Research Studies completed

i). A Value Chain Analysis of the Meat Sector in Pakistan

Meat value chain is comprised of five segments namely Inputs,
Production of Meat Animal, Marketing of Meat Animals, Processing
(Slaughtering) and Meat Distribution (Domestic and Export Markets).
Inputs 1st segment includes genetic (breeds of meat animals), feed
(green, dry fodders, concentrates and pastures) and veterinary services
(medicine, vaccination and artificial insemination). There are
transboundry breeds namely Sahiwal and Thari cattles, Nili Ravi buffaloes
and Beetal goats. There are no beef breeds of cattle in Pakistan and
therefore beef is at best a by-product. Haphazard breeding is prevailing
along with traditional unscientific management that is compounded by
the low genetic ceiling of the livestock. Fodder availability/adult animal
unit has declined 1.5 ton from 1996 to 0.80 ton in 2006. Likewise wheat
straw availability per adult animal unit has declined from 0.323 ton in
1996 to 0.307 ton in 2006.
Concentrates availability per adult animal unit has declined from 0.04 ton
in 1996 to 0.036 ton in 2006. Rangeland per adult animal unit small
ruminants is only 4.76 ha/annum low productivity of rangeland due to
over grazing and exploitation. During the current era these children prefer
to go for daily wage work rather than grazing and grass cutting due to
social status of herders. The decline in feed resulted to high cost of feeds.
Number of nomadic from Afghanistan has also disappeared due to war
and terror. Such decline of availability for green and dry fodders and
concentrates overtime led to poor and inadequate nutrition which resulted
in low animal productivity. Large and small ruminants are performing
much below their genetic potential due to poor and inadequate nutrition
which lead to compounded by the low genetic ceiling of livestock.
The availability of veterinary services (a veterinary hospital, a veterinary
dispensary and a artificial insemination centre is available for 86575,
13852 and 69260 adult animals unit respectively during 2006 Livestock
Census. A veterinary professional and a sub-professional is available for
34630 and 13852 adult animal unit during 2006 livestock census) is
limited due to which high disease and high mortality are occurring. The
veterinary medicines are also very expensive in the view of livestock and
level of farmers satisfaction is poor.
The binding constraints/obstacles facing first segment of meat value
chain are (i) haphazard breeding and traditional unscientific management
(ii) the decline of availability for green and dry fodders, concentrates and

pasture overtime led to poor and inadequate nutrition (iii) limited

availability of veterinary services and expensive medicines, livestock
herders are using at low level of veterinary services (iv) earlier, the
children of small farmers were involved in grazing animal and cutting of
grasses for animal. During the current era these children prefer to go for
daily wage work rather than grazing and grass cutting due to social
status. Due to limited availability of genetics, feed and veterinary services
along with expensive medicines, livestock herders and flock owners are
using these at low level resulting poor management and productivity of
meat animals in the country.
Under the Production of Meat Animals segment of value chain, meat
animals produced were 24.493 million heads with a value of Rs.266.557
billion during 2008-09 in the country. Out of which beef animals were
7.673 million heads with a value of Rs.173.5965 billion including cattle
(3.973 million heads with a value of Rs.93.172 billion) and buffaloes
(3.676 million heads with a value of Rs.79.6245 billion). The mutton
animals (sheep and goats) were 16.82 million heads with a value of
Rs.92.960 billion including sheep (4.8993 million heads with a value of
Rs.36.0768 billion) and goat (11.927 million heads with a value of
Rs.56.8834 billion). Analysis of cost of production of large ruminants at
feed lot farming revealed that farmers are earning net income of Rs.436/per animal. Similarly, cost of production of small ruminants with feed lot
farming revealed that farmers are earning net income of Rs.103/- per
animal. This implies that feed lot farming (raising beef and mutton
animals) with concentrate to bring them to slaughter weight and feed lot
farming is profitable enterprise. A portion of meat sub-sector is made up
of dairy meat and mutton that comes from in-milking cows and buffaloes,
female sheep and female goats culled from dairy herds because for age
and other reasons, they are not productive for dairy purposes and
reproductive potential.
The major factors contributing towards low productivity are (i) weak and
unhealthy stock and breeding lines because no beef breeds of cattle (ii)
no concept of herd health management (iii) low output due to low input
system (iv) raising meat animal with traditional system is not profitable
enterprise and (v) social system has broken due to inflation and aginflation is even higher. All these factors translate into a existing very
weak livestock extension services in the country.
Under Marketing of Meat Animals segment of value chain, meat
animals marketed was 24.493 million heads during 2008-09 which
includes domestic marketing (24.495 m.h) and animal exported (33477

