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AN OVERVIEW OF POULTRY INDUSTRY IN PAKISTAN

This presentation will cover mainly …

1-- Introduction
2-- History of the poultry industry in Pakistan
2.1-- Introductory period (1965-1970)
2.2-- Institutional development phase (1971-1980)
2.3-- The depression and adjustment phase (1981-1990)
2.4-- Severe disease outbreaks and re-emergence of the industry (1991- 2000)
3-- Poultry farming in recent times
4-- Current poultry status of Pakistan
5-- Federal government (Pakistan) poultry development policy
6-- Trade of livestock and livestock products

1-- INTRODUCTION

The poultry industry already has a share of 1.4% in GDP. Poultry can be the change in livestock sector in terms
of food independence, poverty elevation, and can help to boost lives of village population if industry is utilized
to its full potential. https://www.technologytimes.pk/2019/03/12/poultry-industry-headway-pakistan/ (March 12,
2019).

Commercial poultry production in Pakistan started in the 1960's and has been providing a significant portion
of daily proteins to the Pakistani population ever since. During its evolution the industry enjoyed promotional
policies of the Government, but has faced several challenges such as disease outbreaks and retail price
fluctuations. Despite its important role in the country's economy, not a single scientific study is available on its
evolutionary history.

In Pakistan the poultry sector is playing an important role in bridging the gap between the supply and demand
for protein. Commercial poultry farming started in Pakistan in the early 1960s and showed rapid growth over
the decades. The early growth of this sector was the result of the promotional policies from the Government
and the persistency of the poultry farming community. The Government considered the poultry production
chain to be a crucial part of the food processing industry and gave special incentives to this sector, and hence
the poultry sector was declared free of sales and income tax as well as exempt from import duties for a
number of years (Sadiq, 2004).

As a result, during the early 1970s, the sector saw 20-30% growth per annum, and continued to grow at a rate
of 10- 15% in the 1980s. The most important reason for this growth was a vibrant domestic market, due to
which poultry meat consumption increased more than 4% per year (Sadiq, 2004).

In Pakistan, poultry production is one of the most dynamic and well organised sectors contributing 26.8%,
5.76% and 1.26% respectively to total meat production, agricultural sector and overall GDP. In the last few
years, the poultry sector has shown excellent growth and has emerged as a source of employment for more
than 1.5 million people (GOP, 2014).
Up till 1963 there was no concept of commercial poultry rearing, hatchery operation or feed production in
Pakistan. Now it is a developed industry contributing 1.4% of national GDP. It is also the cheapest source of
meat available to public with a huge contribution of 30% of total meat production.
https://www.technologytimes.pk/2019/03/12/poultry-industry-headway-pakistan/ (March 12, 2019).

2-- HISTORY OF THE POULTRY INDUSTRY IN PAKISTAN

Before 1963 native chickens provided the source of eggs and meat in Pakistan, and these birds produce, on
average, 0.769 kg of meat at four months of age (Sahota and Bhatti, 2003a) and lay 30 eggs a year (Sahota and
Bhatti, 2003b). These birds were raised as a backyard activity to meet individual household needs. In 1965-66,
an improved variety of chicken called Lyallpur Sliver Black (LSB) was introduced by the Department of Poultry
Husbandry at the University of Agriculture, Faisalabad. This breed was developed by crossing the native Desi
breed with three imported breeds, namely; White Leghorn, White Cornish and New Hampshire in a two-way
cross breeding program to develop a breed that could survive under the harsh environmental conditions of
rural areas, as well as being capable of producing up to 150 eggs per year (Siddiqui et al., 1979). In the mid
1960's Pakistan International Airlines (PIA), in collaboration with Shaver Poultry Breeding Farms of Canada
established Pakistan's first commercial hatchery in Karachi (Sindh Province). At the same time, Lever Brothers
Pvt. Ltd. established the first commercial poultry feed mill in the district Rahim Yar Khan in the Punjab
province (Memon, 2012).

2.1-- INTRODUCTORY PERIOD (1965-1970)

In this period, early poultry ventures, especially those involving financial risks, were strongly supported by the
government. Poultry production was exempt from national tax levies. Poultry producers were allowed to
import genetically improved breeding stocks and equipment as duty free items.

EARLY POULTRY INDUSTRY:

 The perception of human protein deficiency in Pakistan,
 Excellent profit margins,
 Availability of technologies and
 Support from the Government
were the main forces behind shaping the early structure of the industry. The Directorate of Poultry Production
in Karachi was established in order to provide extension services to a steadily growing poultry farming
community.

