Structural Changes in Thailand’s Poultry Sector and its Social Implications Viroj NaRanong Thailand Development Research Institute November 5, 2007
Overview of Thailand’s broiler • With the ability to keep its price down
Nominal Retail Prices of Pork, Beef, and Chicken in Bangkok Bath per Kg. 180 Pork Beef 160 Chicken 140 120 100 80 60 40 Source: The Ministry of Commerce. 20 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
• Broiler per capita consumption has increased steadily with GDP per capita
Figure 7 Broiler consumption (kilogram per year) and GDP per capita in Thailand KG. Baht 16 120,000 broiler GDP per capita 14 100,000 12 80,000 10 8 60,000 6 40,000 4 20,000 2 0 - 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source : Thai Broiler Processing Exporters Association and NESDB.
Per-capita Meat Consumption in Thailand 1995-2006 (Kg.) � � 1 9 9 5 � � 1 9 9 6 1 9 9 7 � � 1 9 9 8 � 1 9 9 9 2 0 0 0 � 2 0 0 1 � 2 0 0 2 � 2 0 0 3 2 0 0 4 � 2 0 0 5 � � � ��� � � � � � � � � � 2 0 0 6 Source: 1995-2004 Rabobank/USDA/FAO 2005-2006 TDRI’s estimation based on OAE’s data and DLD’s formulae
• As the only significant exportable meat, its production is even relative larger than other meat livestock
Figure 3. Thailand Meat production, 1980-2005 . tonnes 2,500,000 others Cattle meat Pig meat 2,000,000 Duck meat Chicken meat 1,500,000 1,000,000 500,000 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source: FAO STAT.
Structural changes in the poultry sector over the past decade • Technological changes which lead to increasing scales of production (mainly the adoption of evaporative cooling house) • Moving away from Contract Farming to Vertical integration
Structural changes: From contract farming to vertical integration Why contract farming? • The companies (integrators) – more flexibility in adjusting the volume of production to seasonal and irregular changes in both domestic and export demand. – Lower investment and adjustment costs (including cost of having idle capacity) • The contractors (farmers) – Less risky than normal agricultural production – Relatively lucrative in a “normal” year
Structural changes: From contract farming to vertical integration Why moving away from contract farming? • The companies’ (integrators’) choice – to meet the increasing trade requirements: food safety and animal welfare. • Five years ago, Nitrofurans and Dioxin were detected in some lots of broilers imported from Thailand to the EU. • Some major exporters switched most of their production toward in-house production so that they would have better control on all the input uses. (“From farm to table”) • Animal welfare requirements by most EU importers also push them toward such a move. – The most significant driver, however, was the HPAI outbreaks in 2004 and four recurrent outbreaks thereafter.
The first four rounds of HPAI outbreaks • The fifth round (early 2007) was also mild and involved more grazing ducks than broiler farms
Impacts from outbreaks: Export • Export of raw/frozen broilers has been banned ever since • Fortunately, some leading exporters had already begun their precooked/further product lines • Other exporters took a while, but are able to follow the leader shortly
Thailand export value of poultry. Million Baht 45,000 Frozen poultry cuts 40,000 Prepared poultry 35,000 Total 30,000 25,000 20,000 15,000 10,000 5,000 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Source: The Ministry of Commerce .