with a export value of Rs.309.01 million). Traditional farmers, feed lot

fattening farmers and exporter own farm marketed 23.764, 0.514, and
0.220 million heads were marketed respectively during 2009. Meat
animals were marketed through five channels. Channel-1 includes farmer
to beopari (80%), farmer to live animal market (5%), and farmer to rural
butcher (15%). Channel-2 deals with beopari to live animal market (98%),
and beopair to rural butcher (2%). Channel-3 includes animal market to
contractors (52%), animal market to traveler traders (15%), animal
market to urban butcher (31%), and animal market to rural butcher (2%).
Channel-4 includes contractor to traveler traders (27%), contractor to
exporters (1%), and contractor to urban butcher (72%). Channel-5
includes traveler trader to slaughter house (16%), and traveler trader to
urban butcher (84%).
On the marketing side, the livestock markets are suffered from shortage
of basic facilities like watering, shelter, feed and fodder. A number of
other arrangements like loading/unloading, communication, services of
veterinary doctor, weighing, market boundaries etc. are absent despite 35 percent commission is charged as market fee in Punjab whereas in other
provinces various practices are followed. The contract money of these
markets is not invested back for provision of such facilities. But the most
crucial aspect of the marketing system constraining meat development is
the sale of animal on per head basis and not on their live weight basis.
This militates against the success of any meat development program. The
meat production is entirely in the private sector. Delay in live animal
delivery is due to non-availability of specific transport and overloading
without refrigeration. However, the government intervention in fixing the
price at the retail end is neither rational nor fair. It makes the situation
worse because this retail price fixation is not applied to the corporate
sector.
The binding constraints of this segment of meat value chain are (i)
inadequate basic facilities at live animals market (watering, shelter, feed
and fodder, absence of weighing machine and market committee) (ii) nonavailability of specific transport and overloading without refrigeration (iii)
delay in live animal delivery and (iv) faulty pricing mechanism of meat
animals (per head basis rather than weight basis).
Under Meat Production segment of value chain, total meat produced
during 2008-09 was 2.192 million ton by slaughtering 24.493 million
heads of meat animals. Total beef production originates from beef animals
produced by general farmers slaughtered (1.187 million tons), feed lots
(0.016 million tons) and Eid-ul-Azha (0.40 million tones). Similarly, total

mutton production comes from mutton animals produced by general

farmers slaughtered (0.341 million tons), feed lots (0.012 million tons)
and Eid-ul-Azha (0.236 million tones). The estimated meat production for
the year 2008-09 in Pakistan is 2.192 million tones. Out of this 1.603 and
0.588 m. tones are beef and mutton respectively. The production of cattle,
buffalo and camel beef was 0.638, 0.543 and 0.006 m. tones respectively.
Production of mutton from sheep and goat was 0.588 million tons. The
overall productivity of all the species in terms of meat is low. The overall
increase in meat over the years was due to the increased inventory and
not because of any increase in their productivity.
The binding constraints of this part of meat value chain are (i) abattoirs in
disrepair with limited current expenditure (ii) small number of regulated
slaughterhouses (iii) Abattoirs have rudimentary disposal system of
byproducts (iv) limited private sector participation (v) code of practice not
operational (vi) weak ante mortem and post mortem inspection (vii) no
chilling facilities except in few private abattoirs and (viii) no veterinary
and plant health authority (ix) because of fixing the price of meat by the
tehsil municipal administration, the slaughtering of weak, diseased and
old animals is very common (x) absence of meat grading and pricing
(affecting meat quality) (xi) illegal slaughtering (xii) lack of specialized
skills in flaying and meat handling and un-hygienic meat transportation
are serious concerns in the meat production chain
Under Meat Marketing segment of value chain, the total meat
marketed during 2008-09 was 2.192 million ton out of which beef and
mutton were 1.603 and 0.588 million ton respectively. The meat marketed
from recognized slaughter house to domestic market was 1.097 million
ton (49%) which includes beef (0.782 m.t) and mutton (0.285 m.t). The
meat marketed from urban butcher to domestic markets was 0.653 million
ton (30%) which includes beef (0.479 m.t) and mutton (0.174 m.t). The
meat marketed from rural butchers was 0.457 m.t. which includes beef
(0.335 m.t) and mutton (0.122 m.t).
The meat marketing channels observed are as under: (i) from recognized
slaughter houses to wholesaler (30%) and retailers/butchers (70%) (ii)
wholesalers to retailers (90%), hotel and restaurants (5%), food services
and suppliers (3%) and super markets (2%) (iii) retailers to consumers
(100%) (iv) urban butchers to consumers (93%), food suppliers (3%),
hotel and restaurants (4%) (v) rural butchers to consumer (100%) (vi)
offals retailers receives (50%) from offals contractors and sell all of it to
consumers (vi) hotel and restaurants, food services and suppliers and
super markets to consumers (100%) and (viii) offals processors receives

