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Recent Dynamics of Poultry Production in Nepal: Food Security to Sustainable

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Article in Nepalese Veterinary Journal · June 2023

DOI: 10.3126/nvj.v37i37.55529

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 Dynamics of Poultry Production in Nepal

Recent Dynamics of Poultry Production in Nepal: Food Security to

Sustainable Production
R. Neupane1,* and K. Kaphle1
1
Paklihawa Campus, Institute of Agriculture and Animal Science,
Tribhuvan University, Nepal, 32900
Corresponding author: Rajesh Neupane, rajeshneupane7@gmail.com

ABSTRACT

Poultry sector in Nepal is growing rapidly and contributes a significant share in the agricultural
GDP. In this context, we present major push factors and challenges and interventions required to
sustain the poultry farming in Nepal. Poultry sector has observed a huge growth in last two
decades (2000-2020). During the same period, government policies and strategies including Bird
flu control order 2064 were also formulated to develop the poultry sector. However, transient
layoff was observed in the past decade (2010-2020) due to several crisis such as outbreaks of Bird
flu, Earthquake, unofficial blockade from India and lately COVID-19 pandemic. Moreover,
ineffective government relief packages in the crisis further exacerbated the situation. Nevertheless,
some initiatives such as livestock Insurance were taken to mitigate potential losses. This review
identifies reliance to foreign countries for feed ingredients, lack of integration of native breeds of
poultry in mainstream market, fragile pricing of poultry products, and lack of stringent
governmental rules/regulation/standards/acts to develop the poultry sector as major challenges
for the poultry industry in Nepal. These gaps need to be fulfilled to develop the poultry sector
further in Nepal.

Keywords: Challenges of poultry industry, Growth, Nepal, Poultry

INTRODUCTION

The poultry sector in Nepal has sustained through the ages and has shared a significant portion of
the Nepalese economy. Nepalese indigenous breeds of poultry like Sakini and Ghantikhile have
been associated with Nepalese households for past centuries and continue to the present day.
Poultry sector alone contributes 4% (CBS, 2012) to gross domestic product and 8% to agriculture
gross domestic product, with a total investment of over NRs 80 billion and direct employment for
1.5 million people (CBS, 2018) . The introduction of improved breeds by American Citizen Aid
in 1959 has been a benchmark for the poultry sector in Nepal (Mishra and Spradbrow, 1991).
Almost half a century after the introduction of improved breeds, Nepalese poultry has grown
exponentially with the integration of modern farming practices (FAO, 2014; Mishra & Spradbrow,
1991).

Nepal ranks 92nd in the worldwide egg production and 112th in poultry meat production (FAO,
2014) which justifies the fact that the poultry sector is an emerging agribusiness in Nepal and can
be a source of the cheapest animal protein. Apparently, Nepalese poultry sector has seen vibrant
growth, however, the backyard poultry sector still seems to have a significant share in total poultry

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population. This article aims to present recent progress and changes in the poultry sector of Nepal
and correlate these changes with the premise behind them in a rational way.

MATERIALS AND METHODS

Literature review were conducted using various sources; scientific publications, newspaper,
reports, governmental publications, non-governmental publications (FAO, Heifer International,
and Hellen Kellen International), magazines, and proceedings from conferences and symposiums.

RESULTS AND DISCUSSIONS

Fig 1: World cloud with keywords used in article

Stages of the poultry sector in Nepal: The introduction of improved breeds from New Jersey,
USA for cross-breeding purpose (200 cocks and 1500 hens) was the first step toward
commercialization of poultry industry in Nepal. (Mishra & Spradbrow, 1991). Since then many
policies, programs, and strategies have been formulated to uplift the poultry industry in Nepal.
(FAO, 2014)

Fig 2: Chart showing Stages of Poultry Production in Nepal.(FAO, 2014; Rijal, 2018)

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 Dynamics of Poultry Production in Nepal

Growth of commercial poultry farms over the period of 1974-2015 in Nepal

Fig 3: Graph showing establishment and registration of commercial poultry farms (CBS, 2018)

Nepal sees exponential growth of poultry sector in the decade 2004-2013 (CBS, 2018; FAO, 2014).
The burgeoning poultry sector can be attributed to factors like political stability after the decade-
long Maoist conflict (1993-2003), change of attitude among Nepalese consumers to consume
poultry meat, increase in tourism, increased demand for poultry meat and eggs, and acceptance
and integration of modern technology supported by the governmental and non-governmental
sectors.

