Poultry Farming in Pakistan: Challenges & Opportunities

Poultry is a cornerstone of Pakistan’s agricultural economy and an essential weapon in the fight against malnutrition. As the country’s most affordable and accessible source of animal protein, poultry provides a critical dietary buffer in a context where 38 percent of children under five suffer from stunting caused by chronic malnutrition (NNS, 2018). Eggs and chicken meat supply not just protein but also vital micronutrients that directly influence growth, immunity, and cognitive development. In a nation struggling to meet its nutritional needs, the sector carries both economic and public health significance.

Despite its enormous potential, poultry farming in Pakistan faces persistent structural inefficiencies that prevent it from reaching full capacity. Small and medium producers, who form the backbone of the industry, often work under volatile conditions with thin margins. Rising feed costs, disease outbreaks, and limited access to affordable credit already strain their operations. However, the greatest obstacle is the inequitable distribution of profits across the supply chain. Middlemen and large traders capture a disproportionate share of earnings, leaving farmers with little incentive to expand or adopt improved production practices. This imbalance suppresses the sector’s growth trajectory and keeps consumer prices higher than they should be.

The present study examines the economics of poultry production with a particular focus on how profitability is distributed among stakeholders. By testing the hypothesis that intermediaries extract excessive margins at the expense of producers, it highlights a critical barrier to both industry growth and nutritional security. Unlocking the sector’s potential requires rethinking pricing mechanisms, strengthening producer cooperatives, and improving direct market access. A fairer system would not only enhance farm-level profitability but also reduce costs for consumers, positioning poultry as a sustainable driver of food security and rural livelihoods in Pakistan.

The Critical Role of Poultry in Pakistan's Food Security

Pakistan faces a widening protein gap that directly undermines national food security and public health. Average per capita protein consumption hovers around 67.3 grams per day, far below the recommended intake of over 90 grams (FAO, 2020). Poultry meat and eggs stand out as the most practical and affordable means of bridging this deficit. Today, the sector contributes more than 35 percent of the country’s total meat production (PSLM, 2021-22), making it indispensable to nutritional improvement.

The poultry industry has undergone a remarkable transformation over the past few decades. Once limited to household backyards, it has grown into a highly organized and capital-intensive sector. Current estimates place total investment above PKR 1.5 trillion, with over 1.5 million people directly or indirectly employed (PEPA, 2023). Despite these impressive figures, the benefits of this growth remain unevenly distributed. Producers, the foundation of the industry, receive a disproportionately small share of profits compared to intermediaries, weakening incentives to expand production.

Profit distribution patterns reveal a stark imbalance. Commission agents, positioned as essential gatekeepers between farmers and markets, capture 47 percent of the total profit. Their dominance allows them to set prices that favor their own margins at the expense of producers. Retailers take an additional 28 percent, justified partly by operational costs but inflated by limited local competition. In contrast, producers, who face the highest production risks from disease outbreaks, feeding price volatility, and fluctuating demand, receive just 25 percent of total profits. This imbalance has deepened over time. Earlier research by Qazi (1989) suggested that intermediaries together controlled around 61 percent of profits. Today their share has grown, reflecting the increasing market power they wield against vulnerable producers.

Price volatility further compounds these challenges. Poultry prices in Pakistan are notoriously unstable, with the coefficient of variation for monthly broiler prices often exceeding 20 percent (State Bank of Pakistan, 2022). Seasonal patterns highlight the fragility of the system: prices typically peak during the hot months, when heat stress reduces bird survival and production levels, and again drop sharply in February, when post-marriage season demand subsides. For producers, such unpredictability makes planning production cycles and securing financing almost impossible. Many farmers are forced into a cycle of debt, relying on commission agents for quick cash sales, which further entrenches their dependence and erodes profitability.

The marketing system itself is riddled with constraints that perpetuate these inequities. Farmers regularly report on market manipulation, where a small number of commission agents collude to fix prices. Unethical practices, such as underweighting, under-counting, and tampered scales, are widespread. Commission charges, often between 6 and 8 percent per transaction, are levied without oversight. Most damaging is the absence of direct access to markets. Without regulated mandis, cooperative marketing systems, or structured farm-to-retailer contracts, producers remain locked out of a fair share of consumer spending.

The evidence underscores a critical reality: poultry farming in Pakistan has the potential to play a transformative role in food security, but its promise is held back by structural inequities in the value chain. Unless reforms ensure that producers are empowered to capture a greater portion of value, the sector will continue to underperform in its mission to reduce malnutrition and strengthen rural livelihoods.

