Asia’s poultry sector teetered on the brink of collapse some two decades ago, as bird flu ravaged farms and even posed a threat to human health. At the time, the disease had already infected poultry in Vietnam and Thailand-two of the Philippines’ neighbors in Southeast Asia.
The government scrambled to prevent its entry into the Philippines, resulting in the imposition of temporary bans on poultry shipments following confirmed reports of bird flu outbreaks in their areas. These restrictions resulted in supply disruptions and created uncertainty in the poultry trade in the region.
A crucial protein source, chicken serves as a cornerstone ingredient in various cuisines due to its adaptability. It can be pan-fried or grilled in a tangy and savory mix that Filipinos have grown to enjoy, while egg stands out on its own due to its versatility and mere affordability.
But neither the crunch of fried chicken nor the crackle of fried eggs that would complete a ‘silog’ plate would remain affordable if not for Filipino poultry raisers who have learned to adapt and remained flexible in the face of unprecedented setbacks.
‘Catastrophic’
The Philippines may have kept bird flu at bay for over a decade by implementing the necessary protocols to prevent its entry. However, the threat did not go away as Asian countries and even the country’s Southeast Asian neighbors continued to experience outbreaks, especially during the cold months.
It took the bird flu virus 14 years to reach the Philippines after it nearly crippled Asia’s poultry market in the early 2000s. The ‘ground zero’ of the outbreak of highly pathogenic avian influenza (HPAI) was in Central Luzon, considered a critical chokepoint in domestic poultry shipments. It was caused by H5N6, considered a highly contagious strain, prompting the government to order the culling of over 400,000 birds to stop the disease on its tracks.
United Broiler Raisers Association (Ubra) Chairman Elias Jose Inciong said the confirmation of bird flu jolted the domestic poultry market and stoked concerns among Filipino consumers who decided to shun chicken for fear that they would also fall ill.
This reaction trickled to broiler producers who rear chickens solely for their meat, even if these were not affected by the HPAI due to their short production cycle.
Inciong lamented the collapse in farmgate prices of broiler chickens, although the majority of the cases involved ducks, which constitute a fraction of the country’s poultry population.
‘There was a point when the farmgate price plunged to P10 per kilo. Your production cost at that time was P80 to P90 pesos,’ he told the BusinessMirror.
‘Most of the bird flu cases that time were seen in ducks, and ducks account for less than two percent of the poultry sector.’
Inciong said appetite for chicken meat returned after the government and industry stakeholders joined hands in dispelling wrong notions about bird flu.
The domestic poultry sector eventually recovered and regained most of the business it temporarily lost when the animal disease struck the Philippines.
The confirmed presence of the bird flu subtype H5N1 in 2022, however, threatened to wipe out whatever gains the country has made in terms of fighting the scourge that could cripple the industry. The Bureau of Animal Industry (BAI) noted that the avian influenza (AI) outbreak of this strain first happened in January 2022.
Considered a deadly strain for poultry, H5N1 and the COVID-19 pandemic posed a formidable threat to the local industry and reversed the progress it had made after the outbreaks in 2017.
The COVID-19 pandemic and bird flu outbreaks restricted the mobility of men and poultry shipments alike as the government scrambled to contain these diseases. Hence, farmgate prices, once again, slumped to a low of P10 per kilo.
While industry players get hit by lower farmgate prices due to seasonal factors, the two diseases proved to be catastrophic for the poultry sector.
‘It’s the inability to move during the pandemic. It was the scare in 2017,’ Inciong said.
But the broiler industry wasn’t alone in the struggle.
Egg crunch
The layer industry also took a hit during the pandemic and the bird flu outbreaks. Philippine Egg Board Association (PEBA) President Francis Uyehara said farmgate prices of eggs dipped during the initial months following the outbreaks in 2022.
‘The farmgate price of eggs dropped, maybe because of lower consumption, which was possibly due to the scare surrounding bird flu. But it didn’t last long,’ Uyehara told the BusinessMirror.