Fig. 4: Chart representation of the governmental policies over a period of time which are directly
or indirectly related to the Poultry Sector.

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Nepalese Vet. J. 37: 179 –190

Governmental policies to uplift Nepalese poultry industry

The then HMG (His Majesty’s Government) of Nepal had formulated the different policies to
uplift the poultry industry in Nepal. The pace of policy formulation and implementation has
continued since then. The policies drafted and implemented had some impact on the poultry sector
of Nepal but the achievements did not align with goals set.

Major events hampering the poultry sector in a decades (2010-2020)

Fig 5: Major events hampering the Poultry sector in decade (2010-2020)

Bird flu (H5N1): The first case of bird flu appeared in 2009 in Jhapa district of Nepal (Karki et
al., 2014) and has been impacting in the socioeconomy, especially in the microeconomy level
(Karki, 2017). The highest number of outbreaks were recorded during 2012/2013 during which
major poultry producing districts were affected. In these outbreaks, almost 1,84,776 birds were
killed and 1.75 million chickens, 3.05 million eggs, 1, 72,181 kg of feed and 1, 55,550 kg of the
meat were destroyed to prevent spread of virus. (“Farmers Receive Rs 1b for Compensation for
Losses,” 2014). Low pathogenic avian influenza H9N2 has been endemic in Nepal since 2016 and
has caused great loss in commercial meat and egg production.

Earthquake: Major earthquake hit Nepal on April 25, 2015. This had a devastating effect on
Nepalese poultry sector like many other sectors. Earthquake killed hundreds of thousands of birds
and tons of feeds were destroyed. In addition, 100 thousand chicks were destroyed daily from the
hatcheries due to the lack of proper care and lack of employees in poultry farms and hatcheries
(Mahato, 2015; “Nepal Needs ‘$20 m’ to Help Quake-Hit Farmers,” 2015). Thousands of
commercial broilers and layers farmers lost their poultry shed along with live birds in affected
districts. Reestablishment of poultry farms got delayed (“Nepal Needs ‘$20 m’ to Help Quake-Hit
Farmers,” 2015) due to sluggish governmental actions and unofficial trade blockade from India
which occurred after the earthquake. Lack of demand for poultry meat from restaurants, schools,

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and banquets has led to transient decreases in poultry meat prices. After a month of post-
earthquake, the supply of poultry was shrunken by 30%-40% due to which there was an increase
in poultry meat (Rs 290/kg) and egg prices (Rs 280/crate) (“Chicken Prices Soar on Drop in
Output,” 2015).

Unofficial Trade Blockade from India: Nepal claims to be self-reliant in poultry meat and eggs
but the majority of poultry inputs (more than 60% of corn and 90% of soy cake) comes from India.
The unofficial Indian Trade Blockade in December/January 2015/2016 badly affected the poultry
industry. The lack of fuel, feeding raw materials (corn and soy cake) led to the destruction of one
million newly hatched chicks and further delayed breeding of new chicks (Bashyal, 2015). During
the blockade time (four and half months), some of the poultry farmers imported feed from
Dhangadhi and Biratnagar border points informally paying four times higher than the actual cost
(Yadav, 2016).

