The installed capacity of Iran’s poultry industry is 3.2 million tons per year and given the domestic consumption of 2 million tons, there is an idle capacity of 1.2 million tons in this sector, according to the head of the Agriculture Commission of Iran Chamber of Cooperatives.
Referring to government restrictions on chicken exports, Arsalan Qasemi added that if the ground is prepared for sustainable exports, industrialists will be encouraged to produce and prices will be adjusted in the market and they will be able to import their own poultry feed.
According to the official, Iran’s poultry industry imports 60% of its needed feed and inputs.
“If the government allows exports, production can reach full capacity and industrialists can provide for their own inputs,” he was quoted as saying by IRIB News.
Qasemi noted that due to Iran’s climatic conditions, the production of poultry feed is not an option, hence it is imported from Brazil, Russia and India.
“As we speak, they are using Iran’s mainland for transit of Turkey’s chicken exports to Afghanistan. Should the idle capacity be used, our industrialists can become exporters,” he concluded.
Key Sub-Sector of Agronomy
The poultry industry is one of the most important sub-sectors of the agricultural economy in Iran.
The industry produces about 2.65 million tons of chicken meat worth $6 billion per year, which ranks first among the top 20 products of Iran’s agriculture sector, Reza Mobser and Farrokh Qobadi, economic analysts and poultry market players, wrote for the Persian economic daily Donya-e-Eqtesad.
In addition, 1.5 million tons of eggs (worth $3 billion) are produced in the country annually which, together with chicken meat, create an added value of $5 billion and play an important role in the country’s gross domestic product, they said.
Poultry industry and its related supply chain have expanded in the country during the past 60 years, thanks to the latest technologies; it has become one of the most modern industries in the country.
“As hundreds of thousands of skilled workers are employed in this sector, it has the highest employment rate among all the industries of the country. Most importantly, when it comes to food security, which is the main concern of all governments in the world, the poultry industry shoulders the main burden of providing protein; it has been able to achieve a per capita consumption of 30 kilograms of chicken meat for the 85 million people of our country,” they said.
Hard-Hit by Mandatory Pricing
However, the sector has turned into a loss-making industry under the pressure of mandatory pricing and is losing job opportunities at an increasing rate, the analysts said, adding that the number of chicken farms that have gone bankrupt in recent months has been unprecedented.
“The misguided and wrong policies of the Agriculture Ministry, and government-mandated pricing in particular, have adversely affected the economy of the agriculture sector … The method of pricing chicken after the discontinuation of subsidized import policy [in May 2022] — the so-called ‘economic surgery’ — is a clear example of the destructive measures of the government. This is a very clear example of a $10 billion industry that plays an effective role in creating food security, stable employment and gross domestic product with an added value of more than $5 billion, which today has lost at least 10% of its last year’s capacity,” the article reads.
The rise in prices of goods and services accelerated at an unprecedented pace after the government decided to overhaul the import subsidy system.
The government move saw the abolition of the controversial practice of allocating cheap dollars at the parity rate of 42,000 rials, locally known as the Preferential Foreign Currency, to import essential goods, including poultry feed.
The market value of the dollar is currently just below 500,000 rials.
“Until now, we have been paying to producers [read importers] but now the subsidies go to consumers. In fact, the Preferential Foreign Currency has not been ceased, rather the allocation method has changed,” President Ebrahim Raisi said in a televised speech on the eve of the introduction of the move in May.
In his speech, Raisi emphasized that the removal of cheap dollar allocation will not lead to a price rise in wheat, flour and medicine. However, the move has led to a dramatic rise in the prices of essential goods. In fact, the prices of all commodities and services have also risen suddenly in a ripple effect.
Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.
“A look at the main index of this industry, i.e., day-old chicken production, shows that we will face a 20% decrease in chicken meat production in the first quarter of FY 2023-24 compared with the corresponding period of last year. That is synonymous with the decline in GDP, employment, per capita income and the persistence of the cycle of poverty as well as the shortage of chicken meat in a country that has an annual export capacity of 700,000 tons of the same product.”
Referring to the destructive effect of mandatory pricing in poultry industry, the authors said those in charge of the poultry industry have intensified price suppression instead of putting forward a plan to save this industry and paying attention to their responsibility in financial and monetary policymaking and controlling inflation.
“They put pressure on the producers. They proudly talk of their plan to import 50,000 tons of fresh chicken meat, as they did about red meat after the practical destruction of production. From the viewpoint of desperate poultry farmers, the influence of ‘import mafia’ has turned the Agriculture Ministry into the agent of creating a trade organization [read import organization],” they said.
33% Drop in Production
According to the Statistical Center of Iran’s latest reports, a total of 126,982 tons of poultry meat were produced in Iran’s official slaughterhouses during the second month of the current Iranian year (April 21-May 21), registering a 33% drop in output compared with last year’s corresponding period and a 14% decrease compared with the previous month.
According to the Statistical Center of Iran, chicken accounted for 123,218 tons, or 97% of the total production.
The production of other types of poultry, such as turkey, quail, ostrich and partridge, stood at 3,764 tons, accounting for 3% of the overall output during the period under review.
