DAWN FRIDAY FEBRUARY 10, 2012

21

Ahmad Fraz Khan

N the last decade or so, the poultry industry in Pakistan has come of ages: the sheer statistics are overwhelming the annual broiler production has reached close to one billion birds that meets 40 per cent of the national protein requirements, while egg production has reached 8.6 billion per annum. The share of poultry in the national meat consumption mix has increased from 16.4 to 24.3 per cent, pushing the consumption of mutton down to 0.616 million tons from 0.649 million a fall of 20 per cent. Currently, the industry carries an investment of over Rs300 billion, with an annual turnover of Rs40 billion, and employs 1.5 million people. The major development in the poultry industry came in 2004-05 when the threat of bird flu almost destroyed the industry. To its credit, the industry took the scare as an opportunity to raise defences against diseases, not only that of the bird flu, but also others like swine flu. Since then, it has matured into a world class business concern, being run along scientific lines. It is the financial and technological strength of the industry that has attained and maintained the bird flu-free status for Pakistan since 2007. There is, however, a flip side: along side its expansion, the industry has consolidated in the hands of some big houses that now cover the entire production line. This trend has led to accusations of cartelisation and money-minting, which became loud enough to draw the attraction of the Competition Commission of Pakistan. The Commission found certain measure of truth in these accusations and slapped a fine of Rs50 million on it in 2009. The industry, once again, took it in its stride, and continued its technological and business expansion to reach a level where it can compete in the world market. Following the bird flu scare, where the industry had to cull millions of birds for two years, it found a technological defence against the disease in controlled sheds that separate the chicks from the seasonal carriers (migratory birds) of the disease. The entire industry quickly moved to these sheds, which multiplied the cost of doing business many times over. Though the industry has insulated itself against one particular disease, it, however, gave birth to new trends that had their own cost-benefit ratio. To begin with, the business became highly capital-intensive. Before 2004, it

The highs and the lows

was known as a poor mans business; more like a cottage industry, contributing hugely to poverty alleviation in rural and urban areas of the country. The bird flu epidemic turned the table on the poor and small farmers. Once down, a huge majority of them could not replenish their stocks, and went out of business. As industry went hi-tech confined to the controlled sheds it became highly capital-intensive, needing millions of rupees to set up even smaller sheds. The sheds were necessary because flocks would not survive outside them. This trend drove even the mid-level farmers out of the race, with the entire business started concentrating into a few wealthy hands. The entire range of the business poultry-feed, grandparent stock, parent stock, day old chick, broiler chicken, and eggs went into the same hands. The figure, as furnished by the industry to the Competition Commission of Pakistan (CCP) in 2008, showed 20,000 broiler and 6,000 layer farmers, 150 hatcheries and 141 feed companies operating in the country. However, over 60 per cent of the market share, as documented by the CCP, is held by a few big houses, which are now involved in the entire range of the business. The second trend that the industry witnessed was its concentration in the Punjab, particularly around the city of Lahore. The major national concentration of business is within 30 miles of Lahore. Karachi, which houses around 40 per cent of the total urban population of Pakistan, should have seen a huge development of business around it if normal commercial sense was to prevail. It, however, lost initiative to Lahore because of continued law and order problem there. This major business activity around Lahore has its own consequences; it keeps the market suppressed in and around the city and high in other parts of the country. Having attained a certain level of technological and scientific advancement, it may be time for the industry to develop processing hitherto a relatively neglected part, with only two per cent of the total production being processed by two big business houses. The processing part is necessary for the industry because without it, it can neither bring stability in the domestic business nor can export poultry products to foreign markets. The international market, after the bird flu scare, now accepts only hygienically processed chicken for health reasons. Thus, the industry now has to move to invest in the processing and value-addition facilities. It is precisely for this reason that the industry, which has technological wherewithal to compete in international market, has not been able to claim its share in the world. Before the bird flu scare in 2004, poultry exports from Pakistan stood at a healthy $20 million. After all that technological and fiscal investment in the industry, the exports have come down to almost zero. The industry, as usual, blames the government for failure to give incentives to exporters or even go for necessary bilateral and multi-lateral agreements to allow such exports from Pakistan. It wants the government to initiate the process of getting Pakistan approved as a meat exporter in halal food importing countries as it sees a great potential for value-added chicken products in the European Union, the Gulf Cooperation Council countries and the North America. The international trade in halal meat is estimated to be worth $300 billion, with Pakistan having almost no share. The industry has since long been asking the government to disallow poultry farm clusters through a law to space out chicken farms at least 1.5 kilometres apart to reduce the risk of the spread of diseases among various poultry flocks. But the government has not moved on the issue, which threatens the industry with different disease. After all, exhaust fans in these sheds bring in as much air as they throw out. Most of the diseases being air-borne, close sheds could easily transmit diseases to each other. Such a law certainly makes sense, but has still not been enacted. The government, on its part, maintains that it is a completely private concern, and the industry should find its way to international consumers rather than looking for official help. Though it promises to keep a high and strict duty regime to protect the local industry, it also expresses helplessness as it has to keep lowering duty on the insistence of the lenders and the multi-lateral trade agreements that it is part of. Surely, the industry cannot itself go for bilateral and multi-lateral agreements for allowing imports in others countries and the federal government must create such a legal platform for the industry. The federation can also take a cue from Punjab, which recently launched a multi-billion rupee programme to make 15 agriculture and livestock products acceptable in the world market. Under the supply chain management programme, thousands of agriculture and livestock farmers will be trained and their farmers certified for export. The federation must start such elaborate plans for other products as well, poultry included. But the industry should also come forward, and invest in internationallyaccepted processing facilities. After all, it is in its benefit to look beyond the domestic market and increase its profits. Between July 2007 and March 2011, the industry helped the government to put up 10 well-equipped labs, 40 regional

