MARKETING MARGINS OF BROILER IN AZAD JAMMU KASHMIR: CHALLENGES AND OPPORTUNITIES

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1 Sarhad J. Agric. Vol. 23, No. 1, 2007 MARKETING MARGINS OF BROILER IN AZAD JAMMU KASHMIR: CHALLENGES AND OPPORTUNITIES Tahir Zahoor Cholan ABSTRACT This paper is based on primary data collected from 60 poultry producers, 10 collection agents, 10 poultry retailers and 100 poultry consumers from Mirpur district of AJK during It is most potential area of AJK for poultry (broiler) farming but unfortunately there is no hatchery and poultry feed mill in entire AJK. There is no proper poultry marketing system in AJK and sale prices of Jehlum and Wazirabad were prevailed there. Marketing chain comprised of collection agent and poultry retailer; in which collection agent collected the poultry birds from producers and supplied to retailers. Poultry producers incurred Rs.41/- per kg as production cost, while collection agent and retailer spent Rs.0.45/- and Rs.1.15/- per kg (live weight) as marketing cost respectively. Percentage margin of poultry producers was 15% that is very nominal as compared to collection agent and retailer i.e.78% and 89%, respectively. INTRODUCTION A well balanced diet is very essential for health, vigor and production capacity of the people. Protein plays an important role in the formation of balanced human diet. Most of developing countries are facing protein shortage and national/international strategies are required to overcome the present day food crisis. In early sixties the need of commercial poultry was felt which resulted in 1963, in the form of a national campaign to enhance the production of feed products in the Pakistan. Under this campaign the government announced a tax exemption policy on the income derived from poultry farming. Pakistan International Airlines (PIA) in collaboration with Shaver Poultry Breeding Farms of Canada started first commercial hatchery in Karachi. Simultaneously, a commercial poultry feed mill was started by Lever Brothers (Pvt), Pakistan Ltd., at Rahim Yar Khan, which was followed by other pioneers like Arbor Acres Ltd. Likewise Pakistan, Azad Jammu Kashmir is also basically an agricultural state and livestock is sub sector, which is vital for all agricultural sectors as its contribution is around 54 % in agricultural value added and 49 % in GDP. Milk, Meat, Hides, Skins and leather are the major products of livestock. Total population of AJK is 32, (P and D Deptt. 2002). Currently there are 741 commercial poultry farms (Broiler) and out of these 309 lies in Mirpur District (Govt. of AJK). Total production of poultry birds (broiler) in Mirpur district was million in (Deptt. of Poultry Development) and it could not fulfill the requirements of even Mirpur. Our food at present is primarily based on cereals and our diet is deficient both in calories and proteins. According to National Science Council of Pakistan (2001); AJK like other developing countries is also facing protein shortage gap. It was reported that average availability of protein is about 40 grams/capita per day against the required dose i.e. 70 grams/capita per day in AJK. Only poultry and egg production offers the best prospects for supply of quickest and cheapest source of protein. It was envisaged to increase the production of poultry through producing more broiler and layers. Poultry provides protein, niacin, vitamins B6 and B12, iron, zinc, phosphorus, Fat, saturated fat, and cholesterol. Choosing a diet low in fat, saturated fat, and cholesterol help to reduce the risk of getting certain diseases and help maintain a healthy weight. The Dietary Guidelines for Americans suggest choosing a diet containing 30 percent or less of calories from fat and less than 10 percent of calories from saturated fatty acids. The establishment of a commercial poultry farm requires a large capital investment for land, buildings, cages, feed handling and storage equipment. Feed, labor, veterinary and medication costs, and the cost of the day old chick will be the major expenses once an operation begins up to its Technology Transfer Institute, Muzaffarabad, Azad Jammu Kashmir Pakistan.