(50%) offals from contractors and sell all to offals exporters. The meat
transported cost for domestic markets Rs.7.076 billion during 2008-09
which includes the transportation cost of beef (Rs.4.752 billion) and
mutton (Rs.2.324 billion).
The estimated cost of production of beef and mutton was Rs.169.49/kg
and Rs.263/kg respectively at feed lot fattening producer respectively. The
marketing costs of beef and mutton at producer level is Rs.169.49 and
Rs.262.75/kg. The marketing costs of beef and mutton at
contractor/beopari level is Rs.7.50 and Rs.14.71/kg. The marketing costs
of beef and mutton at commission agent level is Rs.0.64 and Rs.4.83/kg.
The marketing costs of beef and mutton at butcher/retailer level is
Rs.11.06 and Rs.21.73/kg respectively.
The sale price of beef and mutton at producer (feed lot fattening) level is
Rs.184.17 and Rs.280/kg. The sale price of beef and mutton at
contractor/beopari level is Rs.200.18 and Rs.302/kg. The sale price of beef
and mutton at butcher/retailer level is Rs.220.81 and Rs.327/kg
respectively.
The net profit margin of beef and mutton at producer at feed lot fattening
level is Rs.14.68 and Rs.17.25/kg. The net profit margin of beef and
mutton at contractor/beopari level is Rs.8.51 and Rs.7.29/kg. The net
profit margin of beef and mutton at commission agent level is Rs.0.61 and
Rs.2.60/kg. The net profit margin of beef and mutton at butcher/retailer
level is Rs.9.57 and Rs.3.27/kg respectively.
The exported meat was 0.01436 million ton during 2008-09 (assuming the
same as exported in 2007-08) which includes beef (0.00697 m.t.) and
mutton (0.0739 m.t) respectively. The value of synthetic RCA for beef
fresh/child/frozen, meat nes./fresh/chld/froz, meat/offals preserved,
meat/offals preserved n.e.s etc. is greater than 1 which implies Pakistan
has comparative advantage in meat and meat preparation.
The main inefficiencies of meat marketing are (i) controlled retail price of
meat causing slaughtering of unhealthy and old animals (ii) absence of
meat grading and pricing by quality (iii) illegal slaughtering leads to poor
quality meat (iv) lack of specialized skills in flaying and meat handling (v)
un-hygienic meat sale (retail outlets) (vi) no chilling facilities at butchers
shops and (vii) few operations for export and poor regulation for export.
The opportunities for meat export increase the source of foreign exchange
and it may also increase the income of farmers if facilitation from
government/research institutions and farmers interest to raise meat
animals as a business on commercial basis. Moreover, the export of meat

offals has a potential like intestines of small ruminants for European

countries and Patjori export to China. There is a need to create
awareness at local level for export of offals. The threat for export meat is
related with the exploitations local consumers in the form of price and
quality. Likewise illegal smuggling reduces foreign resources and also
exploits the local consumers. There is need of compulsion for exporters to
produce a reasonable export quantity at their own farms to avoid market
distortion and protect domestic consumers.
The proposed strategy/requirements for 1 st segment of meat value chain
namely Inputs are (i) need improved breeding for meat animal
programme with modern and scientific management (ii) farmers
awareness about low cost quality feed for ensuring adequate nutrition
and (iii) policies for cheaper inputs (feed and veterinary services) for
higher use of inputs .
The proposed strategy/requirements for 2nd segment of meat value chain
namely Production of Meat Animals are (i) farmers awareness about
raising meat animals on commercial basis (ii) shift to feed lot fattening or
farmer production groups in rearing yards (iii) effective disease
monitoring and control for enhancing animal productivity (iv) need a
special focus on social system and (v) policies for reducing ag-inflation.
The proposed strategy/requirements for 3rd segment of meat value chain
namely Marketing of Meat Animals: are (i) channeling of Contractual
money for provision of basic facilities (ii) encouraging Pvt Sector for
developing markets with basic facilities (iii) redesigning vehicles suitable
for animal transport (iv) awareness to traders (v) enforcement of pricing
by weight and awareness campaign and (vi) proposed legal authority with
regulatory coverage.
The proposed strategy/requirements for 4th segment of meat value chain
namely Processing (Slaughtering) and further Meat Processing are (i)
privatization of state owned slaughter houses (ii) foreign/local investment
(iii) SPS management through Veterinary plan (iv) health authority (v)
Meat standards and an industry Code of practice (vi) HACCP for meat
processing (vii) meat inspection laws and (viii) for enhancing legal
slaughtering, there is a need for de-skinning machines may increase
efficiency for slaughtering large ruminants in the country with the
consideration of employment concerned of manually slaughtering workers
The proposed strategy/requirements for 5th segment of meat value chain
namely Meat Marketing are (i) a robust value chain, improved linkages
with producers (ii) regulated outlets open price policy like chicken & fish

