Good potential in 'Broiler Business'
by Muhammad Zubair anwar, Social Sciences Institute, NARC Islamabad
Published in "The News" Rawalpindi / Islamabad, Lahore and Karachi on October 03, 2005
Livestock has emerged as a rapidly growing sub-sector of agriculture in the country. It has almost achieved the envisaged target of eight five year plan (1993-1998). The poultry production has grown at 22.8 per cent per annum and milk production has increased by 6.5 per cent. According to the 1997 report of National Task Force, despite the stagnation of agricultural crops, the livestock sector has achieved an increase of 21 per cent during the last decade and has also been instrumental in ensuring some alleviation of poverty in rural areas.
To further reduce poverty and upgrade the standard of the poor people of rural areas, the business of broiler farming has enormous potential. Areas where the level of poverty is comparatively higher than the irrigated areas, the business of broiler farming can help to increase the income and employment status of the rural population. But unfortunately, the sector faces technical and marketing problems created by the stakeholders themselves, which in turn has shattered the confidence of the farmers and has also reduced the volume of broiler farming.
The marketing of broiler is in the hands of few functionaries who also determine the prices, which bounds the farmers to sell their produce at the manoeuvred prices. The farmers are bound to do this to save the cost of production that increases rapidly after the recommended growth period of six weeks. An empirical study was organised to review the marketing issues impeding development of the industry and suggested their appropriate solutions. Findings of the study highlighted the following marketing practices as problematic for the farmers: disposals of produce, rapid price fluctuation, under weighing, high rates of commission, and inter city trading. Let’s discuss these issues in detail.
Disposal of Produce
Farmers mainly have three outlets for the disposal of their produce namely main market, town market and farm. About seventy per cent of the producers sell their products in the main markets. At town and farm level, the retailers and feed dealers work as intermediaries. Their procedure of disposal, attitude, and selling at low prices are highly criticised by the 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 Rates of Commission
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 produce 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.
Inter-city Trade
Inter city marketing of broiler is a common practice today. Intermediaries’ import birds from other cities and sells them in the local market at high prices during shortage. But the survey revealed that this practice is not only done during the shortage period but rather it is a common practice of intermediaries. They do this to manipulate the market situation in their favour and this has created uncertainty among the farming community.
The study also gave some suggestions for the improvement of broiler marketing system, which are as follows:
In order to safeguard the interests of the producers, market information of supply and demand along with the price of produce should be regularly and effectively disseminated.
A market committee should monitor malpractice of the intermediaries.
The association of the farmers needs to perform multi dimensional functions to stabilise the price mechanism.
Excess production should be exported to international markets. The government needs to design an export oriented policy and remove the hurdles in export procedures.
Package processing and storage should be improved which can gradually stabilise the demand and supply situation and minimise the seasonal fluctuations. It would also stabilise the price of produce and the producers would be able to plan their production cycle more effectively.
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