Small investors receding as multinational companies proliferating

Small poultry farm owners are gradually losing the ground for business to big investors in the sector, particularly the multinational investors, amid the absence of a protective mechanism by the government.

The stakes of the multinational companies over the poultry sector have made a leap from 4-5 percent to 31-32 percent since 2007, while, at the same time, more than 50 percent of the country’s small poultry farm owners who have called it quits, according to insiders in the sector.

poltryWhile big companies have been able to reduce the cost of the farm inputs by initiating large-scale production of egg, day-old-chicks, feed and medicine on their own, small poultry farm owners, on the other hand, are counting higher prices for the inputs year-on-year in the recent past, and, in the way, forced to count losses, they noted.

Besides, there is no suitable loan scheme in the country for the small farm owners that can help them survive temporary dangers such as spread of avian influenza among the farm birds, disruption of transportation due to political programmes and price of the poultry meat or the eggs due to various market factors, they added.

President of Bangladesh National Poultry Farms Protection Council (BNPFPC) Khandker Mohammad Mohsin told the media that about 90,000 poultry farm owners shut down farms due to losses over the last decade, whereas the stakes of the big farms, particularly multinational ones, have improved.

“From 2010 till 2013, we’ve lost more than 40,000 small poultry farms.” he said.

A survey conducted by BNPFPC in 2010 showed 1,14,763 poultry farms were operating across the country at that time.

However, according to Department of Livestock Services (DLS), some 90,000 poultry farms remained operational in 2010.

Khandker Mohsin noted that although the small and marginal investors are retreating from the sector, multinational companies are proliferating.

“In 2007, multinational companies enjoyed only about 4-5 percent stake in the country’s poultry sector, whereas the stake has increased to 31-32 percent at present. They will have more than 50 percent stake of the market very quickly,” he claimed.

He said one of the key constraints for the small farm owners is that about 70-80 percent of their total expenditure is required for the purchase of inputs, including eggs, day-old-chicks, medicines and feed, most of which are produced by the big companies.

According to a survey by Breeders Association of Bangladesh in 2012, the highest number of boiler chicks is produced by CP Bangladesh, a Thailand-based multinational investment in the poultry sector in Bangladesh.

CP Bangladesh used to produce about 11 lakh ‘broiler’ chicks in a week back in 2012. This company is also one of the two major producers of ‘layer’ chicks in the country — the other top producer is Kazi Farm Ltd.

Prof SD Chowdhury of the Department of Poultry Science in Bangladesh Agricultural University, Mymensingh, said the government has a greater role to play to support the small investors in poultry sector.

“Small and marginal investors in the sector should be facilitated with easy loans. Besides, the government should ensure ample subsidies to the small farm owners in times of avian influenza outbreaks,” he said.

Animal Health Companies Association of Bangladesh (AHCAB) president Momin ud Dowlah said due to improper response of the government in times of bird flu outbreaks has led to immense losses of the small poultry owners over the last four-five years.

“Although the influenza outbreaks in the country are sporadic compared to India and China, the government must be equipped with a policy to tackle the threat. Affected small businesses must be brought under a support scheme of a kind to keep their stake alive in the sector,” he said.

Bangladesh Poultry Industry Coordination Committee (BPICC) convenor Moshiur Rahman said there has been no protective mechanism for the local small poultry farm owners from their big, multinational competitors.

He recommended initiating special insurance schemes for small poultry owners, and adopting a different, slightly conservative policy for foreign investment in the sector for the interest of the local small poultry owners.

According to DLS, the total investment in the poultry sector of the country stands near Tk 50,000 crore.

– UNB.