2.2-- INSTITUTIONAL DEVELOPMENT PHASE (1971-1980)

With the poultry-friendly policies of the Government and good profits, poultry production developed as a
profitable enterprise in Pakistan. The success in this sector encouraged the government to strengthen
institutions serving this industry. This era was characterised by the establishment of the Federal Poultry Board
in1979 in order to establish an effective link between industry and government. Poultry research institutes
were established in 1978 in Karachi and Rawalpindi with assistance from UNDP/FAO funds to provide research
services to poultry farmers. This era is considered a boom period in the history of the poultry industry in
Pakistan. Special incentives made by the Sindh Government in terms of availability of state land for poultry
farming under ten year leases and the nationalisation of other industries by the federal Government
attracted a number of entrepreneurs to this sector. However, during this time the poultry industry suffered in
terms of limited marketing opportunities due to the imposition of a ban on the export of poultry products.
 Disease problems,
 Relatively high prices of poor quality feed and
 A limited supply of feed ingredients
further deteriorated the situation.
Meanwhile, the Pakistan Poultry Association was established in 1979 to promote lobbying to uplift the status
of the industry and farmers. From 1971 to 1980, the poultry industry experienced 177%, 271% and 297%
overall growth in total number of birds, total poultry meat production and total number of eggs, respectively
(GOP, 2013).

The following are the major policy decisions by the Government that helped the earlier growth of the
industry (Memon, 2012):

1. Exemption of taxes from the income earned from poultry farming.

2. Permission to import poultry equipments and flocks under the free list.
3. Leasing of state land at nominal rates.
4. Provision of subsidies on grains to formulate low cost, high quality rations.
5. Declaration of Tuesday and Wednesday as meat-less days all except chicken to promote its consumption.
6. Establishment of Poultry Research Institutes, directorates of poultry production and Federal Poultry Board
with the motives to train poultry farmers and provide research services and to create a link between the
Government and poultry farming community.
7. Facilitation to the availability of loans through different financial institutions

2.3-- THE DEPRESSION AND ADJUSTMENT PHASE (1981-1990)

During this period the poultry industry underwent a unique geographic relocation. In the early 1980's, the size
and volume of poultry industry showed a remarkable decrease in the Sindh province. Additionally poultry
farms located in different clusters faced a number of problems. Diseases outbreaks and decreased
productivity due to climatic stress required long term solutions. Keeping all these constraints in mind, more
progressive farmers decided to relocate farms to the relatively cooler and more biosecure northern areas of
Pakistan. During this phase the poultry industry experienced 118%, 190% and 94% growth respectively in
terms of total number of birds, overall meat production and egg production (GOP, 2013).

2.4-- SEVERE DISEASE OUTBREAKS AND RE-EMERGENCE OF THE INDUSTRY (1991-

2000)
 This period was characterised by a number of disasters in the industry, especially from disease.

 Hydro Pericardium Syndrome (HPS) appeared in 1990 and caused a huge damage to broiler and
broiler breeder flocks. Gumboro appeared in 1991-and adversely effected broiler, layer and parent
flocks.

 While the industry was trying to adjust itself from the earlier HPS and Gumboro attacks, another
outbreak of Avian Influenza in Murree and Abbotabad in 1995 occurred in the parent flocks and
caused up to 80% mortality (Akhtar, 1994; Anjum et al., 1994). The emergence of these diseases
 opened new avenues in the industry, whereby prophylactic measures regarding vaccination and
biosecurity were introduced.

 New companies for the import of vaccines and medicines were established. The University of
Agriculture in Faisalabad, poultry and veterinary research institutes played important roles in
controlling these problems (PPA, 2013a).

 On the other hand, lack of planning led to an oversupply of parent stock in the country in 1996, which
caused a sharp decline in day old chick prices below the cost of production.

 In 1997, the imposition of a ban by the federal Government on serving lunch in marriage functions
(where chicken was consumed) further deteriorated the situation, as it reduced the demand of poultry
products in the local market by about 40%.

 In 1998 chick prices improved and breeding and hatchery companies became more financially secure,
but in 1999 the industry again suffered due to the appearance of influenza-like diseases (PPA, 2013a).

 Despite the industry experiencing heavy losses during this phase, it kept on growing and showed an
excellent growth rate in terms of total number of birds produced, overall poultry meat production and
total number of eggs produced with the growth values as 99, 125 and 67% (GOP, 2013), respectively.

3-- POULTRY FARMING IN RECENT TIMES

The poultry industry started to stabilise in the late 1990s by gaining better profit margins on poultry products.
New investors entered into the industry and adopted modern technologies such as environmentally
controlled housing. In this phase the industry received huge investments from new investors and poultry
farming started shifting from open sided houses to new, state of the art barns.