He noted that several poultry raisers affected by the disease, as well as the culling of birds to curb the spread of bird flu, slashed production, leading to a supply crunch that propelled egg prices.
‘There were farms hit by the disease, which crimped egg output. Generally, the price of table eggs rose because of tight supply brought by the bird flu outbreaks,’ Uyehara said.
The BAI noted that since the detection of the H5N1 subtype, around 200 cases were recorded nationwide in mid-August 2022. This resulted in the mortality of 182,968 heads and the culling of 1.27 million birds.
Layer farms that were spared from the bird flu outbreaks that wreaked havoc in the country also had to pay the price, according to Uyehara.
He said he had to heighten biosecurity protocols, which were ‘very laborious and very expensive.’
‘We also spent a lot on these protocols. There were lots of disinfectants, and we had to be cautious with the flow of people, clients, suppliers, and vehicles, since everyone was coming in,’ Uyehara said.
‘Even though we didn’t get bird flu, we were still affected by the strict implementation of protocols in general by the BAI.’
He noted that shipments of products, live birds for replacement, and spent hens or layer hens that reached the end of their laying cycle and are then processed for meat were therefore subject to the government’s strict protocols.
‘Many local governments also took the opportunity to charge additional fees, unnecessary passing fees. All of that is extra work and additional expense for us,’ Uyehara said.
Buoying agri output
Despite the toll of the disease on the poultry industry in recent years, it was the sole subsector that recorded sustained growth in the past six quarters.
In its latest report, the Philippine Statistics Authority (PSA) showed that while the fisheries and livestock subsectors contracted in terms of value, the crops and poultry subsectors maintained their rise enough to buoy the agriculture industry’s performance in April to June.
Poultry, which is valued at P75.07 billion, posted a 7-percent increase in the reference period. The production of chicken and chicken eggs recorded an expansion in their value of production.
Industry sources have attributed poultry’s growth to the technological advancements in the sector, such as climate-controlled facilities leveraged for weather-related shocks.
Meanwhile, the industry also recently secured a win with the approval of the country’s first commercially approved vaccine against bird flu-a move long sought after by the sector amid the alleged use of smuggled vaccine.
The Department of Agriculture (DA) announced that the Food and Drug Administration (FDA) granted a Certificate of Product Registration (CPR) to Boehringer Ingelheim’s Volvac B.E.S.T. AI plus ND.
While the vaccine provides immunity against the HPAI’s ‘most aggressive’ subtype H5N1, it also stimulates the bird’s immune system to defend against velogenic Newcastle disease (VND).
VND is the most severe form of Newcastle disease that affects a wide range of bird species, especially domestic poultry, due to its highly contagious and often fatal nature.
Potential pitfalls
The worst may be over for the poultry sector, but Ubra said developments on the domestic front could pose a threat to the industry.
For one, Inciong noted that zoning laws could push farmers out of a particular area.
‘There are places that don’t want to have poultry or even piggery around them. Eventually, you would have to get out.’
He also noted that there was a lack of provision in the Agriculture and Fisheries Modernization Act (AFMA) that could have ensured farmers’ security of tenure in a specific area.
‘The provision in AFMA that there should be a strategic agri-fisheries development zone, preferably in each province and municipality, was not implemented.’
Furthermore, Inciong raised a caveat about the potential impact of a few players solely dominating the value chain on smallholder raisers.
‘The problem in other countries was that the number of players declined, and the agricultural value chain became concentrated in a few corporations. That’s a problem since the [value chain] was dominated by a few.’
‘You are depriving a lot of small and medium-scale businesses and small retailers, distributors of livelihood. That is the main challenge in the coming years,’ Inciong said.
With this, he urged the preservation of the palengke or public market that would help smallhold farmers thrive in the coming years.
‘The wet market should be preserved because it is where small retailers can make a living, and at the same time, that’s also the market for small farmers since transactions are done on a cash basis.’