“The rate of chicken has reached a historic high!” “Are chicken prices ever going to come down?” “What is happening in this country? These are some of the many questions going over everyone’s mind. Day by day, we are witnessing a massive increase in chicken prices. In comparison to the same time last year, the price was a little over 350 Rs/kg. Now it has crossed 550 Rs/Kg (might be even more by the time you will be reading this). What may be the source of this anomaly?
Well the answer lies in one of the most basic principles of economics that we have learnt in high school: supply and demand. With a very heavy heart, it is to be said that none of those who came to power ever really had a sweet spot for the poultry industry. It is due to the supply & demand along with the rising cost of production that have left farmers out of business. Hence, we are witnessing this phenomenon. What might be the reason for the farmer’s increased cost of production? That is an ‘idiosyncratic’ question for the average reader. Here is the explanation:
Feed is the most important part when it comes to raising broilers. It constitutes about 70% of the total cost. The price of feed increased by 66% in one year due to increase in input cost, and government mismanagement. Why government mismanagement? The reason is that they never really tried to understand the conundrum of the poultry industry.
Soybean meal is a major ingredient in making feed of the chicken. The main protein requirement of a broiler comes from soybean meal. It comprises about 25-30% of the overall feed. A broiler needs this amount of protein for it grow at its full genetic potential. Since Pakistan does not produce its own soybean, the bean has to be imported from the USA, and South America.
Before 2015, soybean meal used to be imported from India but ever since the trade ban with the country, the market shifted to the countries mentioned previously. The problem started on October 20th, 2022, when soybean and canola worth $500 million was stopped at the port, on the basis of it being “GMO”.
This created a huge crisis in the overall poultry industry, as the major protein raw material for chicken feed suddenly became unavailable. Broiler farmers started panicking, and stopped placing chicks in their sheds. This translated to a huge drop in the production.
The minister of national food security and research, gave a brusque and a false statement that soybean was never used in a broiler’s feed before 2015.
The statement was fallacious in a sense that before 2015, soybean meal used to be imported from India by feed millers. Soybean meal has been a part of a chicken’s feed since 1988. It was only after the trade ban with India that soybeans started getting imported from the USA and South America by solvent extractors. Another advantage of directly importing the bean is oil. A soybean consists of around 20% oil.
One of the many advantages of importing the bean rather than meal is that with the former, you get to refine oil as well. Hence, minimizing the need to import it. Furthermore, the minister stated that there are many alternate sources to soybean which are locally available. The local alternatives are; Rapeseed meal, Guar meal, Corn gluten meal, Sunflower meal, and Fish meal.
First of all, none of these has the same protein quality as soybean meal. Secondly, soybean meal is considered as the number one source of protein in manufacturing poultry and dairy feed due to its biological quality. The industry’s feed conversion ratio (ratio between feed given and chicken’s weight obtained) improved from 2.5 to 1.5, giving a 40% increase in the efficiency which kept the price of chicken affordable. Finally, even if the whole industry were to use these as an alternative, not enough quantity will be available to cater to the whole industry.
Now let us talk a little bit about GMO. What is GMO? GMO stands for ‘genetically modified organism’. The acronym itself is infamous among some people. However, is it something to be afraid of? The whole scientific community around the world is under the consensus that anything which is GMO-based is NOT cancer causing (one of the major concerns of a common man/woman). At least so far there has been no evidence of it being so. So why the debate? Or more importantly, what is the debate? First, let us discuss the main pur pose of a GMO-based crop.
The main purpose of a GMO based crop is to increase the crop’s yield without the significant use of a herbicide. Our population is increasing at an exponential rate and in order to meet the rising population’s demand, you need to make sure that there is an abundant quantity available in order to cater it. GMO does the trick, since it prevents any insects from destroying the crop.
However, some inferred that this may lead to the crop developing a major insecticide tolerance, which in turn will make all the herbicides/pesticides/insecticides become futile. In addition to that, some believe that it will lead towards a massive reduction in bio-diversity as well.
With all that being said, none of this has been supported by any fact or proper evidence. Unfortunately, people in our system have misrepresented this term in such a way that a common man/woman, believes that anything which is GMO-based, directly causes cancer and can potentially kill you, which is totally baseless.
According to the WHO (World Health Organisation), “GM foods currently available on the international market have passed safety assessments and are not likely to present risks for human health. In addition, no effects on human health have been shown as a result of the consumption of such foods by the general population in the countries where they have been approved”. (Source: WHO website)
Coming back to the feed crisis. Unfortunately, even if the feed crisis is resolved, it will take at least another year for the rates to normalize. Currently, the production is at its lowest and no farmer is willing to place flocks in his shed. In addition to that, the government needs to understand the woes of an average farmer.
Whenever a farmer makes money, the whole industry makes money, which at the end of the day contributes to the overall economy of the country and makes the chicken affordable for the daily consumer, as more and more farmers would be incentivized to place flocks, thus increasing production. Whenever an industry thrives, more jobs are created, there is less unemployment, and more revenue is generated for the government.
Copyright Business Recorder, 2023