2 Tahir Zahoor Cholan. Marketing margins of broiler in AJK. 158 production. Meat producing birds are marketed before they reach sexual maturity. Broiler is the term given to birds marketed when they are 6 weeks of age or weigh approximately 2 kilograms. This is the most popular production program In AJK, Poultry has still remained neglected and unimportant sideline of agricultural industry. Productivity of local birds term of egg and meat (return) was very low that would not consider as a paying enterprise. However the poultry raisers cry for low economic return for their poultry products and consumers in streets crying for high cost of poultry products that is mainly due to high marketing margins of intermediaries in this industry. The producer did not rewarded by proper returns on his investment. In all stages of development there is a need to enhance the production efficiency and lowering the cost of distribution in existing marketing system. For the achievement of this goal the important steps are needed, such as orderly and least expensive marketing. Thus it is necessary to enable the producer to sell their produce at reasonable prices and consumer to buy their needs at minimum cost. Currently there is no pronounced marketing structure for poultry in entire AJK. Poultry Product reached to retailer through collector and consumer purchased from retailer. To pin point this extend to which the existing marketing system of poultry will efficiently perform various functions needed a detailed study. The existing poultry marketing system has been functioning without much attention by planners and policy makers. To achieve this goal, the important changes in the existing marketing systems are needed. The present study was planned to conduct detailed investigation into the poultry (broiler) marketing channels prevalent in the present setup with a view to see their efficiency and margins. Therefore, this study is designed to (i) Overview the existing Production and marketing system of poultry (broiler) in AJK (ii) Estimate the Cost and Margins of different market intermediaries (iii) Identify the marketing problems faced by the poultry producers and other market intermediaries (iv) Suggest the remedial measures to improve the existing marketing system in AJK. MATERIALS AND METHODS Data Collection and Sampling Techniques This study is based on primary data from poultry farmers. Mirpur district is selected for study because it is considered as main poultry-producing region in AJK. Sample survey was carried out followed group discussion and key informant interviews. The aim of this study is to assess the existing production and marketing system of poultry in AJK. However, in an empirical investigation it is impossible to collect information from the whole population. Therefore, researchers need to make inferences based on information derived from a representative sample of the population. The size of the sample, and amount of variation, usually affect the quantity and quality of information obtained from the survey. Using appropriate sampling methods, both factors can be controlled (Scheaffer, 1979). The aim is to devise a sampling scheme, which is economical and easy to operate, and provides unbiased estimates with small variance (Barnett, 1991). The selection of a sample from the population is commonly used in economics, marketing and other disciplines because of limitations of covering the whole population. Sampling Frame and Sampling Size The frame must define and present every sampling unit and give it a weight in the population, registered voters, farm holdings or maps of rural areas, town plans or a list of towns, villages and administrative areas (Kinnear and Taylor, 1987). The sampling frame for poultry producers consists of a list that defines the allocation of poultry farms, villages and their vicinity; name of poultry producers and size of poultry farm was prepared during the informal survey. This list was utilized to determine the sample size. An attempt has been made to review the sample size of similar research studies at the regional and national level. It was found that most researchers selected samples size between 100 and 150 to achieve the stated objectives and to minimize the survey time and cost of the study. Given limitations of time, finance, data management, and traveling a decision were taken to interview 60 poultry farmers, 10 Collection agents, 10 Retailers and 100 Consumers. The sample size was considered adequate in terms of depth and accuracy required

