Speakers at a round table estimated that 60,000 poultry farmers have shut down due to financial losses.
The event, “Bangladeshi Poultry Industry: Prospects and Challenges,” organized by Dhaka Tribune in collaboration with Kazi Farms, was held at the Krishibid Institution Bangladesh (KIB). It brought together stakeholders to discuss problems faced by farmers, risks, and regulatory hurdles.
Kazi Zahin Hasan, director of Kazi Farms Limited, explained that the markets for eggs and chickens are competitive markets with thousands of sellers, and that syndicates can’t control such markets. He said: “Supply is not constant, and demand is not constant either, so the market price naturally fluctuates.”
Prof Rushad Faridi of Dhaka University said that markets for most essential commodities are competitive. A syndicate is possible when a market is dominated by some large importers or traders, but study is needed before one can determine whether a syndicate controls prices.
Md Shariful Haque, deputy director of the Department of Livestock Services, spoke about government efforts to support farmers and close the gap between production costs and consumer prices. He said: “Egg prices rise in September and October when supply of vegetable and fish declines.”
Mahbubur Rahman, president of the Breeders Association of Bangladesh (BAB), highlighted risks in the egg industry. He said: “Middlemen always make profit, while farmers face losses for much of the year.” He warned that more regulations will discourage investment.
Barrister ABM Hamidul Mishbah criticized the Competition Commission for filing baseless cases. He said that producers have been unjustly fined without first conducting economic analysis. This discourages investment, leading to higher prices.
Khalid Abu Naser, former director of the Bangladesh Competition Commission, said that companies with less than 10% market share should not be accused of price manipulation.
Aanjan Majumder, CEO of Bangladesh Organic Hub, called for a National Poultry Board, saying, “Poultry stakeholders currently deal with 10 ministries and 14 departments. There should be a single regulator.” He also said that climate change has had a negative impact on production.
AKM Fahim Mashroor, former BASIS president, suggested imports of eggs and day-old chicks for a limited time to address short-term shortages.
Debashis Nag of the Bangladesh Poultry Industries Central Council said that sharing price information on social media is not a crime.
Nazmul Hasan of Quality Feeds Ltd said that the price of feed depends on the price of imported feed materials.
Farmers and journalists, including Sultan Mahmud and Khawaza Main Uddin, also participated.
Speakers cited varying data on egg demand. While the Department of Livestock Services estimates an annual per capita demand of 104 eggs, one farmer privately remarked, “Even I cannot afford to eat two eggs a week.”
What the speakers said
Kazi Zahin Hasan, director of Kazi Farms Limited
The egg and chicken markets are textbook examples of competitive markets with thousands of producers. Kazi Farms was accused of manipulating the price of eggs in July 2022 when our share of the egg market was only about 3%. This accusation was unreasonable. A company with such small market share can’t control the price.
Supply is not constant, and demand is not constant either. It is natural that sometimes supply and demand will not match, and market prices will fluctuate.
In October, the price of eggs was high because many egg farms were affected by floods, creating a shortage. On the other hand, during winter, consumers buy more winter vegetables and eat fewer eggs, so the egg price falls.
When there is an over-supply of day-old broiler chicks, the market price falls to Tk20 per chick, and hatcheries make huge losses. If a cartel controlled the market for chicks, the chicks would never be sold at a loss.
The Competition Commission has filed unreasonable cases against poultry companies. There is no longer an investment-friendly environment in the poultry industry. The environment must be made investment friendly.
Prof Rushad Faridi, assistant professor of Economics at Dhaka University
We are not denying the possibility of price manipulation, but understanding prices requires proper analysis. Markets for 90% of daily necessities are competitive. However, some necessities are imported, and there is a possibility that large importers and traders can form syndicates. This is called collusion, which is a crime. However, it is not easy to prove. Proper investigation is required to prove it.
Allegations of syndicates controlling market prices must be supported by data. Misreporting can harm the industry and create unnecessary panic. To understand whether there is a syndicate, we need to go deeper. Research is needed.
Md Shariful Haque, deputy director of the Farm Branch at the Department of Livestock Services
We have several programs to support farmers across the country and promote small farms as well as commercial poultry development. However, the market is not efficient. There is a large gap between the egg production cost and the price paid by consumers. This gap often leads to criticism.
There is a discussion about why the price of eggs and chicken is increasing. Our ministry is working with marginal and medium size farmers. There are 80 lakh cattle and poultry farms registered with the government. And work is underway to protect these farmers across the country, support production, and take their products to the consumer.
Kawser Ahmed, poultry farmer
We are farmers. We often buy chicks at Tk 50, but then the price falls. Then those farmers who bought chicks a higher price are not able to cover the production cost, and make loss, and have to go out of business. I have now reduced my poultry business from thirty thousand to ten thousand because I have made huge losses at different times.