Policy Recommendations for a Fair and Efficient Poultry Value Chain

The poultry sector in Pakistan holds immense promise for reducing malnutrition and meeting national food security goals. However, its ability to fulfill this role is undermined not by low production capacity, but by an exploitative and inefficient marketing system. The central issue lies in the inequitable distribution of value across the supply chain, which systematically disadvantages producers and discourages them from expanding operations. Without structural reforms, the sector will remain trapped in a cycle where farmers bear the highest risks but reap the smallest rewards. To reverse this trajectory, a multi-pronged policy approach is essential.

First, the development of alternative market institutions is critical. Government and development partners should prioritize the creation of producer cooperatives, associations, and farmer-led marketing companies. These organizations would enable collective bargaining, bulk transportation, and direct contracting with supermarkets, hotels, restaurants, and institutional buyers. By reducing the reliance on commission agents, producers would gain both bargaining power and price stability. Evidence from successful cooperative models in South Asia shows that such institutions not only improve farmer incomes but also increase consumer trust in food quality and safety.

Second, regulatory oversight must be strengthened. At present, commission agents operate with near-total impunity, exploiting loopholes in market regulation. A system of regular monitoring of weights, measures, and commission charges should be implemented at district and provincial levels. Transparent reporting mechanisms, along with penalties for malpractice, would reduce exploitative practices such as underweighting and arbitrary deductions. Such oversight would restore confidence among producers and help normalize fair market behavior.

Third, access to finance and insurance is vital to reducing farmer vulnerability. Poultry farming is highly sensitive to shocks, ranging from disease outbreaks to sudden feed price hikes. Yet farmers often lack financial cushions and must sell at unfavorable terms to cover urgent expenses. Tailored credit products, working capital loans, and affordable insurance schemes could transform this dynamic. Public–private partnerships with banks and microfinance institutions could design instruments specifically for small and medium poultry producers, enabling them to manage risk without falling prey to intermediaries.

Fourth, there is an urgent need for investment in cold chain infrastructure. Pakistan’s poultry supply chain is highly perishable, leaving farmers at the mercy of daily demand fluctuations. Public and private investment in cold storage, refrigerated transport, and processing facilities would allow farmers to store surplus, smooth supply over time, and negotiate better terms. Such infrastructure would also encourage value addition, through processed meat and egg products, which could expand both domestic and export markets.

Finally, consumer awareness and market integration should not be overlooked. Designated farmer markets in urban centers, along with digital platforms that link producers directly with consumers, can reduce supply chain layers. This would simultaneously improve producer margins and lower consumer prices. Additionally, awareness campaigns about the nutritional importance of poultry products could further stimulate demand, ensuring a steady and predictable market for producers.

In sum, the poultry sector does not require more birds in the barns, it requires a fairer system to move those birds to market. By reforming market institutions, enforcing regulations, improving access to finance, building cold chain capacity, and integrating producers more directly with consumers, Pakistan can create a more equitable and efficient poultry value chain. These measures will ensure sustainable profitability for farmers, affordability for consumers, and a stronger national response to the challenge of malnutrition.

Conclusion

Poultry farming in Pakistan sits at the crossroads of agriculture, nutrition, and rural livelihoods. It is not the lack of production capacity that limits the sector’s contribution to food security, but the inequitable distribution of profits along the value chain. Producers, who shoulder the highest risks, continue to receive the smallest share, while intermediaries extract excessive margins. This imbalance not only weakens farmer incentives but also inflates consumer prices, undermining poultry’s role as the most affordable source of protein.

The evidence makes clear that reforming the marketing and distribution system is as critical as improving productivity. Strengthening producer cooperatives, enforcing regulatory oversight, expanding financial and insurance access, investing in cold chain infrastructure, and enabling direct market integration are all essential steps. Together, these measures can shift the balance of power back toward farmers, ensuring they are rewarded fairly for their efforts.

If Pakistan is to meet its nutrition targets and reduce the burden of child malnutrition, the poultry sector must be restructured into a fairer, more efficient system. A value chain that works for farmers and consumers alike can transform poultry into a sustainable engine of food security, rural prosperity, and national health.

References: FAO; NNS; PBS; PEPA; SBP; Qazi

Please note that the views expressed in this article are of the author and do not necessarily reflect the views or policies of any organization.

The writer is affiliated with the Institute of Agricultural and Resource Economics, University of Agriculture, Faisalabad, Pakistan.

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