ISSUES AND ECONOMICS OF POULTRY PRODUCTION  

• Asif Maqbool
• Muhammad Rasheed

 Introduction

Every Government in the world is responsible to provide adequate food to their inhabitants and assured an atmosphere free from hunger and malnutrition. The food security objective becomes more important when 15-20% of the world population is under threat of not getting sufficient food to meet minimum nutritional requirements for a healthy and productive life. The poor nutritional status is prevalent due to lack of sufficient energy and protein in the food or due to not having sufficient food.

Until 1964 poultry production was a cottage industry in Pakistan. The management and production on modern scientific lines was not known and disease control measures were also not sufficient. In 1964, the foundation of commercial poultry production was laid by PIA shaver by introducing new and improved breeds of layers and broilers and by Lever Brothers with the production of poultry feed on modern lines. The Govt. on her part, exempted this industry from income tax and sales tax, allowed export of table eggs, day old chicks and broiler on subsidized rates. Poultry has still remained a neglected and unimportant sideline of our agricultural industry. Productivity of local birds in terms of eggs or returns has been low and was not considered it as a paying enterprise. Principally it was raised as stray birds on which particularly no cash outlay had been involved.

A balanced diet is essential for good health, vigor and productive capacity of the people. Protein plays an important role in the formation of balanced human diet. There are mainly two origins of proteins i.e. animal and plant. The human diet in Pakistan is deficient with respect to proteins of animal origin. At present 66% Pakistanies are deficient in protein. The requirement of protein is 102.7 g per person per day while only 69.61 g per person per day is being used in Pakistan. The existing gap between supply and demand of protein is 33.09 g per person per day. The main source of animal protein in Pakistan is beef, mutton, milk, poultry meat and eggs, respectively. To overcome the gaps between and demand of protein, poultry meat is contributing a dominant share and further its share can be enhanced by improving the profitability of producer and by decreasing prices at the retail level. However, existing infrastructure of poultry sector has capability to narrow down the gap between supply and demand of proteins. 

The cost of distribution from producer to the consumer is very high mainly due to high share of middlemen involved at various stages.  The extraction of abnormal profit by middlemen reduced the profit of bird growers’ and it discourages them to expand the production process. The profit share of middlemen also needs to be reduced in order to lower prices at the retail level.  The objective of the present study is to look at the profitability of different stake holders involved in poultry sector and then to formulate the policy that can distribute profits among different stake holders on rationality basis. We should keep in mind that producers’ cannot be motivated to expand their production system without increasing their profitability.

The paper is organized as follow.  The section 2 discusses the marketing issues and channels of poultry production.  Section 3 explains the data collection procedure and delineates the methodology and section 4 summarizes the results and discussion. Last section illustrates the conclusion.

 Marketing Issues and Channels

The marketing of broiler is in the hands of few functionaries who bound the farmers to sell their product at the maneuvered prices.  The farmer’s can’t take the risk of keeping the broiler after the recommended growth period because after that certain period cost of production increases rapidly than the weight of broiler. After interviewing different stake holders we observed that rapid price fluctuation, under weighing, high charges of commission are the major problem of present marketing system. .

 Disposal of Broiler output

Farmers mainly have three outlets for the disposal of their product namely main market, town market and farm. About seventy per cent of producers sell their output in the main markets. At town and farm level, the retailers and feed dealers work as intermediaries. The procedure of current marketing system was highly criticized by farmers.

 Price Fluctuation

The business of poultry farming is expensive and risky and it is operated on purely traditional lines without any modern marketing facilities. Farmers are producing broilers without foreseeing the supply and demand situation in the market. In high supply situation, prices prevail at low levels and vice versa. Such a situation creates uncertainty in the market and as a result, the farmers are unable to plan their businesses. They are totally frustrated and dissatisfied over the existing price mechanism. Therefore, the farmers jointly suggest for creation of an institution that can properly monitor the market and disseminate market information.

  Under Weighing

The majority of farmers claim that intermediaries do not follow business ethics and try to fetch maximum profit from business transactions. They use many tactics such as juggling with weighing scales, under counting and under weighing to deceive the farmers. In view of this, the farmers suggest a tripartite market arrangement in the form of farmers, middlemen and the government.

 High Charges by Commission Agent

Generally, the main broiler business is operated through intermediaries namely commission agents, feed dealers, and butchers who charge certain amount as commission fee for their services. Farmers for timely disposal of their output use the intermediaries, but they report that commission fees of these intermediaries are very high. Sadly, there is no agency to check such unfair commission rates.

 Marketing Channels of poultry meat

Marketing system remains still in traditional and heterogeneous condition. As a result, producers could not develop direct linkages with the consumers. As a result producers are not getting expected prices while consumers are paying high prices and it is one of the main hindrances to improve the contribution of poultry in protein uptakes. First of all it is important to understand the present channels of marketing system .

 Marketing channels of Birds

Commission agents/Wholesaler is the major player in deciding the price at the retailer’s level. Reasons of non remunerative price to producers are: a) Missing direct linkages between producers and consumers. The missing linkages do not provide chance to producer to understand consumer’s behavior.  b) Lack of investment to develop infrastructure could enable them to reach directly to the retailers. The provision of credit to the bird growers will allow them to reach directly to the retailer and could kick the commission agent out of the process.  Government should also take initiatives to develop laws which can allow producers’ to sell their products directly in market.

To improve the efficiency of existing marketing system a detailed analysis is required to suggest the policy interruptions.  The existing poultry marketing system has been functioning without much attention of planners and policy makers. The present study was planned to look into poultry marketing channels prevalent in the present setup with a view to see their efficiency and suggest remedial measures for their improvement.

 Data Collection and Methodology

The present study was conducted on commercial poultry industry. This source contributes a dominant market share in supply of poultry birds almost in all big cities. However, present study was focused at the local market of Faisalabad city. The nature of the problem deserved much wider focus like that of province or the country as a whole but due to obvious limitations of research viz. time and financial resources, the study was restricted only to 10 miles radius of the Faisalabad city.    

An adequate and scientifically sound sample is essential to yield valid results. By keeping this in view, the information was collected from all those stakeholders involved in the chain of transporting poultry from farm level to ultimate consumers. Thus, a representative sample of commercial poultry producers, commission agents, wholesalers, retailers was taken for detailed investigation. Fifteen commercial poultry producers were taken to collect information on production of birds. Twenty commission agents were taken form the wholesale market. There were no wholesalers of birds in the market. Commission agents act as wholesalers. Similarly, twenty retailers were taken randomly.

For the purpose of getting information, separate questionnaire was developed for each category of respondents. The questionnaire was filled in by direct interview method with respondents. Finally the data collected were tested statistically and analyzed for discussion purposes.