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Navigating Roadblocks in Poultry: Strategies and Policies for Sustainable Development

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LightCastle Analytics Wing
December 26, 2024
Navigating Roadblocks in Poultry: Strategies and Policies for Sustainable Development

Bangladesh has a long-standing tradition of backyard poultry farming, initially dominated by rural women and youth farmers. Over time, semi-urban and urban farmers have increasingly participated to meet the rising demand for eggs and meat, signified by average per capita consumption of 12.7 and 26.2 grams respectively. Consequently, the poultry industry has witnessed consistent growth at a CAGR of approximately 8-10%. Despite this progress, the sector continues to grapple with numerous challenges. External disruptions like the pandemic, geopolitical tensions, and currency fluctuations have strained supply chains and raised costs, while internal challenges such as political transitions, weather events, and the energy crisis add to the industry’s difficulties.

On November 18, 2024, PoultryTechBangladesh convened a roundtable discussion, jointly implemented by Larive International and LightCastle Partners, in collaboration with the Bangladesh Poultry Industries Central Council (BPICC) and with the support of the Dutch Embassy. The event assembled a diverse group of industry leaders, policymakers, and development partners to deliberate on critical challenges within the poultry sector. Key topics included stabilizing supply and demand, enhancing biosecurity measures, and improving food and feed safety standards. Additionally, participants explored investment opportunities aimed at modernizing the sector and bolstering its resilience to climate change. The current article has been developed based on the insights and outcomes of the discussion.

Challenges Across The Value Chain

The poultry sector has long struggled with a persistent demand-supply imbalance. A primary factor contributing to this issue is the unchecked  production of Day-Old Chicks (DOC). Excessive DOC production leads to a significant price decline, undermining profitability for producers. Consequently, small hatcheries are pushed out of the market, potentially resulting in future DOC shortages and price increases. This ongoing instability poses challenges to effective long-term planning within the industry.

  • Import Dependency: The reliance on imported soybeans and corn for feed has risen post-Russia-Ukraine war, with Bangladesh now importing 40% of its soybean demand, and is expecting an increase in corn imports. In addition, 2% Tax Deducted at Source (TDS) on maize and 5%  Advance Income Tax (AIT) on feed additives create further financial strain.
  • Supply Demand Imbalance & Price Volatility Excess production of Day-Old Chicks leads to market instability, with small hatcheries exiting, creating future shortages and price hikes.
  • Climate Change: Severe flooding and heat waves have resulted in poultry losses, further straining Bangladesh’s food production and economy due to climate change impacts.
  • Biosecurity and Food Safety Challenges: Poor biosecurity practices and misuse of antibiotics lead to foodborne illness risks and poor hygiene, contributing to safety concerns across the poultry supply chain.
  • Circularity and Waste Management: Improper poultry waste disposal contributes to pollution and disease risks, and a large portion of by-products is wasted without being processed into value-added products.
  • Lack of Cold Chain Infrastructure: The absence of cold chain infrastructure leads to spoilage and foodborne risks, with $2.4 billion in annual agricultural losses. Investment opportunities in cold chain facilities are hindered by restrictive regulations and high tariffs, limiting the growth of processed poultry and export potential.

Policy Guidelines and Strategic Proposals

Bangladesh’s poultry sector has considerable growth potential, with demand projected to double by 2050 as a result of increasing population and income levels. Effective policy development will be crucial to tackle challenges with regards to overproduction, export standards, and infrastructure.

  • Review AIT and Taxation on Feed Raw Materials and Machinery: Reevaluate the Advance Income Tax and taxation policies on feed raw materials and machinery to reduce operational costs
  • Enhance Domestic Raw Material Production for Feed: Strengthen the domestic production of essential raw materials for poultry feed to reduce import dependency.
  • Regulate DOC Production Based on Data-Driven Projections: Implement data-driven projections to regulate the production of DOC and ensure a balanced supply-demand dynamic.
  • Promote Public-Private Partnerships (PPPs) and Foreign Investment in Critical Infrastructure: Encourage the development of critical infrastructure, such as storage facilities, processing plants, and cold chain systems, through public-private partnerships and foreign investment.
  • Support Investment in Circular Economy Initiatives: Promote investments in circular economy initiatives to enhance resource efficiency and reduce environmental impact.
  • Launch Food Safety Awareness Campaigns: Implement public awareness campaigns to educate industry stakeholders and consumers about food safety and responsible practices.
  • Enhance Biosecurity and Secure International Certifications to Drive Exports: Strengthen biosecurity measures and obtain necessary international certifications to support export expansion and meet global standards.

For further insights into sustainable pathways for the poultry sector, please refer to our upcoming Policy Paper,  set to be released soon at the PoultryTechBangladesh website.


Profile
WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a systemic and data-driven approach to create opportunities for growth and impact. We are an international management consulting firm which creates systemic and data-driven opportunities for growth and impact in emerging markets. By collaborating with development partners and leveraging the power of the private sector, we strive to boost economies, inspire businesses, and change lives at scale.

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