3 Sarhad J. Agric. Vol. 23, No. 1, and in terms of the time and resources available for the research study. Analytical Framework Market Margin Analysis Marketing margin analysis is the differences between prices at two market levels. Marketing margins are commonly used to examine the differences between producers and consumer prices for the same quantity of a commodity. Margins also represent the price charged by marketing agencies for all services provided including buying, packing, transportation, storage and processing. Under competitive market conditions the market margins are the result of demand for marketing services and are equal to the minimum cost of services provided plus normal profit (Scarborough and Kydd, 1992). Marketing margins have been examined on the basis of data obtained on prices at different stages of the marketing chain. Marketing margins have been calculated through computing the absolute margin or price spread, which is essentially the same as the difference between the prices, paid and received by each specific marketing agency. The following formula was used to compute percentage-marketing margins as earned by each market intermediary in the marketing of broiler products. Mm = (Ps x 100) / Sp Where, Mm indicates the marketing margin earned by a specific agency, Ps stands for price spread availed by that agency while Sp represents sale price of the same agency for the same commodity. Price spread (Ps) can be calculated as Ps = Sale Price of the commodity - Purchase Price of the commodity Absolute Margin Absolute margin is the difference between sale prices of two or more than two agencies for equivalent quantity of a specific commodity. Farm retail price spread or absolute margin refers to the difference between the retail price and the price received by the farmers for an equivalent quantity of farm products. Breakdown of Consumer s Rupee Breakdown of consumer s rupee is a phrase applied to the manner in which a consumer s one rupee expenditure on a particular commodity is divided among the producer and marketing agencies. It shows that portion of a consumer s rupee, which goes to the producer and which is earned by various marketing agencies such as collection agent and retailers. This was calculated by expressing the net margin of a specific agency as proportion of the retail price. The following formula was used to determine the breakdown of consumer s rupee. Bdcr = Ps / Rp Where Bdcr stands for break down of consumers rupee spent on specific commodity, Ps indicates price spread and Rp represents retail price. Marketing Costs The marketing margin indicates the amount received by the different marketing agencies for providing their s ervices. The next stage of the analysis is to determine whether these Margins are realistic in relation to their services provided. Therefore, it is essential to calculate the costs of these agencies. Marketing costs are the expenditure incurred by various market intermediaries from the time when commodity leaves the farm until it reaches the consumers. Such marketing costs indicate the actual expenses of a marketing agency including fixed and variable costs. These costs were incurred by the producers and other marketing intermediaries and have impact on prices as well as on the margins of the market intermediaries. The major cost components include loading, unloading, transportation and labor charges. These costs were computed on per kg basis. Each marketing agency was inquired about the amount it spent per kg and the cost of each agency was calculated by using the following formula. MC = As/Qh Where MC stands for marketing cost of a specific unit quantity, As for actual amount spent and Qh represents quantity handled. All marketing costs were calculated in this way.

4 Tahir Zahoor Cholan. Marketing margins of broiler in AJK. 160 Net Margin The net margin of a specific agency is the net earnings, which it earns after paying all marketing costs. Net earnings of various market agencies involved in the marketing of poultry were computed with the following formula. Nm = Ps - MC Where Nm stands for net margin, Ps indicates the price spread availed by the specific agency and MC represents marketing costs incurred by the same agency. RESULTS AND DISCUSSION Socioeconomic Characteristics of Poultry Farmers The main objective of this section is to describe the demographic and socioeconomic characteristics of poultry producers. Education Level Information about education of selected poultry farmers is analyzed and it was found that 20 percent respondents were illiterate and same percentage had primary and middle education (20% each), followed by maximum respondents having matriculate education i.e. 33 percent, and 5 percent respondents from selected poultry farmers were graduate, while 2 percent respondents having master degrees. Poultry Farming Experience The information regarding the poultry farming experience of selected farmers was analyzed. Poultry producers were divided into three groups according to their experience. First group denoted the farmers had experience up to 10 years and majority (80%) of the respondents were counted in this group; 2 nd group carried the poultry