close
Friday March 29, 2024

Industry seeks lower import duty on poultry

By Jawwad Rizvi
July 14, 2016

LAHORE: The price of a day old chick has slumped down to Rs2-4 while the cost of production is well above Rs35, the Commissioner Animal Husbandry for the Khyber Pakhtunkhwa High Court, Peshawar evaluated as far back as 2012, while the current cost is even higher.

The industry players have serious concerns about the extremely low price of the chicks that has been prevalent for the last one and a half year.

The serious loss to the parent stock (PS) farmers and producers of day old broiler chicks has already started by way of premature selling of their breeding flocks for meat purposes.

They cancelled some of their orders for placement of PS, which would lead to reduced production, and as a result farmers of grandparent (GP) would have no option but to reduce their imports of the GP stocks. This decision would be further accentuated by the prevalent import duties of 21 percent.

According to the industry officials, once the GP placement was reduced, it would take up to two and a half to three years for it to come back to the position from where it dropped. During this time, the broiler chick production would be substantially reduced. Consequently supply of table birds and meat would be reduced; and as a result, the prices would shoot up.

In the presence of 21 percent import duty, the curtailment of imports would begin at a much earlier stage than it would have with duty free imports.

All seeds for food production, like seeds for vegetables, cash crops, etc, were subject to a maximum of three-five percent import duty. Poultry seed was the only seed which has been subject to 21 percent import duty.

This 21 percent import duty on GP amounts to Rs690 on one day old female baby chick, which when grown up produces female parents. There are other levies and taxes, amounting to Rs270 per female GP chick, the major being landing charges of one percent and half a percent Civil Aviation throughput charges.

Meanwhile, the Pakistan Poultry Association (PPA) suggests that the entire import duty, including regulatory duty should be withdrawn immediately.

There was no cogent reason to levy regulatory import duty on GP. They are not produced within the country nor are a luxury item. GP are produced by only three genetic research companies in the world – all of them are American companies.

The GP are being imported by only four or five companies in Pakistan and the total quantity of imports was less than 400,000 female GP per annum, known as the ‘D-Line’. The total revenue for the exchequer would be an insignificant amount, but the total burden of the cost of import duty would be borne by the day old GP chick, which the PPA was certain could not be borne by them.

It would have to be borne by the consumers in the face of increased prices because of ultimate lower production of PS.

The Poultry Association has strongly recommended that the import duty on PS and GP should be maintained at three percent, ie, the same as being levied on seeds for other agriculture produce.