COVID-19 Pandemic: Amid of COVID-19 pandemic, Government of Nepal initiated a

nationwide lockdown on 24th March 2020 which was partially loosened on 14th June 2020 except
for schools, hotels, seminar halls, tourist spots, and banquets. The dearth of demand of chickens
and eggs due closure of restaurants and school, public fear to consume animal source food, people
busy buying daily consumable goods, and misinformation circulated by online media—corona
virus spread through the chicken—had led to sharp decrease in the price of chicken meat (Rs 70-
80/kg) (Prasain, 2020b) Many farmers buried their birds due to the lack of market and feed
supplies, some even sold birds on piece basis (Rs 25/ piece ) during the first 11 days of lockdown
period (Prasain, 2020a). In the first 2-3 weeks of lockdown, the poultry sector faced a loss of Rs
220 million daily (Kafle, 2020). After a month and a half after embarking on a nationwide
lockdown, there was an extreme shortage of chickens in the market due to low production of chicks
in the hatchery, decreased feed production and many farmers did not keep the next batch of chicks.
These conditions favored a skyrocketing of price of finished marketed chicken meat i.e. Rs. 450-
500/kg which is 1.6 times the poultry meat price at the beginning of lockdown days (“Chicken
Price Skyrockets to Rs 460 per Kg in the Valley,” 2020; Prasain, 2020c).

Some government and non-governmental intervention to uplift the poultry sector and
management of the crisis

Avian Influenza: After a massive outbreak of avian influenza in 2012/2013, the Government of
Nepal declared a bird flu emergency and banned all imports of poultry-related items including live
chicks, meat, eggs, and even feed. The government provided Rs. 170 per bird as compensation for
the loss (“Farmers Receive Rs one billion as Compensation for Losses,” 2014). Risk based
surveillance system is implemented in Nepal, and the country is divided into 3 risk categories—
high, medium and low. The massive screening program conducted by the Nepal government
helped to contain the further Avian Influenza outbreak in the country. As of the recent outbreak in
Kathmandu and Bhaktapur (2019), the government provided 75% value of destroyed chicken
marketed amount which equals to NRs 81,086,550.50 (Bird flu compensation report, 2019).

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Fig 6: Bird flu control measures

New Castle disease/Ranikhet disease control: This disease has shown its effect on the native
birds. The death and low production of eggs are correlated to the ND in rural and urban settings.
Various works have been done by governmental and non-governmental agencies to prevent this
disease outbreak and vaccinate backyard poultry in Nepal. The first ever vaccination of the ND in
Nepal was made in the then CARD (central animal disease research division and Pakhribas
Agricultural Research Center. Likewise, ND (lasota) was made in 1998 and ND (heat stable I2)
was made in 2008 in the National Vaccine Production Laboratory. Commercial flocks are widely
vaccinated as per the vaccination guidelines, however, the vaccination at Backyard Poultry seems
challenging. Backyard Poultry being a source of sustainable protein supplementation and reared
by marginal farmers as a cash crop is of huge importance in rural settings. The major threat to
backyard poultry is ND disease, and to mitigate this problem, Nepal's government launches ND
vaccination program. The SUAAHARA project by USAID has vaccinated 3 lakh backyard poultry
in 3 districts--3 times with 10 lakh doses, as a result of which there is a reduction in mortality rate
form 80% to30%. With the success of this program, an extension of vaccinations was done in 26
districts (R. K. Neupane, 2018).

Earthquake and Informal Trade Blockade from India: The situation in Nepalese poultry
industry is worse in times of earthquake and further exacerbated by the Indian blockade. The
government has passed a relief package for disaster hit farmers. However, the relief package was
further delayed by irresponsible bureaucracy and Indian Blockade.

Insurance for Poultry Farmers: With growing poultry farmers, and increased frequency of
outbreak of disease (bird flu), the Nepal government has started an Insurance policy for livestock
farmers with great incentives. For the broiler farmers they have to only 1.5% of total insurance
premium amount and for layers and parent farmers they have to pay 5% of the total insurance
amount. Insurance should be renewed with a new batch of flocks on the farm (“Plant and livestock
insurance,” 2019).

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Rural Community Targeted Programs: Governmental and non-governmental organizations

have focused on rural poultry enhancement for food security and nutrition balance. Different
programs - cooperative poultry farming programs, mini hatchery establishment programs,
backyard poultry and dual-purpose poultry promotion programs - and small farmers targeted with
poultry farming programs have been run by government and non-government agencies (Livestock
Statistics of Nepal 2016/17, 2018).

