Market Intervention Reduces Broiler Production21 February 2014
PAKISTAN - The total production of broilers in the country through hybrid intensive poultry production declined by 20 per cent in 2013 to 816 million birds against production of 1.2 billion of 2012 mainly due to closure of several farms particularly in Punjab following the government’s intervention in the market.
"During 2013, a number of farms had closed down because of losses, following the market interventions by the KP government which adversely impacted the revival of the closed farms," the poultry industry representatives said.
According to The Nation, the Pakistan Poultry Association challenged the government directives of ‘official control of rate fixation’ in Supreme Court which held the previous orders of the High Court in abeyance. Hence, price control orders were withdrawn, giving breathing space to the poultry producers.
Pakistan Poultry Association Punjab chairman Raza Mehmood Khursand stated that it is quite welcoming that market intervention, which is counterproductive for the sector, has come to an end.
During the year 2012, the cost of a day-old broiler chick as presented by the Commissioner Animal Husbandry, Government of Pakistan to the High Court of Peshawar was worked out at Rs31.27 against which the selling price was Rs 20/chick, thus causing a loss of Rs11.27/chick to the producers.
The cost of production was much higher as the figures of the ministry did not include financial costs, admin and overhead costs, nor mortality suffered due to epidemic disease outbreaks, which occurred almost every year, were taken into account.
Mr Khursand said that the cost of broilers as submitted by the ministry was worked out to Rs 132.50 against which the average selling price was Rs 144.60, causing a loss of Rs 12.10/kg. Likewise, the Association contested the cost of production on the above grounds. The impact of heavy losses resulted into closure of a number of both parent stock farms and broiler farms, he added.
PPA former chairman Abdul Basit observed that the end of market intervention by the government functionaries has now helped the poultry sector to register revival of its growth trends. He said that artificial intervention by different govt functionaries would distort the market permanently.
"The market on its own is so strong that its direction cannot be diverted by intervention, eventually the market intervention will cost the consumer very dearly and, of course, many of the producers would be out of business."
Mr Basit said that the price value of products in a free market economy is the only source that issues a directive to the producer to increase or decrease its production.ThePoultrySite News Desk