July 29, 2022
Iran could see mass closures of poultry farms in the next three months, as the government’s plan to tame food inflation with price caps mean farmers must spend more to raise chicks than they will get selling them, the newspaper Sarpoosh reported, citing local business groups.
Habib Asadollah-nejad, CEO of the National Union of Broiler Farmers told the publication the average production costs in the industry were close to 500,000 rials per kilo while the wholesale price is capped at 300,000 rials per kilo.
The Iranian poultry industry became accustomed to price caps over the past few years, taking advantage of feedstuff subsidies and state aid provided in other forms. However, the gap between the government price and production costs has widened in 2022 due to a mix of factors, including the rising price of grain on the global market, and a slump in the exchange rate of the rial.
According to Asadollah-nejad, it is not only small-scale broiler farmers that are in trouble, but large production units are also now facing economic extinction.
Mohammad Yusefi, a spokesman for the farmers’ group, said, “The Minister of Agriculture has given an ultimatum to the producers that, if they shut down farms, they will have to pay heavy fines. These warnings are irrational. If the government wants farms to keep running, it will buy chicken for 600,000 rials and sell it to people for 200,000 per kilogram.”