(iii) cut-based pricing under free market forces (iv) strict compliance of
the legal slaughtering (v) awareness, provision of institutional training &
Registration (vi) awareness & implementation of SPS sanitary measures
(vii) consumer awareness of the benefits of a hygienic product (viii)
investment-driven incentives and effective regulation and standards and
(ix) exposure visits for exporters.
Greater product diversification by the processors is needed. Processing of
meat can be as simple as preparation of retail cuts of meat, or it may
involve grinding, flaking, sectioning, seasoning, salting, curing, forming,
smoking, heating, fermenting, drying or combination of these treatments.
The improvement of packaging utilizing food grade materials and the
greater use of vacuum packing are also required. Greater research or
collaborative research with other countries into food safety and
veterinary and plant health, for example (i) improved detection and
screening techniques for residues of antimicrobials and their metabolism
in animal products (ii) the presence of drug metabolites in animal
products destined for human consumption (iii) the role that
antimicrobials or their residues play in food sensitization and subsequent
hypersensitive reactions in humans (iv) the associations and frequency
of antibiotic resistance and (v) detailed studies to assess the
microbiological contamination at different stages of processing.

ii).

Fertilizer Use Assessment during Rabi 2008-09 in the Pothwar

Region of Punjab, Pakistan
The main theme of this study was to assess the fertilizer use situation in
Pothwar region of Punjab, after, first record high wheat procurement
prices announced by the government for the upcoming season that might
enhanced fertilizer and other input use in the current Rabi season, and
second high prices of both nitrogenous and phosphatic fertilizers from
the last Kharif season that might decreased fertilizer use.
This study was conducted in Pothwar region of Punjab which, account for
about one quarter of the total cropped area of the Punjab. This tract is one
of the poorest and food deficit areas of the province. The small farmers,
especially those in dry parts of Pothwar, are on the average deficit in all
the subsistence products. Majority of the farmers (90%) operate below
subsistence land resources of less than 5 hectares.
So when this is the situation then the early described factors (high
procurement prices of wheat and high prices of fertilizers) are less
important as compared with other so many important factors. Important
other factors like economic status of the farmers, timely rainfall and

moisture, soil structure and texture, and next best alternatives might
affect the use of fertilizer in this region.
However, results reveal that nearly a bag of Urea and DAP each along
with substantial amount of FYM was applied to wheat crop on per acre
basis while rest of the crops are grown with negligible quantity of organic
as well as inorganic fertilizers.
It was also found through farmers perception that fertilizer use was
reduced up to 50 percent this season as compared with previous season
with the major argument of high prices by more than two third sample
farmers.
Other interesting results depicted that urea use is directly related with
wheat area and inversely with total cropped area. Also Urea use increases
as DAP use and FYM use increases.
So it is verified that high wheat procurement prices induce fertilizer use to wheat
and high fertilizer prices reduce its use. But at the same time timely rainfall and
economic conditions of the farmers supported this scenario. Therefore in rainfed
conditions, where farmers get benefit at four months early investment wit high
uncertainty, fertilizer should be provided at low prices.

iii). Feasibility of Inorganic, Orgaic Open Pollinated and Hybrid

Vegetables Seed Production in Pakistan
Economic impact of hybrid vegetable production for the year 2010 to
2014 is estimated and presented in table 2. During the year 2010,
vegetable seed production will be carried out on 5130 acres at NARC and
will produce hybrid seed production of 12.199 tons.
Vegetable seed production will be carried out on 10260 acres at NARC and
will produce hybrid seed production of 24398 tons during the year 2011,
during the year 2012; vegetable seed production will be carried out on
20520 acres at NARC and will produce hybrid seed production of 48.796
tons.
Vegetable seed production will be carried out on 41040 acres at NARC and
will produce hybrid seed production of 97.592 tons during the year
2013.During the year 2014, vegetable seed production will be carried out
on 50675 acres at NARC and will produce hybrid seed production of
109.49 tons. Hybrid Vegetable Seed Production by NARC with Contract
Growers will generate economic impact of Rs.8.07 billion.

This intervention will generate Rs.272.56 million, Rs.599.63 million,

Rs.1319.18 million, Rs.2902.20 million and Rs.4019.31 million during year
2010-14 respectively. Year wise detailed economic impact of hybrid
vegetable production is presented in table 11-15.

