The poultry industry, seeing vigorous growth over the last few decades to become the key affordable source of egg and meat, has been affected severely by the pandemic pushing thousands of farmers out of business.
Sector insiders say many farmers could not take the losses as the steep drop in demand forced them to sell chicken below cost.
The demand for broiler chickens fell due to lockdowns and restrictions on social events and eateries, they add.
Industry sources say 50% of broiler chickens produced are consumed at home. The other half is consumed at various social events such as wedding receptions and in schools, colleges, universities, offices, restaurants and travel spots.
Poultry meat production has declined by 40%-45% over the last one and half years from around 90,000 tonnes per month in pre-pandemic times, according to the Bangladesh Poultry Industry Central Council (BPICC).
More than 40% of farms have stopped production as they could not absorb pandemic-induced losses, the BPICC said.
At present, farmers are selling broiler chicken at Tk90-95 per kg, while their production cost is Tk105 per kg.
There are around 90,000 registered poultry farms in the country. The actual number is more than one lakh, including the unregistered, according to the Department of Livestock Services.
Moshiur Rahman, president of the BPICC, told The Business Standard, "Thousands of farmers have lost their capital. If they cannot resume production, the sector will not be able to turn around."
They need cash support to resume production, he added.
Over the last four decades, the industry has developed into a Tk35,000 crore sector, which was meeting more than 40% of the demand. Before the Covid-19 hit, the growth of this sector was 12%-15% annually but it turned into a negative growth in the last one and a half years owing to the pandemic, industry people said.
Sirajul Islam Chowdhury, a poultry farmer from Satkania upazila of Chattogram and also the president of the Greater Chattogram Poultry Association, has been in this business for 23 years. He had 20,000 broilers and 6,000 golden breed chickens at his farm. But his poultry farm shut down four months ago with a loss of around Tk1.5 crore.
During the pandemic, at least 2,000 small and large poultry farmers have lost their capital and closed down their businesses like Sirajul. If the situation does not improve, a few thousand more poultry farms will be closed, said business insiders.
Rakibur Rahman Tutul, president of the Bangladesh Breeders Association and director of the Chattogram Chamber of Commerce and Industry, said there are 7,000 small and large poultry farms in the district. Of them, 2,000 farms have been closed. They now have no income.
According to the Greater Chattogram Poultry Association, around two million chickens were produced monthly in Chattogram, Chattogram Hill Tracts and Cox's Bazar. This number has now come down to only eight lakh as the demand for poultry chicken has dropped by 60%.
Riton Prasad Chowdhury, secretary general of the Greater Chattogram Poultry Association, said, "The current production cost for per kg poultry chicken is around Tk110. But farmers are being forced to sell at Tk88-99 per kg wholesale. The wholesale price of golden chicken is Tk155 per kg. But the production cost is more than that."
The overall situation of this sector across the country is similar to Chattogram.
The price of chicken feed has gone up by Tk6 per kg in the last six months and the price of medicines have also increased by about 20%. As a result, production cost of each broiler chicken ready for sales has increased by about Tk25.
Affected poultry traders said they have no capital to restart their business amid the current situation.
Shahadat Hossain, secretary of Mirsarai Poultry Association, Chattogram, said, "My farm had one lakh broilers and layer chickens. But continued losses made my business shrink. There are now about 40,000 chickens on the farm."
Livestock officials said farmers were given cash assistance a few days ago but their troubles are not going away soon because of the losses.
Eggs production drops
Egg production has also declined. In the fiscal 2019-20, 1,736 crore eggs were produced. But, egg production has decreased by 35%-40% during the pandemic. Eggs are being sold at Tk95-105 per dozen in the retail market.
According to the Trading Corporation of Bangladesh, the price of broiler chickens has declined by 6% in the last one month.
Dr Shaikh Azizur Rahman, director general of the Department of Livestock Services, told TBS that it is true that poultry meat production has declined following a fall in demand. But it remains to be seen whether what entrepreneurs claim about production fall is correct.
Farmers are suffering a provisional loss and many might have closed down their farms. But they have still kept their infrastructure intact and they can resume their production when demand rises, he added.
Government policies and private investment
Sector insiders say commercial poultry production in Bangladesh started in the eighties. Eggs & Hens ltd, a private enterprise, and later the Biman Bangladesh Airlines started poultry production in the country.
Local NGOs and international aid agencies played a significant role in popularising poultry farming through motivational initiatives, loan support, training and providing chicks to start with. Village women took a leading role as they found poultry farming an easy way to earn.
According to research, between 1990 and 2007, the sector met 37% of the local demand for meat. As the labour-intensive poultry industry does not need high capital, it is considered as one of the tools to reduce poverty along with creating employment opportunities, the research said.
At that time, the annual profit of broiler farms was 154% of total investment, while it was 107% for layer farms. People started farming chickens extensively because of good returns.
Support measures from the government helped the sector grow into an industry through promoting commercial farming. The government formulated the National Poultry Development Policy in 2008, which recommended for loans without collateral for trained poultry farmers.
Domestic commercial farms apart, some foreign firms based in India and Thailand also entered production in Bangladesh. Investments also poured in feed processing, parent stocks, breeding and marketing.
Since the influx of private investment, six big companies, including Paragon, Kazi, Rafit, Aga, Aftab and Narish, started producing one-day-old chicks from their own grandparent stock.
Besides, many companies started to produce biogas and electricity from poultry manure to meet their internal demand.
The feed producing sector is known as backward linkage of the poultry industry. Some 6.57 million tonnes of feed are produced in the feed mills per year and 65% of that meets the poultry sector's demand, according to the Feed Industries Association.
On the other hand, a domestic industry of veterinary medicines has developed based on the livestock sector, which has now grown into a Tk3,000 crore market. It manufactures essential medicines for poultry, cows, goats, sheep and other animals. However, 30% of medicines still need to be imported, according to the Animal Health Companies Association of Bangladesh.