Major challenges for poultry industry in Nepal

Native / Indigenous Breed : Nepal holds three major indigenous breeds namely: Sakini, Ghanti
Khuile (Naked Neck), and Pwankh Ulte (Frizzled Feather), which are known as major native
poultry genome stocks. Among the three, SAKANI holds the major share with 50% of total
birds. These breeds have the pros like well adopted for various altitude and temperature ranges—
Temperate Hills to Tropical Terai have disease resistance, good scavenging capability and can
live without regular feeding. However, they possess some cons like low dressing percentage, low
hatchability, low egg production, and high chick mortality. These birds are not found in the
mainstream poultry market, it is a huge challenge to bring the native birds into the commercial
market and make them competitive with the exotic breed of chicken.

Feed Ingredients: Nepal imports the majority of poultry feed ingredients from the neighboring
country (India).

Fig 7: Import of feed Ingredients

Almost 60% of feed ingredients are imported in Nepal, with maize being the highest to be imported
at 46686 metric tons. Importing feed ingredients has a direct effect on poultry products like meat

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and egg. (Rijal, 2018). As per NFIA (Nepalese feed Industries Association, 2017) NRs 1.8 bililon
worth of feed supplements are imported by the feed industry (Singh, 2018).

Fragile Pricing: Nepalese Chicken meat and egg is fluctuating and many variables determine the
price. Likewise, the presence of a plethora of middlemen in the poultry product value chain has
also affected the pricing of poultry products (Prasain, 2020c; Shrestha et al., 1998). In addition to
this, a major factor for this fragile pricing is lack of proper intervention by the government and
consumer association.

Veterinary Services and Diagnostic facilities: Veterinary labs and diagnostic facilities were
found to be the same as those that were present in the then HMG Nepal, but only little or no change
has been made to increase the facilities. Nepal still struggles to implement the federal system of
administration, which has also aided poor governmental services. The dearth of skilled manpower
in diagnostic and surveillance facilities along with technical equipment’s (molecular level) had
crippled the veterinary service sector. Only one Avian Designated laboratory NADIL (Nepal
Avian Disease Investigation Laboratory) which was established in 2004, can’t handle all the
surveillance and diagnostic cases. Thus, the burgeoning poultry sector is not in line with the growth
of surveillance and diagnostic facilities
Veterinary Acts, Standards and Regulations: Nepal has drafted numerous acts and regulations
directly tied to animal heath, meat hygiene and animal feed. Some of these important acts and
standards are listed below:

Table 1. Different acts and standards related to Poultry sector in Nepal (Rijal, 2018)
Acts

1. Animal health and livestock services act, 1998 and regulation, 1999
2. Nepal veterinary council act, 1998 and regulations, 2000
3. Nepal Agriculture Research Council Act, 1991
4. Feed act, 1976 and regulations, 1984
5. Slaughterhouse and meat inspection act, 1998 and regulation, 2000
6. Drug act, 1978
Standards

1. Standard for poultry breeding farms: 2005

2. Hatchery standard, 2005
3. Quarantine standard for hatching eggs, 2005
4. Quarantine standard for importation of parent and commercial chicks, 2005
5. Quarantine standard for importation of table eggs, 2005
6. Quarantine standard for importation of hatching eggs, 2005
7. Veterinary standards for biological products, 2006
8. Standard for import and export of meat and meat products, 2007
9. Standards for Broiler Poultry Management, 2007
10. Animal transportation standard, 2007
11. National microbial standards for meat, milk, eggs and MRL of veterinary drugs, 2012

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12. Standards for Import Risk Analysis of Live Animals, Animal Products and Veterinary
Biology, 2016
13. Protocol for import export recommendation, livestock related industry establishment
and sales distribution permission, 2016

Each and every act and standard related to the poultry sector has its own importance and cannot
be neglected. However, the effective implementation of these acts and standards seems
challenging. Many of the acts and standards like MRL (minimum residue limit), drug act, feed act,
are others are being violated due to lack effective implementation and good governance. In
addition, many researchers have found violations of public health-related burning issues (antibiotic
residue and antibiotic resistance) associated with chicken meat (R. Neupane & Kaphle, 2019).