This enterprise will also generate social impact like job creation,
improvement in education and health as well as reduce man migration to
city. An estimated job opportunity will be created about 0.21 million
people by implementing the activities of this project. Positive
environmental impact in the form of healthy and fresh air for the human
population will improve health and reduce expenditure on treatment. Man
migration to city will be reduced due to creation of new jobs and Agro
based industry in the country side.
Under different activities of this project oxygen will be mitigated through
excess utilization of carbon dioxide. Production of the oxygen will be
double which will improve the availability of healthy and fresh air for
human being. The silt of the reservoirs especially of Mangla and Tarbela
dams will be minimized thus increasing the consumable life because it will
reduce the run of soil of hills and mountains due to torrential rains and
winds.

iv). Global Good Agricultural Practices for Export of Fruits and

Vegetables: An Investment Proposal

GAP project will generate number of socio-economic and environmental

benefits. The main beneficiaries would be citrus growers and traders.
Pakistans current export earnings from citrus fruit are estimated at US$
40 million. Non-compliance to emerging SPS issues may threaten the
sustenance of even the existing levels of exports what to speak of
enhancement.
Therefore, the project will help assure compliance and will thus directly
impact export volume and values (ii) empowerment of the farming
communities to make right site specific decisions regarding crop
management to meet challenges of world trade scenario (iii) the BAP
certified products will fetch premium price due to no risks to human
health (iv) the Project activities will provide foundation to organic
production which enjoys a growing niche market (v) a reduction of
production costs will be achieved due to less use pesticides and other

synthetic chemicals(vi) sustained and improved produce quality and

yields resulting in improved farm incomes. Reduced negative impacts on
soil fertility (vii) reduced probability of resistance to pesticides.
Social impact will be (i) more & better crop management especially pest
control options available to farmers (ii) socio-economic up lift of farming
communities through better quality produce (iii) better understanding
between farming communities and export market (iv) increased
knowledge and self confidence of farmers (v) more community initiatives
(vi) better image of the agriculture sector with other groups of the society.
Environmental impact will be (i) a generally more stable environment (ii)
reduced danger of biodiversity loss (iii) reduced degradation of natural
resources (iv) protected natural habitats (v) sustainability of the
environment and reduction in health hazards to pesticides users and
consumers through rationalizing use of pesticides through developing
awareness and implementation of best agricultural practices.

v).Feasibility of Sugarcane Juice Manufacturing in Pakistans Punjab

The project cost estimates for the proposed Sugarcane Juice Business
have been formulated on the basis of discussions with industry
stakeholders and experts.
The projections cover the cost of land, machinery and equipment
including office equipment, fixtures etc. The operations have been
calculated for 300 days on annul basis.
The financial analysis reveals that sugarcane juice at the scale of 100
tones per day crushing will yield 691.20 million rupees annually with total
variable cost of 435.84 million per annum.
The analysis further narrowed down on per pack level that yields Rs.3.00.
As about 90 % of the ingredients is sugarcane juice therefore the margin
might be less as compared with other fruit juices because fruit juice
contain only 4% Fruit Pulp and 80 % treated water while 10 -16 % Citric
Acid, Fruit Flavor and Preservative.

vi).Pilot Tomato Value Chain Development Scheme in Punjab

Province of Pakistan

The primary project outcome would be increased producers share in

consumer rupees and a shift towards export led tomato production.

The other associated outcomes would be increase in export earnings,

farm household incomes of farmers participating in tomato value chains,
and employment in agro-processing and agro-business enterprises.
The outcome indicators are linked directly to millennium development
goals of sustainable, diversified and export oriented economy that
responds to market demands, particularly: (a) positive contribution of
sectors to GDP growth and (b) growth of exports. The outcome indicators
are:
Increase in production volumes through enhanced productivity and
reduction in post harvest losses;
Safe and hygienic quality tomato handling and marketing to the
end users
Increase in value of tomato produce;
Increase in average income of small farmers linked to value chain
project activities.
Increase in export volume at higher export price by meeting the
SPS standards
Output indicators are linked to the intermediate results described in the
results framework and comprise mainly the following:
Increase in tomato productivity of small farmers linked to tomato
value chain project;
Number of tomato farms who adopted GAP
Number of villages and farmers linked to the tomato value chain
Number of tomato farmers associations developed and sustained by
decreasing the project support.
Change in effectiveness and efficiency of services provided by
tomato processing industry and its related public and private
institutes to stakeholders;
Volume of quality tomato produced and reached to the consumers
through vertical coordination in the value chain.
Pilot tomato value chain development scheme will ensure timely
availability of quality input to tomato growers at their doorstep which will
provide opportunities for the adoption of recommended input use.
Capacity building and training on knowledge and skill transfer will be
empower growers for the adoption of modern tomato production,
management and harvesting and handling technologies.
These interventions will enhance tomato productivity and its quality
and resultantly will generate more income with higher yield and better
tomato quality. The capacity building and training on knowledge, skill,

post-harvesting techniques, handlings, food safety and standard, packing,

processing to other chain stakeholders will improve their capacity for
reducing huge post-harvest losses and getting higher prices from export
markets. So, other chain stakeholders will also be benefited in the farm of
more knowledge, skill, techniques and more income from better prices
from the export markets.
vii).Export Competitiveness of Pakistans Horticulture

