PACIFIC BASIN ECONOMIC COUNCIL
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The Value Chain for Poultry Pacific Basin Economic Council Working Committee on Food Products Executive Summary: The objective of the Asia-Pacific Economic Cooperation (APEC) Food System is to ensure the long term availability of food, at affordable prices, to all consumers. The food sector can then contribute to sustainable growth and development in the region. The poultry industry is an important food sector that has become increasingly sophisticated as the level of economic development has increased. The purpose of this study is to suggest ways to improve the efficiencies of the poultry value chain and to build sustainable competitive poultry industry. The recommendations contained in this report are based on best-management practices and are identified from reviews of the poultry industry from industry participants in several economies. This study examines six of the poultry value chain’s constituent links: logistics, finance, tariff and non-tariff barriers, production and processing, food safety, feed grain distribution and poultry transportation and distribution. Recommendations are given for best management practices for each of the examined links. Tariff and non-tariff barriers issues are the main focus of APEC leaders, who announced their commitment to achieve free and open trade and investment in the Asia Pacific region by year 2020. Although this study does not analyze the domestic agricultural policies that motivate tariff and non-tariff barriers, it reveals that with the exception of Australia and Hong Kong, all PBEC economies employ one or more tariffs on poultry, poultry feedstuffs or poultry products. In addition, several economies employ various non-tariff measures to protect their markets. The year 2020 objective is for all barriers to trade to be eliminated. A variety of problems have been afflicting the world economy since the outbreak of the Asian currency crisis, causing protectionist pressures mount. This trend towards protectionism could aggravate the present world economic order. PBEC expresses its concern on any protectionism trend against the liberalization of the world economy. While the long-term objective is for barriers to be eliminated (both tariff and non-tariff), it is not recommended that governments discard their sanitary and phytosanitary requirements that are implemented to protect the general health of consumers. These sanitary standards, however, should be based on science and agreement of international experts. Adoption of science-based sanitary requirements will provide assurance to consumers and governments that food products are subject to the best monitoring systems. Additionally, borders should be legally enforceable (so that contracts and intellectual rights can be enforced) and transparent (so that customs etc., are as efficient as possible). In order to reach the "zero" tariff objective, it is important that each economy identifies its potential weaknesses and strengths in all areas of the poultry value chain. Once trade barriers are reduced, each economy can take advantage of other economies comparative strengths and strengthen its own position in areas where it identifies itself as potentially competitive. Given a timetable appropriate for each level of development, open trade benefits all economies. Less developed economies should concentrate their efforts on developing their capital markets and transportation infrastructure, which are needed for their poultry industry and their economy to grow. Also needed are standards to quantify profitability, which will allow the industry to identify its weaknesses and strengths. Economies should concentrate on better organizing their poultry industry across production and processing units, and standardizing their production at each stage of the production process. Special attention should be given to feed grain, which is the most significant cost in poultry production.