The establishment of the University of Veterinary and Animal Science in Lahore in 2002 was a further step
towards extending support to this fast growing industry in Pakistan by helping solve disease issues and
providing trained personnel. The students obtaining the veterinary medicine and poultry science degrees
proved to be an asset for the industry. Up until 2004 the poultry industry enjoyed excellent growth with good
profit margins however, the emergence of avian influenza in South East Asia (Naeem and Siddique, 2006),
and its rumoured spread into Pakistan retarded this growth. The imposition of the ban on the import of
poultry products by Middle East countries further deteriorated the situation. Despite its ups and downs, the
Pakistan industry still attained 127% growth in the total number of birds produced, 126% growth in the total
meat production and 71% growth in terms of total eggs produced between 2000 and 2010 (GOP, 2013). The
reason behind this extraordinary growth is the existence of the strong base of this industry in Pakistan.
Presently the cheapest available sources of animal protein in Pakistan are the eggs and meat from the poultry
sector (PPA, 2013a).

4-- CURRENT POULTRY STATUS OF PAKISTAN

http://www.finance.gov.pk/survey/chapters_19/2-Agriculture.pdf

I. Poultry sector is one of the most vibrant subsectors of livestock sector. The current investment in
Poultry Industry is more than Rs. 700 billion.
 II. This industry is progressing at an impressive growth rate of 8 to 10 percent per annum over last few
years. Pakistan has become the 11th largest poultry producer in the world with the production of
1,163 million broilers annually.
III. This sector provides employment (direct/indirect) to over 1.5 million people. Poultry today has been a
balancing force to keep check on the prices of mutton and beef.
IV. Poultry meat contributes 34 percent (1,518 thousand tons) of the total meat production (4,478
thousand tons) in the country. Poultry meat production showed a growth rate of 9.1 percent whereas
egg production showed a growth of 5.6 percent (19.0 billion Nos.) during 2018-19 as compared to
previous year.
V. Transformation of poultry production in controlled shed system is making a tremendous difference of
quantity and quality of poultry production. There are now over 6,500 controlled environment poultry
sheds in the country which indicates that our poultry sector is moving in the direction of
modernization and using advance technology.
VI. The Poultry Development Strategy revolves around
 Disease control;
 Hi-tech poultry production in intensive poultry;
 Processing and value addition;
 Improving poultry husbandry practices and development.
VII. The government has always been supportive to poultry industry in providing most enabling
environment for its growth and expansion. The commercial layer, breeders and broiler stocks showed
estimated growth of 7.0 percent, 5.0 percent and 10 percent respectively, while rural poultry
developed @ 1.5 percent when compared to 2017-18.

The estimated production of commercial and rural poultry and products for the last three
years is given below:
5-- FEDERAL GOVERNMENT (PAKISTAN) POULTRY DEVELOPMENT POLICY
It envisages sustainable supply of wholesome poultry meat; eggs and value added products to the local and
international markets and aimed at facilitating private sector development for sustainable poultry production.
The strategy revolves around supporting private sector through regulatory measures.
The federal government has given a number of concessions on import of
 Poultry machinery,
 Parent and grandparent stock of chicken and
 Hatching eggs
to reduce input cost.

During the Budget 2017- 18, government reduced the sales tax from 17 percent to 7 percent on import of
various types of poultry machinery, reduced custom duty from 11 percent to 3 percent and removal of 5
percent Regulatory duty on import of grandparent and parent stock of chicken and reduced custom duty on
the import of hatching eggs from 11 percent to 3 percent. These concessions will help in reducing cost of
production of value added poultry products and promote value added poultry industry in the country.
FURTHERMORE, FEDERAL GOVERNMENT is also considering support for waiver of 100 percent
cash margin on opening of letter of credit (LC) on import of raw material for poultry value addition to make
the Pakistani products more competitive in the export market.

6-- TRADE OF LIVESTOCK AND LIVESTOCK PRODUCTS

The development of the livestock and Poultry sector and its vertical integration to produce value added
products is important to enhance trade opportunities for Pakistan in the global market place. The value
addition in livestock and poultry sectors are now on the path of achieving further heights and many value
adding livestock and poultry businesses, ie.

 K & Ns Chickens/ Poultry Processing

 Sabrosso
 Big Birds/ Food
 Menu Chicken

have been established in the country that are actively taking part in trade of livestock and livestock products.

To enhance the trade activities of Livestock/ Poultry and it’s products, the government has given following
incentives;

1-- Sales Tax on import of seven types of poultry machinery is reduced to 7 percent. These include
 poultry incubators,
 brooders,
 grain storage silos for poultry and poultry sheds
2-- Custom duty on import of on grandparent and parent stock of chicken is reduced to 7 percent
3-- Regulatory duty on import of grandparent and parent stock of chicken has been withdrawn
4-- Custom duty on import of hatching eggs is reduced to 3 percent  Custom duty on import of raw skins &
hides has been withdrawn
5-- Custom duty on import of ostriches has been withdrawn
6-- Custom duty on import of growth promoters premix, vitamin premix, vitamin B12 (Feed grade) and
Vitamin H2 (Feed grade) is reduced to 5 percent for registered manufacturers of poultry feed