This Study examines Pakistans export competitiveness of horticultural

produce by using trade-based indices.
Under horticultural crops, fruits plus vegetables, fresh fruits nes, and
vegetables fresh nes were selected as groups and tangerines, mandarins
clem, and Onion were selected as individual crops for empirical study.
The study aimed at assessing the comparative and competitive
advantage of Pakistan in the selected commodities.
The results showed that Pakistan does not have a comparative and
competitive advantage for fruits plus vegetables category during 1990 to
1998, however Pakistan attained comparative and competitive advantage
in 1999 and maintained it up to 2006 with few exceptions but net trade
advantage for fruit plus vegetable category was achieved in 2004.
In the fresh fruits nes category the results demonstrated that
Pakistan has relatively higher comparative and competitive advantage
as compared to fruits plus vegetable as whole, all relevant indicators
were encouraging and explained Revealed comparative advantage and
net trade advantage with few exceptions for the whole period depicted in
the analysis.
In vegetables fresh category, fruits plus vegetable category and onion
Pakistan showed a transition from comparative and competitive
disadvantage to comparative and competitive advantage during the
period under analysis.
The analysis for individual crops i.e Tangerines, mandarins, clem
depicted that it maintained relatively higher export competitiveness as
compared to other categories for the whole period under analysis.
Pakistans comparative and competitive advantages showed an
increase in all commodities for the period under analysis.

viii). An Overview of Pakistan Poultry Sector

Poultry production is an important part of agro industry and plays its role
in food security of the country, however this industry is characterized by
small and unorganized operators, lack of disease control, uneven
distribution of profits and lack of technology, some dangerous disease.
This study was conducted to investigate the present status of poultry
sector in (Punjab), challenges, development projects and incentives and
strategies for control and management of this sector.
Pakistan has a vibrant poultry sector, with more than half a billion
birds produced annually. Commercial poultry production has bridged the
gap between supply and demand of animal protein. It has kept a check
on prices of mutton and meat.
Poultry is the cheapest available meat protein for our masses and
is the second largest industry having 200 billion investments. According
to economic survey 2008, it is producing and supplying in the market
10712 million table eggs 601,000 tons of poultry meat and at present
contributes 19 percent of total meat consumption.
There are two distinct production systems in Pakistan. The
traditional rural system and the commercial poultry system. Today it
constitutes a large segment of national economy and consists of 30.57
million domestic chicken and 98.45 tons of domestic poultry meat.
Commercial poultry production; which started in 1963 to supply the
Karachi market and now has an investment of over 23 billion rupees. It is
comprised of 26.56 million layers, 407.7 million broilers and 7.61 million
breeding stock.
Commercial poultry feed is usually purchased, although some
farmers use home-mixed feed.
The population of poultry in the Punjab Province decreased from
27848 in 1986 to 24952 in 1996 while in 2006 the population of poultry
again increased to 25906.
Poultry meat production has been increased from 512 thousand
tones in 2005-06 to 601 thousand tones in 2007-08 and it has registered
a significant increase of 8.48 percent in 2007-08 over 2006-07. Annual
total day old chicks production jumped from 387.2 million in 2006-07 to
425.95 2007-08 million with an increase of 10 percent and poultry bird
production increased from 477 million in 2006-07 to 518 million in 200708 with an increase of 8.48 percent.
According to HIES 2004-05 the per capita monthly consumption of
chicken meat was 0.23 while mutton and beef consumption was 0.07
and 0.33 respectively in Pakistan.

According to FAO estimates in 2003 the total Pakistan poultry meat

consumption quantity was 2 Kg per capita per year as compare 11 kg
per capita per year world poultry meat consumption. Pakistan as a
predominantly Muslim country has comparatively high, and rising, levels
of meat consumption.
At present there are about 22688 poultry farms in the Punjab
province with an investment of Rs. 28500 million .There are 119 feed
mills which produced 2.17 million ton poultry feed. There is a capacity to
produce 491.04 Million broiler birds ,20.8 million layer birds and 5.53
million breeding stock while 329 Million broiler birds ,16.61 million layer
birds and 4.85 breeding stock are actually being produced. The share of
broiler in poultry meat is 329108 million metric ton poultry while the
share of culled birds and desi birds is 21463 and 41226 million tons
respectively.
The number of Government poultry farms remain same from
2002-2007 while the number of birds maintained increased from 706
thousand in 2002-2003 to 797 thousand in 2006-2007. The number of
day old chicks also increased from 555 thousand in 2002-03 to 592
thousand in 2006-07.
From 1990 onward, growth in poultry sector was on tremendous
scale despite few setbacks but it is pertinent to mention that during this
period balance of growth greatly titled in favor of Punjab region. Hi Tech
group, National group, Olympia group are very famous and became
poultry industry giants, closely followed by SB group, Asia feed group
and Islamabad group.
In Pakistan poultry is sold through vet markets in cities and
villages. Birds are selected live by the consumer and slaughtered and
dressed by the retailer. Only a small percentage of commercial broilers
are commercially processed, mainly for hotels. Currently, Pakistan
employs a three-tiered system composed of poultry farmers, commission
agents, and retailers.
Commission agents usually get the produce from the farmers at
low prices and earn large profits by selling the same products at a higher
price to retailers, who turn around and mark up products to miffed
consumers in wet markets.There, are fluctuations in sale rates of poultry
products in Pakistan.
Poultry meat production over many decades have publicized
optimistic growth in the overall performances of the livestock sector and