Prospects and necessary future interventions

The recent scenario of poultry industry in Nepal vividly represents its vibrant growth. Some of the
reasons, like preference for white meat over red meat by Nepalese consumers, cheap sources of
protein, and tourism boosts have favored the growth of the poultry industry and continued the build
up momentum. Despite providing a significant share of GDP and employment for more than 1.5
million people, Nepalese poultry sector faces many constraints as discussed. Some future
interventions that can serve a useful purpose are given below:

Feeding materials/ingredients: The majority share of the cost of poultry farming goes to feed
and the use of indigenous and local feed ingredients is a major conflict with the establishment of
self-sustained poultry industries in Nepal. To produce enough (maize and soya) different
approaches like contract farming, cooperative farming, could be carried out. Poultry feed industries
can collaborate with local cooperatives and communities to produce the feed ingredients, which in
turn benefits both the farmers and industries. Probiotech (Nimbus feed industries), had initiated
the contract farming (maize, rice) with the local cooperatives and farmers with the support of
International finance corporation (a world bank group), and GAFSP, till 2015 it had trained about
4000 maize farmers with 70% of them adopting new technology with an increase in 20% of local
maize productivity (IFC INCLUSIVE BUSINESS CASE STUDY and Probiotech, n.d.). Recently,
a research work on integration of black soldier fly larvae as a protein source in poultry feed was
carried out at Agriculture and Forestry University, which can serve as a good alternative to
imported protein feed, however, a thorough cost benefit analysis cannot be discounted.

Native breed integration in commercial poultry farming: Indigenous breeds of poultry (Sakini,
Ghantikhulae, and Pwankhulte) can be an alternative to imported breeds of poultry. Incorporating
these breeds into the mainstream market from the backyard can be a sustainable alternative to
dependence towards foreign breeds. Different types of genetic intervention like selective mating
and breed hybridization can be done in native breeds for sustainability. Currently in Nepal there is
only one grandparent farm established by Cobb, but only one grandparent farm cannot hold the
demand of hatcheries, thus there is urgent need of establishment of grandparent farm to sustain
chicks demand.

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Antibiotic resistance and residue surveillance: Many researchers have pointed out that antibiotic
residue in poultry meat is higher than the minimum residue level set by WHO. 24.66% of marketed
broiler meat in the Kathmandu metropolitan city has shown the presence of antibiotic residue, in
a study conducted in 2019 (Maharjan et al., 2020). However, more surveillance activities are
needed to understand the situation better. In order to ensure safe and quality production of poultry
products, periodical screening of poultry products for residue and resistance is inevitable. There is
also an urgent need to establish a separate veterinary drug enforcement agency.

Vaccine and Drug Manufacturing: Nepal imports huge amounts of poultry vaccines from India
and other countries. The National Vaccine Production Laboratory produces vaccines for various
poultry diseases like New Castle/IBD, however, many hatcheries and large scale poultry farms are
using imported vaccines. Biovac Nepal, a private company, is also producing some poultry
vaccines Veterinary and poultry drugs (antibiotics, water acidifiers and liver tonics) are imported
from India and other countries though there are few Nepalese drug manufacturers. The import of
large quantities of vaccines and veterinary drugs suggest that either Nepalese manufacturers are
not competent enough (quality and reliability) or they cannot supply the demand by Nepalese
market.
Shift to environmentally controlled housing: The dynamics and contemporary scenario of
poultry market in Nepalese context suggest that in order to sustain the farmer capability for the
long run, transformation from the traditional housing system to modern environmental housing is
inevitable. Now, well-established business tycoons: Chaudhary Group, Golcha Group, along with
other business enterprises from FDI (Foreign Direct Investment) are keeping an eye on the
fortuitous poultry business, as this type of investment can provide consumers with safe and quality
meat products but can hamper small-scale poultry farmers as they are obliged to change their
business or shift to costly modern farming practices.

CONCLUSION

To sum up, the Nepalese poultry market has huge potential for growth and expansion with
flexibility for product diversification. However, things like fragile pricing, import of high amounts
of feed ingredients, diagnostic and surveillance facilities, and native breed integration should be
solved in order to sustain the Nepalese poultry farmers in the long run. The drafting and launching
of relief packages for crisis hit farmers (COVID-19) should be carried out in an immediate manner
to save the farmers from bankruptcy. In addition to this, there should be regular monitoring and
evaluation of the governmental policies/acts/standards/specifications to ensure safe and quality
poultry products.

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