Disease controlled measures: The long list The list of the DLD’s disease control measures conducted in 2006 (see Box 1) • Stamping out of animals in affected premises with 75% compensation (393,430 birds destroyed) • - Disposal of carcasses and eggs, and infected/risk materials (e.g., litter, feed, egg flats, etc) • - Disinfection of affected premises, all infected/contaminated materials and other risk materials • - Quarantine and movement control • - Nationwide active clinical surveillance and notification for implementing disease control once a case is suspected according to the current AI case definition • - Intensive surveillance (known in Thailand as “The X-ray Campaign”) for 3 rounds in all at-risk areas during 1-28 February, 1 June-31 July, and 11-30 September 2006 (145,978 samples collected) • - Routine sampling prior to movement (a total of 522,072 cloacal swabs were collected between January and October 2006 • - Poultry restocking in the affected areas cannot be carried out until 90 days after the completion of disinfection • - Ongoing long-term campaign on biosafety improvement • - Restructuring of free-grazing ducks to a housing system, registration and flock identification for 7,333,987 birds of 3,109 owners • - Registration of fighting rings/arenas (2,400 holdings were listed) • - Identification of fighting cocks (248,877 birds of 107,163 owners were registered) • - No AI vaccination allowed
The most significant disease controlled measures • (Initially) The mass poultry killing (63 millions in 2004—with 100% and then 75% compensation) • Farms with opened housings are requested by the DLD to upgrade to closed (evap-type) farms – The DLD has not changed its formal farm-standards, though (there is still official standard for opened farm) • (However) Farms that did not comply with the request are not allowed to move their chicken out or to restock the new batch of day-old-chick
New measures • Biosecurity • Compartmentalization (since 2006)
What happened to the farmers? • We telephone-survey our 2002/03 TDRI/IFPRI/FAO SHE Study broiler and layer samples • The samples in the previous study were collected from several provinces to reflect divesrsity, but was not representative for the whole country
Activities the Broiler Farms in our Number of %respon % of 2003 Size 2003 study do in 2007 farm dents samples S ML MH L n.a. Continue to operate the broiler farm 59 71.1 34.7 24 20 8 5 2 - Raise more broiler chicken than 6 7.2 3.5 1 1 2 1 0 in 2003 - Raise same number of broiler as 47 56.6 27.6 23 18 5 4 2 in 2003 - Raise fewer broiler chicken than 6 7.2 3.5 0 1 1 0 0 in 2003 Stop operating the broiler farm 24 28.9 14.1 10 6 2 4 2 Switch to other poultry farming - Duck Farm 5 6.0 2.9 2 1 1 0 1 - Layer Farm 1 1.2 0.6 1 0 0 0 0 Switch to other livestock farming - Swine Farm 2 2.4 1.2 0 2 0 0 0 - Cattle Farm 1 1.2 0.6 1 0 0 0 0 - Fish Farm 1 1.2 0.6 0 1 0 0 0 Rent the farm out (still being broiler 2 2.4 1.2 2* 0 0 0 0 farm) Switch to Other Crops 7 8.4 4.1 1 2 1 3 0 Switch to retail business 2 2.4 1.2 2 0 0 0 0 New occupation not specified 3 3.6 1.8 1** 0 0 1 1 Total Respondents 83 100.0 48.8 34 26 10 9 4 Unable to contact via telephone 86 n.a. 50.6 Number of Observations in 2003 170 100.0
broiler farms • We were able to contact 49% of our 170 samples • Among the respondents, – 71 percent continue to operate on their broiler farms • Over a half operate the farm of the same size as they did in 2003, with about 7% expanding and another 7% decreasing their farm size. – Among the 29% who discontinued their broiler farms, • 6 out of 24 respondents switched to another type of poultry farm (duck or layer) • 2 have rented their broiler farms out, presumably to other broiler operators. • The great majority of the broiler farms are still in poultry business. • Of those minorities who left the poultry business, – 4 are still in the livestock business. – 7 switched to crop farming. – A few moved out of agriculture (retail business). • Large broiler farms in our samples also affected adversely (4 out of 9 left the poultry industry).
Table 12 What the Layer Farms in our 2003 study do in 2007: A Telephone Survey Result % of Size 2003 Number of farm % respondents Form sample M s S ML H L 1. Continue to operate the layer farm 26 66.7 26.8 2 6 5 13 - Raise more chicken than in 2003 5 12.8 5.2 0 0 0 5 - Raise the same number of chicken as in 2003 6 15.4 6.2 0 2 2 2 - Raise fewer chicken than in 2003 15 38.5 15.5 2 4 3 6 2. Switched to other activities 13 33.3 13.4 4 5 3 1 Eggs Retailer 3 7.7 3.1 2 0 0 1 Fish Farm 4 10.3 4.1 0 2 2 0 Swine Farm 2 5.1 2.1 0 1 1 0 Other Agriculture 3 7.7 3.1 2 1 0 0 Non-Agriculture 1 2.6 1.0 0 1 0 0 Total Respondents 39 100.0 40.2 6 11 8 14 Unable to contact via telephone 58 n.a. 59.8 Number of Observations in 2003 97 n.a. 100.0 Note: Number of Observations in 2003 are 97 farms Small (S)= 1-5000 , Medium Low (ML) = 5001-10000, Medium High (MH) = 10001-20000 Large (L) = >20000 Source: Telephone survey by TDRI, March 2007
Layers • Similar result to broiler • Most respondents who discontinued their layer business moved to another livestock or other agricultural acitivities.
Recommend
More recommend