it has now reached a stage where its impact is obvious on the national
economy of the country.

Poultry keeping business is one of the most hopeful sources of

additional income. Besides, this poultry farming has a number of
advantages. It produces much needed protein, food, it serves as a
source of income and employment to many and it has good returns.
Poultry keeping is becoming more and more capital intensive, and it is
very profitable.

The income from poultry business begins to emerge within 8 to 9

weeks for broiler or 20 to 22 weeks for layers.

Different development projects and incentives are provided by

Government of Pakistan to this sector ; National programs for the
control and preservation of avian influenza, Credit schemes by ZTBL,
livestock development policy and poultry development policy and
Reduce input costs policy in poultry production are notable.

Poultry farming, poultry processing and poultry feed were

recognized by the government as agro based food processing industry,
and given incentives like total or partial exemption from import duties
and sales tax and income tax holiday for number of years.

There is a strong increase in high-value agriculture and vertical

coordination in Asia. This vertical coordination into wholesaling in poultry
sector will allows them to standardize quality, improve bargaining power,
and achieve economies of scale in distribution. In addition, they usually
adopt a list of preferred suppliers who are known to be able to produce
consistently the quantity and quality demanded by the supermarket
chain.

The demand and supply mechanism, fluctuation in the rates of

day-old chicks and the skyrocketing prices of poultry feed are the main
reasons for fluctuation in prices of poultry products. Feed accounts for
more than 70 per cent production cost for poultry comes from feed
prices. Poultry feed prices have gone up by 22 per cent in 2007-2008.

The extraction of abnormal profit by middlemen reduces the profit

of poultry farmers and discourages them to expand the production unit.
Achieving international standards for being able to compete in the export
market is another proposed option but it would make much more sense
to concentrate on meeting domestic demand.
ix). Market Chain Analysis of Broiler Production Options for Small
Farmers in Rawalpindi District

Poultry production in Pakistan is an important part of agro industry;

however this industry is characterized by small and unorganized
operators, lack of disease control, uneven distribution of profits and lack
of technology.
Forty producers, ten wholesalers, ten retailers and thirty consumers for
poultry sector were interviewed. About 10 percent of the producers were
illiterate while the remaining 90 percent of broiler producers have been to
school for various years. 80 percent broiler respondents were head of the
family, 10percent were the family members, 5 percent were manager and
the remaining 5 percent were workers.
In the study area 82.5 percent were involved in the full time farming
while 17.5 percent was carrying part time farming activities. Poultry
farming was the main source of their livelihood. It has been observed that
majority of producers have greater than 11 years of experience
(45percent) while 22.5 percent producers have 9-11 years of poultry
keeping experience. Most of the farmers (77.5 percent) were having both
the Hubbard breed.
Of the market men who visited the producers for the purchase of
broiler comprised of contracting agencies (27.5 percent), wholesalers (20
percent), commission agents (47.5 percent) and retailers (20 percent).
The average business experience of commission agent, wholesaler and
retailers was 13 ,14 and 14 respectively.
Broiler production is a profitable business in the study area. With a CTO
of about 2.23 and PI of about 0.55, improvements in broiler production is
likely to increase the returns of broiler farmers.
To maximize profit from broiler production, therefore all inputs should
be used at their optimal level.
The difference between profit shares of farmers on the basis of selling
to different agencies was measured to identify different forms of
integration. The highest profitability index (PI) was 0.59 which was same
for farmers who sold to contract farmers and consumers respectively.
The highest capital turn over CTO was 2.46 for contract farmers while
2.42 for farmers who sold to consumers. The farmers who sold to retailers
and wholesalers have 1.93 CTO. The Lowest CTO (1.80) was recorded for
farmers who sold to commission agent. This indicated that to maximize
profit from broiler production, producers must have a close contact with the
demand side.