farmers having experience of years and 18% respondents belong to this group. Only 2 percent respondents were counted in 3 rd group that contained the farmers who had more than 21year experience in poultry farming. Scale of Poultry Business It is important to examine how resources are managed, and its impact on productivity and sustainability. Poultry producers were divided into three groups; 1. Up to 2000 birds; birds and 3 rd group ranged from 4001 to 6000 birds. The results indicated that majority (83%) of the respondent farmers reared the poultry birds on small scale i.e. up to 2000 birds. It is due to involvement of capital in this business; another reason for small farming is the hazard of loss due to risky enterprise. It is also estimated that poultry farming of 10 percent respondents was ranged from 2001 to 4000 birds while a small number of respondents (7%) reared poultry birds on large scale i.e. up to 6000 birds (Table I). In most of the countries even in Pakistan peoples adopted poultry farming as a business or as a primary source of their income and some people joined it as a part time activity, just for additional income. Data showed that in sampled area, majority (80%) farmers adopted poultry farming as a profession and it was their primary source of income. Twenty (20) percent adopted it as secondary source of income. Table I Scale of Poultry Farming and Involvement in this Business Category Number Percent Farm Size 2001 to 4000 birds 6 10 Up to 2000 birds to 6000 birds 4 7 Total Involvement in Farming Full Time Part Time Total

5 Sarhad J. Agric. Vol. 23, No. 1, Poultry Shed Rent System Poultry business requires handsome resources. Sheds for Poultry birds are different in size that depends upon the number of birds. Heavy investment requires for the construction of poultry sheds. Most of the poultry farmers did not invest their money in construction of sheds; they have hired the poultry sheds. Results indicated that only 23 percent respondent farmers had their own poultry sheds while majority (74%) hired the sheds and 3 percent shared their profit with the owner of sheds. It was also found that majority of the poultry farmers rented in the sheds due to lack of financial resources Access to Credit Access to credit is an important instrument enables farmers to acquire command over the use of working capital and proper inputs for a better yield. Credit is considered as a key element in modernization of all sectors of agriculture including livestock and poultry. It is commonly believed that credit availability for small farmers is one of the main indicators of rural development. But in case of poultry farming, it was found that only 2 percent poultry farmers availed the institutional credit in sampled area. They borrowed the loan from Zari Tariqiati Bank Limited (ZTBL) (Table II). It was found that most of the farmers took the poultry feed from feed dealers on credit. Data indicated that 90 percent respondent farmers purchased the feed on credit from the feed dealers. Majority of the respondents (72%) took the feed on credit due to lack of finance while remaining 28 percent viewed that it was the routine of poultry farming system. Table II Status of institutional credit and purchase of inputs Status Number Percent Borrowed the Credit 1 2 Status of Access to Institutional Credit Did not Borrowed the Credit Total Purchased on Credit Status of Purchased of Poultry Feed Purchased on Cash 6 10 Total Reasons for purchase of Poultry Feed on Credit Routine of the Area Lack of Finance Total Production It was investigated that the poultry production varies from farm to farm; it depends upon the number of birds at that farm, rate of mortality in that flock, quality of feed and ratio of pure breed supplied. In sampled area it was estimated that total production of a standard poultry farm having 1000 birds with the mortality rate of 5% was 42\mds (1662 kg) approximately. Agarwal, (1991) estimated the live weight of a bird as 1750 grams, as an average. Price A lot of price variation was recorded in poultry market as well as in case of day old chick. The price of day old chick ranged from Rs.11/- to

