The KP government’s ban on exports of poultry products to Afghanistan has added one more to the list of many other problems facing the industry.

The poultry industry fears if the ban is not lifted immediately, India and other countries will capture the huge Afghan market for poultry products making Pakistan’s reentry difficult.

The Pakistan Poultry Association has sought intervention of the federal government and reminded the authorities that the KP ban violates the Supreme Court order that had allowed poultry exports to Kabul, setting aside a previous order of the Peshawar High Court.

Regardless of the legal aspects, the ban will not help stabilise prices in KP, poultry farmers say. Instead, it may lead to closure of businesses, resulting in poultry supply shortages and consequent rise in prices, upsetting the entire Rs700bn plus poultry industry in the country.

Pakistan has been providing transit route to India, Brazil and the US for shipment of food, eggs and poultry products to Afghanistan. Poultry farmers of these countries can fill in the gap created by the absence of Pakistan’s poultry products in the Afghan market. That will result in the loss of export earnings and encourage smuggling.

Afghanistan is a big market for Pakistan’s poultry and poultry products’ exports of about $4.2m, accounting for one-fourth of the total export earnings, FY14 stats obtained from Pakistan’s Bureau of Statics reveal.

Our poultry sector, devastated by the super floods of 2010, had quickly bounced back with some investment made in establishment of poultry sheds, in-house power supply and breeding technology. Since then, this sector has been growing at around 8-10pc despite occasional hiccups like withdrawal of tax exemption on poultry feed and preferential treatment to poultry meat imports for foreign fast food chains, PPA officials say.

The poultry industry sector has been growing at around 8-10pc despite occasional hiccups like the withdrawal of tax exemption on poultry feed and preferential treatment to poultry meat imports for foreign fast food chains

They say that the KP ban on exports of poultry products has renewed a debate on how provinces and the federation should strike a better working relationship in matters over which both have one kind of control or the other.

Agriculture (of which poultry sector is a part) and pricing of essential commodities are provincial subjects. So, provincial authorities can do things to safeguard local interests of one sub-sector of agriculture or the other. Similarly, they can take administrative steps to ensure price stability. This is the key argument offered by the KP authorities for banning exports of poultry products to Kabul.

But poultry industry’s contention is that if a provincial decision can potentially affect the working of a national industry or its exports then that decision has to be taken after taking the industry representatives and the federal authorities on board. Poultry is a big industry and any blow to its smooth working can directly affect lives of hundreds of thousands of people associated with it besides having an impact on millions of local consumers indirectly. “Whether it’s KP or Punjab or Sindh or Balochistan, the point is no province can be allowed to make unilateral decisions in the areas where consequences of the decision can hit the entire nation,” says a former chairman of PPA.

Extending this line of argument, one can question several other provincial decisions that ultimately have a bearing on national economic arena. For example, slower release of officially-subsidised wheat to flour mills by the Punjab food department last year is worrying wheat growers that their projected bumper crop this year would fetch low prices. Or, the row over sugarcane support prices in Sindh has already affected both the growers and sugar millers alike. Similarly, a large paddy crop hasn’t been of any good for growers who are forced to sell rice at below market prices in the absence of a just-for-all pricing mechanism for non-Basmati prices in Sindh and Punjab.

Coming back to poultry sector, the provinces particularly KP need extra care in making any move to try to regulate prices of poultry products without first addressing the issue of smuggling. The same is true in case of live domestic animals whose smuggling via KP and Balochistan to Afghanistan and Iran continue to harm meat and dairy sectors.

Some poultry farmers say though the issue of KP ban on exports of poultry products to Kabul merits attention of policy makers, a broader question relates to modernisation of the poultry sector and development of a bigger export base.

Poultry products’ exports have never touched $5m mark despite huge, growing demand for them in Afghanistan, Middle East, Central and Southeast Asia and North Africa. They say that from poultry birds breeding to their slaughtering to grading and packaging of poultry meat fit for exports, all need investment. But banks offer credit only to a few selected large poultry farms and poultry meat processors. That impedes exploitation of full potential of the poultry sector.

Published in Dawn, Economic & Business, January 19th , 2015

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