Mahbubur Rahman, president of the Breeders Association of Bangladesh (BAB)
60,000 farms have closed. If those who are engaged in this complex business are not benefited, they will withdraw from this business.
The egg business is not like other trades, it is a risky industry. Middlemen in the supply chain often profit the most, while farmers bear losses most of the year. Farmers only make a profit for brief periods, and even this profit becomes the focus of discussions.
If legal action is taken against the farmers, or if the price is fixed at a low level, farmers will become even more discouraged.
Aanjan Majumder, chief executive officer of Bangladesh Organic Hub
When farmers produce eggs, DLS issues licenses to them. The ceiling price is determined according to the Agricultural Marketing Act 2018 and the Policy of 2021. That is implemented at the field level by the Directorate of Consumer Rights Protection. Due to the lack of coordination between government agencies, the industry is suffering. There are 10 ministries and 14 departments involved in poulry industry. A National Poultry Board needs to be formed with representatives from all of these.
We are not discussing the issue of global warming. We have seen sudden floods and heavy rainfall. Farmers were not able to save their chickens. This had a direct and indirect impact on our production. Fall in production happens because of natural causes.
Barrister ABM Hamidul Mishbah
We need to study markets at in detail. What is the market share of the producers? Is there any barrier to entry? Market prices can increase because of interruption in transportation, fuel price, and extortion. All of these affect the supply chain. These factors must be analyzed to understand whether a syndicate is the reason for an increase in prices.
Bangladesh Competition Commission has filed cases against large poultry producers and fined them without conducting any economic analysis. According to the law, without economic analysis it can’t be established that a cartel exists. So this was an injustice to the companies. This kind of government action discourages investors and negatively impacts production, which ultimately leads to price increase.
Khalid Abu Naser, Former Director, Bangladesh Competition Commission
When the price increases, the root cause of it must first be known. Whether it is caused by demand or production, and whether it is a seasonal problem.
If one reads the decisions issued by the Competition Commission, one can see that some of these decisions are questionable. If a company has only 3% market share, it should not be accused of manipulating prices. In other countries, a company cannot be accused of price manipulation if its market share is less than 10%.
Debashis Nag Secretery, Bangladesh Poultry Industries Central Council
We proposed to the government to form a poultry board. Then it will be easier for the government to take decisions and to solve problems. Many agencies are related to the chicken and egg business, and they each think, 'I am the authority'. Farmers are being harassed at various stages, and we have written to the Ministry of Fisheries and Livestock about this at various times.
Our organization is an association, not a business, but it was also accused of involvement in price manipulation because we shared market price information on social media. I asked the Commission to show me which government rule was violated by sharing price information on social media, but they were not able to show me.
Nazmul Hasa, Sr Officer-Marketing Affairs, Quality Feeds Ltd
The pricing of poultry feed depends on the international market. We have to import raw materials. Pricing is based on that. In the feed industry we calculate the pricing considering the farmers. If the farmers do not survive, our companies will not survive.
Currently, we see that the farmers are not recovering their production cost. If the farmers do not receive a fair price, our sector will not exist. It is important to increase benefits to the farmers, by minimizing the profits of the middlemen.
AKM Fahim Mashroor, former President of BASIS
If we talk about supply, the price of the dollar is increasing, the price of raw materials is increasing. As a result, the cost of production is increasing. The government should take steps to reduce the price of the dollar.
It is seen that no insurance product has been created to serve poultry farmers in Bangladesh. Farmers can’t insure their chickens, so banks don’t want to lend money to farmers. As a result, farmers are dependent on middlemen. Farmers need insurance and bank loans.
As there is sometimes a shortage of eggs, and sometimes a shortage of day-old chicks, the solution is to import these goods for a limited time whenever there is a shortage.
Khawaza main Uddin, journalist
Everyone is saying that the media is always talking about syndicates. Of course, the media has a responsibility. People talk about media bias, but to me it seems like urban bias. Most of the time, the reporters are from the city. And the farmers are outside the city. The reporter is not talking directly to the farmer. These reports are being made from the city by talking to the traders.
In the journey of the poultry industry over the past three decades, many farmers have improved their position in society. If there are no natural disasters, and the price is right, they will move forward quickly. However, we are not keeping track of the ones who have fallen behind.
Sultan Mahmud, journalist
I think the main problem is the lack of information. The poultry industry is not able to develop, the market is being ruined, the producer is not getting the right price, and the consumer is not able to buy at a fair price.
In my work, I have tried to talk to most of the stakeholders of this sector. The media is often accused of making reports immediately without information. However, the reality is that there is a big difference in the media today compared to before.
