POULTRY INDUSTRY API PRESENTATION -TALHA KHAN -MOID SHAHEEN -AHMAD MUAZ -HASSAAN HABIB -MOAZZAM AYAZ
OVERVIEW OF THE POULTRY SECTOR OF PAKISTAN• Poultry Pakistan was kept as backyard business for household needs till the early 60’s• In 1963 a national campaign was launched to enhance the production of feed products in the country• Under this campaign the government announced a tax exemption policy from the income derived from poultry• PIA in collaboration with Shaver Poultry breeding farms of Canada started the first ever commercial hatchery in Karachi in 1964
OVERVIEW OF THE POULTRY SECTOR OF PAKISTAN• The Government made major policy decisions to provide all possible facilities to poultry industry in the annual development plans in 1965-75 . The incentives provided to poultry farmers/poultry industry included. – Import of flock and incubators was permitted under free list. – Allotment of state land on lease for poultry farming at very nominal rates. – Established poultry research institutes at Karachi and Rawalpindi through Food and Agricultural Organization (FAO) of the United Nations to facilitate research services specifically concerning disease control programmes
OVERVIEW OF THE POULTRY SECTOR OF PAKISTAN– Two meatless days were announced to encourage poultry meat consumption.– Subsidy on grains to form low cost quality ration, through UNDP-grains.– Loan through ADBP for the construction, of poultry sheds.– Established directorates of Poultry Production in Karachi and Punjab to provide extension services to the poultry farmers.– Establishment of Federal Poultry Board to coordinate government and industry activities in the poultry business.
The subsequent development of Pakistan’s Poultry Industry can be divided into four phases• The Introductory Period 1965-1970.• Institutional Development 1971-1975.• The Production Boom 1976-1980.• Depression and Adjustment 1981-1990.• 1991 to Now.
Human Resources1. Pakistan produces about 530 million birds annually.2. Poultry sector is one of the most organized branches of the agro based sector of Pakistan. Its growth rate is 10-12% annually.3. This sector generates employment (direct/indirect) and income for about 1.5 million people.4. At present over 50 Billions of agriculture produce and Bio products of Agriculture are being used in poultry feeds.5. In our Country per capita consumption of meat is only 7 KG and 60-65 eggs annually.6. Whereas developed world is consuming 41 KG meat and over 300 Eggs per capita per year.
Traditional Rural Poultry• Almost every rural household and some urban households raise poultry• Poultry Population 73.65 million• Contribution to egg production 41.6%• Contribution to meat production 24.3%• Breeds: 3 local, 2 imported• Hatching: Brooding hens• Feeding: Scavengers• Important Diseases: Newcastle disease, Fowl cholera, Fowl pox Census 2006
Intensive (Commercial) Poultry• Status – Share in poultry meat 75.7 % – Share in eggs 58.4 % – Grand parents 5 companies – Breeders 6.8 million – Layers 25 million – Broilers 434 million – Farms 25,897 – Hatcheries 305 – Feed Mills 154
Rural Poultry• 25-28% of total poultry production is rural.(desi)• Rural poultry is more expensive as compared to commercial.• Higher protein value, better for health, less exposed to epidemic diseases.• Raised in clusters of 4-15 animals by individuals or families.
Distribution of meat Demand (Gallup) Chart Title Chicken Beef Mutton
Determinants of poultry demand• Household income (0.001)• Family size (0.653)• Bird Flue (-1.583)• Price (-0.418)
• Per capita consumption: Pakistan (7kg)/(3kg) Canada (32kg) USA (41kg) India (2 kg)• Daily protein requirement (102.7 grams), in Pakistan average is only 69.61 grams• Sources of animal protein (milk, beef, eggs)• Approximately 66% of Pakistanis are protein deficient
Consumption• Household• Commercial (restaurants, hotels, fast food chains)• Demand particularly surges in Ramadan and during marriage season.• Government policies also affect demand of poultry meat.• Recently government decided to impose RGST on poultry feed which will increase the overall price by almost Rs 40 per kg and as a consequence demand will fall• Similarly govt’s decisions like one dish add marriages also affect poultry demand
Farm meat production in Pakistan (kilotons Farm meat production in Pakistan (kilotons
Players in the Industry• Feed mills• Poultry farms• Vaccine and medicine production houses• Hatcheries• Wholesaler• Retailer• Middlemen (Distributors)
Farming• Open house farming (non control-shed driven) have less capacity• Control Shed driven farms, single, double or triple• 30000 birds per control shed• Open house capitalize on little cost of production
The Supply ChainFarm Arti Wholesaler Retailer Consumer (End user)
Vertical and Horizontal Integration• Branding• Big Players, K&Ns, Mon Salwa and Season’s Menu are vertically integrated and capitalize on their strengths• Barrier to entry in the industry• Horizontal in small businesses
Firm Operations and Human Resources• Retailers : Simple operations. Semi skilled, usually permanent workers.• Wholesalers : role of Artis. Unskilled workers do the job.• Feed Mills : Highly skilled personnel required for handling the production of feed• Hatcheries : Highly skilled, permanent workers. Incubators and brooders.