Having matured into a world class business concern in the last few years, the national poultry industry has also faced allegations of cartelisation and money-minting. The bigger worry, however, is its inability to take the next step forward that will convert it into an exporting industry
surveillance centres and 66 rapid response units to ensure that Pakistan retains its bird flu-free status. It needs to initiate the second part of the initiative and go for putting in place processing facilities with the same spirit. The poultry industry, with the help of the government or independently, should put up an elaborate plan and mechanism for supply chain improvement, certifications and traceability a latest license for export to the world market. In order to do that, the industry now has to adopt a strict regime of food safety; the entire supply chain has to weave in demonstrable safety measures and get certifications for the purpose. Both the industry and the government need to shoulder their responsibilities towards the sector. It is their joint responsibility to ensure that the quality of meat is safe, disease-free and healthy. Processing plants are responsible for safe, hygienic, nutritious and healthy chicken meat. The production of poultry meat as per international standards should be ensured even for the domestic market. The importance of the poultry can hardly be exaggerated. It is still the cheapest source of animal protein for the Pakistanis. If developed further, the industry can remove the national protein deficit: average daily animal protein consumption in Pakistan is only 17gram per capita against international minimum requirement of 27 grams.

An election is coming. Universal peace is declared, and the foxes have a sincere interest in prolonging the lives of the poultry. George Eliot

Faiza Ilyas

OULTRY products have assumed greater significance in Pakistans meatconsumption scenario as the other sources of animal protein mutton, beef and fish are literally out of the reach of the masses in view of the ever-rising prices. This is not to suggest that poultry prices have not gone up, but, comparatively speaking, they are on the lower side. Despite preference for the white meat, however, the per capita consumption of poultry meat per annum is extremely low in Pakistan (4-6kg) compared to the developed countries (25-30kg), though there has been an increase of about 138 per cent in poultry meat consumption over the last decade. This basically means that the market is up and can look forward to even better days ahead. People directly involved in the

How white is the white meat?

business take credit for what they called making provision of poultry products possible at a price that really doesnt include the impact of inflation. The situation, they say, has to do with the significant growth of the poultry industry that has largely happened without helpful government policies. The viewpoint is supported by figures that the share of poultry in total meat production now stands at about 30-40 per cent and the poultry industry is stated to have a growth rate of 8 to 10 per cent annually. The increase in poultry consumption and production, experts believe, should raise concerns related to the quality of poultry products, which, they say, is direct-

Concerns related to the quality of poultry feed, though denied by many in the industry, are common among the consumers
ly linked to the feed provided to the birds. Feed, it is said, accounts for 80 per cent of the cost of poultry production and right now about six million metric tons of poultry feed is being produced in the country. Of the total, 82 per cent is manufactured in Punjab, while the remaining 18 per cent comes from Sindh. The feed requirement for Khyber Pakhtunkhwa and Balochistan are mainly met by Punjab. To a question about what constitutes poultry feed, Dr Jameel Abidi, heading the nutrition division of the Poultry Research Institute (PRI) in Karachi , said that the major portion was of grain and the rest comprised plant byproducts, vegetable protein, animal protein and molasses in addition to vitamins and minerals. The feed is given depending upon the type of bird, its age and

its nutritional requirements. The samples often brought for examination are found having low protein and carbohydrate levels and there is hardly any complaints related to adulteration or contamination, he said, adding that feedmillers were themselves very cautious about the ingredients of the feed as the buyer wont buy the product if it was harming his birds, he argued. Regarding the institutes services, he said the institute, set up with the help of the Food and Agriculture Organisation in the 1970s, provided free assistance related to pathology, nutrition, incubation, housing, management and marketing to the farmers. There was, however, no provision

for manufacturing standardised feed at the institute. In the absence of any quality control checks from the government side, a number of concerns exist among consumers regarding the quality of poultry feed. Major concerns are related to the quality of blood meal and fish meal provided to the birds as a source of animal protein and the high use of antibiotics that leave residues in the poultry, thereby making the product unfit for human consumption. There are also some concerns or misconceptions related to the methods adopted to increase the growth potential of the bird. Despite being an agricultural Continued on Page 22