6 Tahir Zahoor Cholan. Marketing margins of broiler in AJK. 162 Rs.22/-, the price of day old chick was higher in winter season and lower in summer season. It is due to so many factors, the main reason was found that in winter season farming is at it s peak and due to increase in demand of day old chick, the prices are also raised. In summer season, due to harsh climatic conditions poultry farming became decline. Due to decrease in demand of day old chick the prices become lower. Like wise the prices of poultry was also varied from time to time and season to season. But there is no thumb rule for poultry prices. It was investigated that the sale prices of producer were ranged from Rs to Rs.54 kg -1 in summer season and Rs to Rs.57 kg -1 in winter season (Table. III). So the average sale price in summer is Rs.46 kg -1 and in winter it was Rs.48 kg -1 (live weight). Table III Average Sale Prices of Poultry in the Study area Season Minimum Price Maximum Price Mean Summer Season Winter Season Marketing of Poultry The improvement in the functioning of commodity markets as well as the improved performance of the marketing system is now generally recognized as important, strategic elements in agricultural and economic development. Changes of attitude to marketing have come about particularly during the last decade, when many developing countries have had to undergo stringent economic reforms (Smith, 1992). In most developing countries, government policies and program directed at agricultural marketing have been based more on preconceived ideas about the nature of the existing marketing system than on accurate information and economic analysis. Existing Marketing System In AJK, government fixes the prices of major agricultural commodities like cotton, wheat, rice, sugarcane, pulses and oil seed crops. Other agricultural commodities like fruits and vegetables have always been completely in the hands of the private sector with no restriction on their movement, and with prices being determined through supply and demand. However, the poultry marketing system is not efficient due to the involvements of middlemen and their high profit. In case of poultry, poultry producer has no role in marketing of his produce. Collection Agents collected the birds from poultry farms and supplied to the retailers. They have contacts with retailers in all retail markets and they supplied them according to their need, which they recorded them in advance. Collection agents keep the margin of Rs.2\kg -1 (live weight). There is no poultry market in AJK so sale prices of Wazirabad and Jehlum markets were prevailed there. Prevailing marketing channels are described as; Producer A large number of producers; geographically dispersed at various locations in Mirpur district of AJK, carried out poultry farming. Poultry producers, in general, belonged to farming families and their farm sheds could be either rented or owned and it was investigated that majority (73%) poultry farmers hired the poultry sheds. Due to unavailability of poultry market in AJK, poultry producer have no control on marketing of his produce. They depend upon the collection agent for the marketing of their produce. At farm level mortality rate of poultry birds affected the income of producer adversely. Loss due to mortality differs from farm to farm due to so many reasons It was investigated that average rate of mortality was 5%. It was also calculated that the average cost of production of poultry was Rs.41\Kg of live weight. Collection Agent The collection agent performs a key role in the marketing of poultry. It can be described as merchant middleman who buys the birds from poultry producer and supplies it to retailers in the market. The collector is a local man who belongs to the business community having its own

7 Sarhad J. Agric. Vol. 23, No. 1, transport (truck, wagon) and possessed enough knowledge about the market conditions. He collected the poultry birds on credit from the producer and supplied to the retailer on credit basis; after a day he collected the money from retailer and paid to the producer. He did not invest much money except transport; some time he provided day old chicks to some farmers as credit on the terms that the producer will sold his chicken through him. He earned margin of Rs.2.00 per kg of live weight. It was also calculated that majority of the respondents were educated and maximum (35%) collectors having intermediate qualifications and it was also investigated that none of collection agent borrowed loan from any institution. It was also estimated that a collection agent daily transacted 49\mds (as an average). Retailer All market activities come to an end with the retailers. They buy and sell small quantities according to the demand of consumers. A large number of poultry retailers working in entire AJK. Majority of them working at roadsides without any shop, they have cages made of iron and they kept the birds in those cages. Retailers purchase that much quantity, which they could sell in a day. Retailer purchased poultry from collection agent on credit, which is not more than two days. He enjoyed the highest marketing margin i.e. Rs.10 kg -1 of live weight. The average sale of a retailer was estimated as 35 kgs -1 day. It was also investigated that only 10 percent respondent retailers kept a person for their assistance on daily wage basis and they paid him Rs.50 day -1. Retailers do not face any problem in disposal of poultry wastes. It was investigated that 50% respondent retailers sale it out and 50% disposed it out without charges to get rid off