The low profit of small farmers having intermediaries in the market

chain is because the market is not competitive and one of the middleman
acts opportunistically to exploit the farmer
Broiler producers in the Rawalpindi district, mainly sold their produce
to commission agents (47.5%), followed by the contracting agencies
(27.5%) and wholesalers / retailer (20%). Only (5%) producers sold their
produce directly to consumers at their own farm.
The absolute cash margin of wholesalers and retailer received Rs.8 per
kg and Rs.7 per kg respectively while the commission agent received Rs.3
per kg.
The producers share was highest. The percent share of wholesaler and
retailer was high in comparison to commission agent in the marketing
chain.
Results show that wholesaler received highest percentage profit
margin (89 percent) followed by commission agents (85 percent). The
other market agencies including retailer and producer received 67 percent
and 46 percent respectively.
Feed prices, inappropriate marketing outlets, input prices, diseases,
lack of quality of inputs and unavailability of vet services etc. were the
major problems faced by the broiler producers in the area. The fluctuation
in live bird prices and day old chicks is the significant factor in losses to
small farmers. Feed accounts for more the highest production cost for
poultry.

x). Relationship between Production, Procurement Prices and Volume

of Procurement of Wheat in Pakistan

There has been continuing debate about the role of procurement prices in
the volume of procurement of wheat in Pakistan. It has been argued that
higher procurement prices would secure higher level of procurement .In
the present study on relationship between production, Procurement prices
and volume of procurement of wheat in Pakistan, the above mentioned
argument is statistically examined with historical view of the agriculture
sector of Pakistan.
The data used in the study has been collected from the secondary
sources. The main source of data is various issues of Agricultural Statistics
of Pakistan. Published by Ministry of Food, Agriculture and Livestock,
Islamabad. The period selected for the study is from 1980-81 to 2006-07
(26 years), as the recent data available.

Wheat has the major share in foodgrain. The overall performance in the
period of 26 years under study 2.70 percent was the growth rate of coarse
grain production and 2.76% for wheat in Pakistan. In 2000s wheat
production increase was the highest 7.35% in Sindh and NWFP was
second in ranking with 7.21% increase over the ten years. Considering the
overall performance within the study period of 26 years rate of increase in
wheat production was the highest in Balochistan (5.12%) inspite of the
fact that the area under wheat and its volume of production was small as
compared to other provinces.
At national level wheat production contributes from 70 to 76 percent to
the total foodgrain production Punjab is the major wheat growing province
among the provinces which is contributing from 50 to 58 percent of wheat
share to the total foodgrain production.
The farmers are forced to part with their surplus produce soon after the
harvesting when prices are generally at the lowest level. In Pakistan the
Government is playing effective role to facilitate the farmers by fixing
procurement price and procuring wheat from the farmers. The
Government has been procuring wheat through PASSCO and the Provincial
Food Departments for the past many years. Punjab is the major wheat
growing province of the country Therefore, the major share of the wheat is
procured from Punjab. Wheat procured from Punjab ranged between 70 to
80 percent. The overall increase in the procurement price from 1980-81 to
2006-07 was 632.76% in the 26 years of the period under study which
facilitated the expansion in the production of wheat crop.
The performance of achieving targets of production was more or less
satisfactory. The country either achieved the targets or remained closer to
it even in some years production was achieved above the target. The
quantity procured as percent of actual wheat production ranged between
20 and 45 during the study period of 26 year from 1980-81 to 2006-07.
The procurement of wheat statistically has the inverse relation with
procurement price and closely linked with the production. The change in
the production of previous year deeply influence the procurement. The
increase in the volume of procurement, procurement price and production
was the highest in the second decade of 1990s. the spectacular increase
in wheat production owed to the massive switch over to HYVs of wheat.
The second factor which added more to increase is the result of the use of
the new technologies.
It is believed that procurement depends for more on volume of production
and much less on the procurement prices.

The storage capacity available with the public sector in 2007 was 5242
thousand tones. Out of the total available capacity 82.77 percent is used
for wheat storage. There is a felt need to increase the storage capacity in
public as well as private sector.
The procurement price has inverse relation with the volume of
procurement as indicated by its regression. Coefficient which is minus
0.11 with t-value 0.008 highly significant at one percent level of
significance.
Cost is involved in each system which is introduced for the growth in
agriculture sector.
The existing agricultural marketing infrastructure in the country is
inadequate to meet the growing needs of an expanding wheat market.
Problems of storage and transportation are the fore most issues that
require quick and well planned solution one striking difference in
Government procurement price and purchasing of wheat by beoparies is
that the latter buy in village or even at the farm.
There is a need to economize the costs involved in the procurement of
wheat. The operation costs involved in the operation of wheat
procurement can be met by levying small cess on the production sold by
growers to these agencies.
However, the analysis is not intended to suggest that the procurement
prices have no role to play what so ever in increasing procurement.