a quota for pig breeding per state. Producers have expressed willingness to invest on equipment that cause less pollution but had expressed fear that the government's attitude on pig breeding may cause losses because it is uncertain if they will be evicted the next day. The Malaysian government and population is composed of majority Muslims who regard pigs as 'haram' (eng: forbidden).