April 18, 2013

Pakistan's poultry industry urges government not to impose new taxes

Pakistan's poultry sector has called on the government not to impose any new taxes seeing as to how it is still in favour of free market mechanism.

Abdul Basit, former chairman of the Pakistan Poultry Association, said, "Poultry is a perishable commodity, which cannot be stocked, and its rates are determined by supply and demand."

He added that cost of production carries no relevance in poultry trade and that yearly, the poultry market passes through a cycle of lean period when production cost is not covered. This is then followed by two cycles of high prices that not only cover up the losses but earn farmers some profit.

Basit said that for the first time, poultry rates have remained below production cost for over eight months, meaning that farmers have suffered substantial losses in two consecutive breeding cycles.

"This has devastated numerous farmers as costs have gone abnormally high due to explosive power outage in rural areas where most of the poultry farms are located," he said.

Basit added that after the introduction of closed poultry farms, it is necessary to keep poultry sheds cool throughout. He said if the cooling gadgets - fans and desert coolers - stop for two minutes, the entire stock of 30,000 to 60,000 birds die instantly. He said farms run fans and desert coolers for up to 22-hours a day on diesel-run generators. The power cost, he added, soars to PKR45 (US$0.46) per unit instead of the PKR9 (US$0.09) charged by the Water and Power Development Authority.

According to Basit, poultry farms will soon close down due to high production costs. "With fewer supplies, the surviving farms will then cover their past losses and make money," he said.

He complained that when poultry rates dip, the government remains a silent spectator, but as the rates go up, the government intervenes, which runs against the principles of a free market economy.