• Farms:• Advantages of computerized control sheds• Open house farming *Per control shed
Pricing and Competition• Almost no price wars• The only determining factor is the availability of your flock in the market at the right time• Knowledge regarding how to capitalize on demand• From Ramzan upto Eid-ul-Zuha, Demand rises
• Price is purely set on demand and supply conditions• No government regulation whatsoever• In days of high demand, when DCO is usually on a holiday, nobody is there to control the price• Farmers declare the number of birds available that they would supply and the wholesalers make estimates of demand from retailers.
Poultry Feed Industry• First Feed Mill was setup by Lever Brothers in 1962 at Rahim Yar Khan• Second Feed mill Ani Feeds was established in 1967 a Gujarawala• Up to Date, 141 feed mills are operational producing 2540 thousand tons of compound feed per annum• 60% of total Cost is spent on feed
Contd…– 70% of feed is provided by Feed mills– Ingredients: Wheat, Rice, Maize, Sorghum Barley, Sea Food, Pulses and Vitamins– Consumption of feed per day for a chicken is 124- 135 grams– Previously for 8 weeks old chicken Food Conversion Ratio (FCR) was 3kg of feed to 1kg of live weight
R&D in Feed Industry• Modified feeds that contain balanced Diets (Medium Protein Diet)• Automatic Batch Controller and computerized manufacturing program has minimized human involvement and reduced chances of impurity• Export Quality Feeds• In present the Feed conversion Ratio (FCR) has dropped below 2kg of feed per 1kg of live weight
Affect of 2010 floods on poultry sector of pakistan• In late July 2010 Pakistan faced worse floods in its 63 years history• About 20 per cent of Pakistan, a country the size of England, was devastated by weeks of flooding.• 17 million acres or upwards of 30 per cent of the Pakistan’s cultivated farmland and about 20 per cent of Pakistan’s total agricultural production was affected or damaged by this flooding.• Millions of head of livestock (i.e. cattle, sheep, buffalo, goats, donkeys, chickens, et c.) were killed or threatened due to the flooding.
• The United Nations Foreign Agricultural Organization has asked for $5.7 million USD in emergency aid for feed and medicine relief for livestock.• About thirty countries have responded offering up $700 million USD in relief with the Asian Development Bank offering Pakistan $2 billion USD in emergency loans.• Pakistan had been seeking Malaysia’s expertise and technology in slaughtering, processing, and commercial marketing.
• the Competition Commission of Pakistan (CCP) issued a Show Cause Notice to the Pakistan Poultry Association (PPA) in July 2010.• After being prompted by numerous consumer complaints the CCP conducted a raid of the Pakistan poultry Association’s (PPA) offices in Islamabad, Lahore, and Karachi• Upon investigation the CCP found that the PPA had been serving as a hub for the various sectors (i.e. hatcheries, feed manufacturers, breeders, broiler farms, layer farms, etc.) helping to control production levels and fix prices.• The CCP found the PPA in violation with Section 4 of the Competition Ordinance 2010.• PPA was issued a penalty of $50 million Rupees ($577,861 USD) for operating like a cartel in August 2010.
BENCHMARKING WITH INDIA• Pakistan’s agriculture sector’s contribution in national GDP is 21.0%,• Livestock share in national GDP is 11.4%• Livestock sector contribute approximately 53.2%of the agriculture value added.• Livestock Population in Pakistan: (2009-10) – Pakistan possesses some of the finest dairy breed like NiliRavi , kundi buffalo ,Red – Sindhi and Sahiwal cattle and more than 30 small ruminants breeds . – Livestock population include Buffalo 30.8 ( Million), Cattle 34.3 M Goat 59.9 M , Sheep 27.8 M , and poultry 610.0 M.
Poultry Industry in India• one of the fastest growing segments of the agricultural sector in India today• production of agricultural crops has been rising at a rate of 1.5 to 2 percent per annum, that of eggs and broilers has been rising at a rate of 8 to 10 percent per annum.• India is now the worlds second largest egg producer and the eighteenth largest producer of broilers
• Transformation from a Backyard Activity to a Major Commercial Activity• Regional Variation in Poultry Development• Growing Production of Eggs and Broilers• Increasing Scale of Operation• Structure of the Poultry Industry• Concentration of Poultry Units Around Cities and Urban Centers
• Low Per Capita Consumption• Slow Changes in Consumption Habits Exports• Employment• Issues Relating to Animal Welfare and Environmental Pollution• Constraints on the Growth of the Poultry Industry• Policy Measures
Recommendations• The government should take measures to ensure that the• meat is disease free.• ‡Processing plants should be made responsible for producing• hygienic, nutritious and healthy chicken meat.• ‡Production of poultry meat as per international standards• should be ensured.• ‡10% import duty and 16% sales tax on evaporative cooling• system must be with drawn to make the poultry business cost-• effective
• Investment to modernized the industry should be encouraged.• ‡Fiscal incentives should be provided and long-term policies• should be made and implementation should be assured.• ‡A committee of competent people should also be set up to• monitor this sector and help in bringing this industry at par• with the international level.• ‡Health centers should be opened to provide veterinary• services