Lahore: – The heavy duty on import of soybean meal is not logical because it is raw material of the poultry industry, which is not produced locally.
The PPA, in its budget 2016-17 proposals, has sought exemption from Regulatory Duty on the import of grandparent chicks and soybean meal, as both of them are not produced in the country and the entire edifice of the chicken production is dependent on them, said Poultry Association former chairman Abdul Basit.
He said that increase in feed cost to escalate poultry products, which constitutes more than 70 cost of the poultry.
Presently 10 per cent custom duty and 10 per cent sales tax on Soybean Meal have already raised the cost while an additional increase in sales tax on Soybean Meal as proposed in the coming budget of 2016-17 would destroy the industry fully.
The farmers are already paying 30 per cent regulatory duty on import of corn.
If these taxes and duty continued in budget 2016-17, it would be a big dream to buy chicken and eggs for public in coming days.
In November 2015 amendments were brought about in the tariffs to raise additional revenue by imposing Regulatory Import Duties and a 10 percent Regulatory Import Duty was levied on Live Poultry weighing less than 185 Grams falling under PCT Heading 0105-1100 which are essentially Day Old Grandparent stocks.
GP stocks are the foundation of poultry production sector which are not being produced within the country.
Earlier the import duty was 5 percent, however, now there is 5 percent import duty plus 10 percent regulatory duty – total being 15 percent.
He informed that there are only three genetic companies in the world, which produce these and sell them at a very high price ranging from $25-30/chick for production of Parent Stock females and males.
There was already an import duty of 5 percent; an additional 10 percent would only increase the cost of the seed, which produces Parent Stocks and Parent Stocks produces Day Old Chicks which subsequently produce broilers which are consumed by all classes of consumers including the lower income group as the chicken at times is even cheaper than pulses and vegetables.
Abdul Basit warned that the tax imposition could result in an upward jump in prices of poultry products, as huge taxes on poultry feeds will deprive the poor of cheapest source of animal protein at affordable price.
If the industry passes on this additional cost to the consumers they will be unable to purchase the expensive poultry products and if industry absorbs itself the higher cost, which is already fighting for the survival owing to ever-increasing cost of production, it will collapse.
The government’s move of taxing food products is in fact a blow to food security in the country where around 66 percent of the people are deficient in protein.
The animal protein shortage seems grave especially when it is compared with the protein intake of various developed countries like the United States, Canada, Germany, France, Japan and Britain, where the consumption of protein is 79-95 gram per capita per day.
Abdul Basit also said that despite high consumption of protein the United States was still providing subsidy of over one billion dollars per day on food security while the poor countries, like Thailand, was also providing substantial support to the poultry industry through its Livestock Department.
“The poultry sector is making a tremendous contribution in bridging the gap between supply and demand of animal protein requirements but now eggs and chicken will disappear from the scene after the current move of taxation.
PPA NZ chairman Rai Mansab said that with the continuous depletion of supply of red meat, poultry is the cheapest available animal protein for the masses, which constitutes 35-40 percent of total meat production in the country-an effective check upon the spiralling animal protein prices.
PPA NZ chairman Rai Mansab said that the poultry sector is one of the largest agro-based segments of Pakistan having an investment of Rs 700 billion.
It is worth mentioning here that despite all constraining factors the growth rate of this sector is 10 to 12 percent per annum.
He then appealed to the government to withdraw the decision to keep the cheapest source of animal protein in the range of poor.
Source: The Nation