that waste. It was observed that feed mills paid some amount of money to some retailers that ranged from Rs.2000/- to Rs.8000 annum -1, which depends upon the volume of business of retailer. Consumer Consumers of the poultry are generally belonged to household category. Additionally bakers, restaurants and barbeque stall are also counted in buyer s list. Majority of the buyers purchased poultry from retailer but some big hotels and restaurants purchase directly from poultry farm. The consumption level and pattern in Mirpur district is entirely differently form other districts of AJK. It is due to income disparity among peoples of Mirpur and other areas of AJK. The majority of the citizens of Mirpur district went to European countries and it was observed that one or two family members of about 60% families are out of country. The average consumption of respondent consumers was 5 kg month -1. It was estimated that 100 percent respondent liked to purchase live weight instead of chicken meat. The reasons were identified as 50% respondents viewed that quality of chicken meat was being doubtful so they preferred to slaughter the chicken in their presence. While 30% argued that live chicken became cheaper as compared to chicken meat and remaining 20% said that it was the trend of locality to purchase live chicken and than slaughter. Marketing Margin Analysis In order to measure marketing margins, data on poultry prices were obtained at different stages in the marketing chain. Marketing margins depend on the length of the marketing chain and the extent to which the produce is marketed (Asif Maqbool 2001). Marketing margins can be computed in two ways: (a) absolute cash margins; and (b) percentage margins. The absolute cash margin is a good indicator of the trend of marketing costs (Thomas & Brennan, 1975). Both types of margin have been calculated to compare margins in absolute and proportionate terms in this section. It was investigated that marketing chain is not so longer, only two intermediaries involved in poultry marketing in AJK i.e. collection agent and retailer. Poultry Prices In the analysis of poultry prices it is difficult to compare the prices in different seasons. There are some complications in formulating the standard price of poultry and the main problem is day-today variation in prices and price variation over the season. Such problems have been resolved by collecting prices, which may cover most of the above conditions. The price of poultry was collected on per kg basis. Information on the retail price of poultry was collected from the retailers of Mirpur. Simple analysis of means poultry prices

8 Tahir Zahoor Cholan. Marketing margins of broiler in AJK. 164 on per kg basis. It is obvious from results that producer faced so many financial problems due to price fluctuation and some time he faced heavy losses. It was clear from data that collection agent paid Rs.47 kg -1 to producer and his sale price was Rs.49 while sale price of retailer was Rs.59 kg -1 and it can be concluded that all marketing agencies except producer received highest prices (Table IV). Table IV Poultry sale price at different market intermediaries (Rs kg -1 ) Market Agencies Minimum Price Maximum Price Mean Producer Collection Agent Retailer Absolute Cash Margin The absolute cash margin of producers was calculated as the sale price of the poultry birds per kg paid by the collection agent. The absolute cash margin of collection agent & retailer is the sale price of Poultry in the market less the purchase price. Table V shows that retailer receive Rs.10 kg -1 that was the highest margin and it was also investigated that they bear very nominal marketing and handling cost and faced minor risks among other market agencies. Collection agent kept the margin of Rs.2 kg -1 and it was also calculated that he also faced nominal marketing cost. Table V Absolute Cash Margin of Producer and Other Market Intermediaries Market Agencies Av. Absolute Margin Producer 47 Collection Agent 2 Retailer 10 Retail Price 59 Share in Consumer s Rupee The consumer s one rupee expenditure on a particular commodity is divided between the producer and other marketing agencies. The indicator shows that portion of a consumer s rupee which goes to the producer and that earned by the various marketing agencies. The producer s share in consumer s rupee (on final retail price) was calculated on a per kilogram basis. Results indicated that retailer got 17% share in consumer s rupee while collection agent got only 4% (Table VI). Table VI Percent share in consumer s rupee of poultry market intermediaries Market Agencies Share (%) Producer 79 Collection Agent 4 Retailer 17 Consumer s rupee 100

