December 10, 2024

Pakistani poultry farmers warn of shutdown over government price cap

The Pakistan Poultry Association (Northern Region) has warned the Punjab government that its decision to cap chicken meat prices may force many poultry farms to shut down due to mounting financial losses.

Malik Muhammad Sharif, vice chairman of the PPA (NR), criticised the government for imposing an upper price ceiling on chicken meat, arguing that this intervention is causing significant harm to farmers. He urged the government to remove the cap immediately and allow market forces to determine prices freely.

In a statement, Sharif highlighted the importance of the poultry industry within the agricultural sector. The industry contributes 40% of the country's meat consumption and provides employment to approximately 1.5 million people.

Sharif explained that poultry meat and egg prices are usually determined by supply and demand, which fluctuate due to seasonal factors, Islamic festivals, farm diseases, load shedding, and inflation. These market forces operate independently of farmers or public sector control. Price reductions occur naturally when demand decreases, and increasing production is the only reliable way to stabilise the market.

He argued that government-imposed price controls have historically proven ineffective and detrimental, often worsening the situation for poultry farmers. Such measures, he said, drive many farmers into crisis and force them to cease operations.

Sharif accused the Punjab government of unlawfully interfering in the market by capping the price of broiler chicken at Rs600 per kilogram. He pointed out that the price cap sets an upper limit without establishing a lower limit, creating challenges for farmers who cannot store chicken meat for more than 4-5 days due to its perishable nature.

He estimated that each poultry shed is incurring losses ranging from PKR 5.5 million (US$19,758) to PKR 6 million (US$21,555) because of the price ceiling. These financial pressures, he warned, are driving many poultry farmers to the brink of closure.

Sharif called for immediate government action to lift the price cap and restore a free-market system to prevent further harm to the poultry industry.

-      Business Recorder