9 Sarhad J. Agric. Vol. 23, No. 1, Marketing Costs The production costs of poultry producers were estimated to be Rs.41 per kg which includes price of day old chick, costs of feed, wood for heating, electricity, wage of employee, lime, liter and vaccination. The cost of collection agent was estimated as Rs.0.45 per kg. It included the costs of transportation wage of employee (driver and helper) and telephone charges. It was also calculated that marketing cost incurred by retailer was Rs.1.15 kg -1 (Table VII). The marketing cost of retailer included the rent of shop, wage of labor (if any), electricity bill and cost of shopper bags. It was obvious from data that the costs incurred by the retailer were higher than collection agent but at the same time he enjoyed maximum margin than collection agent. Table VII Cost Incurred by Poultry Producer and Other Market Agencies (Rs Kg -1 ) Market Agencies Cost Producer 41 Collection Agent 0.45 Retailer 1.15 Net and Percentage Margin The net margin of a specific agency is the net earning, which it gains after paying all marketing costs. The net margin of the poultry producers was calculated on per kg basis as the sale price of the poultry birds less production costs of poultry producers. The net margins of collection agent and retailer were calculated as sale price of poultry in the market minus purchase price and other marketing costs. A further indicator calculated, is the percentage margin defined for each intermediary as the net margin divided by the absolute cash margin expressed as a percentage margin. The absolute cash margin has already been calculated by subtracting the price paid by a specific agency from the price received by the same agency. The estimated percentage margins of each marketing intermediary are presented in the following table. Table VIII Net Margins & %Age Margin of poultry producer and market intermediaries (Rs Kg -1 ) Market Agencies Net Margin % Age Margin Producer 6 15 Retailer Collection Agent Table VIII shows that the highest percentage margin i.e. 89% was received by retailers followed by 78% by the collection agent in AJK; on the management and own capital invested by the intermediary, makes up a relatively large portion of the marketing margin compared to the other direct costs incurred. The results also show that the poultry producer secured the least percentage margin on its investment and devotion. Consideration of evidence from other sources presented later in this report is needed to fully interpret these figures, but it appears that given the size of their investment in the business and risks borne, the proportion of the margin received as profit by retailers and collection agent is attractive compared to producer who invested large amount of capital in the poultry business and faced great risk. To examine the above indicators in a broad perspective, other studies on a regional, national and international level for poultry were reviewed. (Shouq, 2002) studied the poultry marketing in Faisalabad district of Punjab and estimated the producer, collection agent and retailer share as 37, 63 and 74% respectively. Chohan (1992) also

10 Tahir Zahoor Cholan. Marketing margins of broiler in AJK. 166 studied the marketing system of poultry and poultry products in Jhang and furnished the same conclusion that producers receive the lowest share of the consumer s rupee. CONCLUSION AND RECOMMENDATIONS The ultimate objective of the present study is to examine the existing marketing system of poultry in AJK, which has been carried out on the basis of primary data collected from poultry producers and market intermediaries of Mirpur districts. Foregoing results indicated that there were plenty of poultry farms in target area but majority of the farms were not in working condition due to very low margins or even losses in this business. There was no commercial hatchery and feed mill in entire AJK. Majority of the respondents were well experienced in poultry farming and they furnished with knowledge of new and improved technologies introduced in poultry farming. It was also evaluated that majority of poultry farmers belong to small group ( birds). Majority of the producer purchased poultry feed and poultry medicines from feed dealers on credit, It was mainly due to lack of finance but it was observed that it was also a routine of that area. It was also investigated that most of the collection agent provide the day old chick to poultry producers on credit on the terms that they will sell out their produce through him. The prices of day old chick were ranged from Rs bird -1 that affected the cost of production of poultry adversely. It was clear from data that the market prices of Jehlum and Wazirabad were prevailed in AJK due to non-availability of poultry market in entire AJK. Collection agent collected the poultry birds from the farm and supplied to the retailers without involving any wholesaler and he made payments to retailer after the collection of payment from retailer. The dealers of Jehlum and Wazirabad fixed the prices of poultry on daily basis without the consultation of poultry producers who were the main stakeholders in this business. Price fixation on daily basis created a great problem for poultry producers. It was calculated that the average sale price of poultry birds was Rs.59 kg -1 (live weight) in focused area. The average mortality rate of poultry in sampled was recorded as very high. The cost of production of poultry producer was too high and it only due to high rates of day old chick and cost incurred on inputs (feed, wooed, electricity and vaccination). It was observed that retailer got maximum net margin. So it was much clear from data that the poultry producer who invested his money and also devoted his time and services, he secured only Rs.6 kg -1 while the investment of retailer was very nominal but he secured Rs.8.85 kg -1 This situation disappointed the poultry producers. Farmers expressed their views that department did not technically guide them. In case of any disease problem, they were on the disposal of veterinary medicine dealers and they often provided them irrelevant and date expired poultry vaccines, which sometimes caused heavy losses instead of benefit. It was the common complaint by the consumers that retailers tried to sell diseased birds that they purchased at cheaper cost. Consumers were also suffered by day-to-day price variation of chicken. It was obvious that poultry farming in AJK has a great potential, but due to some major problems there were some hurdles in that industry. So it is recommended that; Govt. of AJK should establish some commercial hatcheries in AJK. The establishment of hatchery will ensure the availability of day old chick ensured on cheaper prices that leads to decrease the cost of production of poultry farmers. A poultry feed mill was also recommended in sampled area and in this regard private sector could take initiative and poultry department should motivate private entrepreneurs to invest in this field. Proper poultry market was required in AJK especially in Mirpur district, which is more poultry growing area. By the establishment of market producers could fix the sale price of their produce according to the cost of production. Shortage of finance was also a barrier in promotion of poultry industry in AJK. So it is recommended that poultry producers of AJK will be facilitated by institutional credit by ZBTL or some other institution on low interest rates. Proper vaccination to poultry birds play a vital role in promotion of poultry industry,

11 Sarhad J. Agric. Vol. 23, No. 1, so it is recommended that poultry department may ensure the availability of proper poultry medicines in remote areas also, especially in those areas where poultry farms were in copious. It is also suggested that poultry department may provide training to poultry farmers about vaccination and also provide vaccines to the poultry farmers freely or on nominal charges if possible. In short poultry department may provide full technical guidance to the farmers. Properly equipped laboratories may also be needed at district level through farmers could found proper & time diagnoses of their problem. REFERENCES Agarwal,VK.1991, Cost and profit analysis of poultry farming, production and marketing of poultry products in India. Text Book published in Bombay Press, India. 147 p. Barnett,V.1991, sample survey principles and methods. London, Edward Arnold Publisher Ltd. England, UK. Casely, D. and K. Kunnar the collection, analysis and use of monitoring and evaluation data Baltimore. The Hohnces Hopkins Univ. Press Deptt. of Agric. Econ. and Business Mgt., Wye College. Chohan Marketing of poultry and poultry products in Jhang Tehsil, M.Sc. Thesis, Faculty of Agric. Econ. Univ. of Agric. Faisalabad. Govt. of AJK Report of Poultry Deptt. of Azad Jammu & Kashmir on Poultry Production in AJK. 28 p. Govt. of AJK Report of Planning & Dev. Deptt. AJK. 34 p. Govt. of Pakistan Report of National Science Council Pakistan. 73 p. Kinnear, J. and J. Tayler Marketing research: An Applied Approach. Mc Graw Hill Book Co. Singapore. Maqbool, A Marketing system of poultry in Faisalabad, M. Sc. Thesis; Univ. of Agric, Faisalabad. Scarborough, V. and J. Kiddy Economic analysis of agricultural marketing: A manual. Chatham, Natural Resources Instt. UK. 142 p. Scheaffer Elementary Survey Sampling. Massachusetts, Duxbury Press USA. Shouq, K.M Report on Poultry Prod. Faculty of Anim. Husb. Univ. of Agric. Faisalabad. Smith, L.E.D Costs, margins and returns in agricultural marketing. Marketing and Agribusiness Dev. Paper No. 1, Deptt. of Political Economy Univ. of Glasgow, UK. Thomas, H.J. and M.J. Brennan Economics, South Western Publish Co. Cincinnati, Ohio, USA. pp Govt. of AJK Report of P&D Deptt. of Azad Jammu & Kashmir on Population Census: 49 p.

12 Tahir Zahoor Cholan. Marketing margins of broiler in AJK. 168