Bahrain's poultry farmers are fearing for their future in the wake of planned subsidy cuts, due to come into effect later this year.

They held a crisis meeting yesterday (July 27) in a bid to devise a strategy for keeping prices competitive and the farms profitable, said a report in the Gulf Daily News (GDN), our sister publication.

It follows concerns that cheaper Saudi chicken will drive locally-reared poultry out of the market and Bahraini farmers will be unable to 
compete.

Industry spokesman Jameel Salman, owner of Bahrain’s biggest poultry farm Al Safa, said the Saudi government provides their farmers “with free land and subsidies on almost everything”.

“Bahrain already imports about 80 per cent of its chicken, but with the subsidy cuts I expect that imports will reach 90 per cent – and it will all come from Saudi Arabia,” he said.

“If the price of fresh Bahraini chicken rises then the demand for cheaper chicken will be met by Saudi Arabia because it is the best logistical choice.

“There is no way we can compete with them.

“I expect several farms in the country to close and our reliance on imports to increase.”

Another knock-on effect of subsidy cuts will be huge job losses among Bahrainis, Salman claimed.

“To be eligible for subsidies Delmon Poultry had to employ mostly Bahrainis and there were rules for the farmers too,” he said.

“If there are no subsidies then to remain profitable most of the Bahraini staff will be replaced with cheaper foreign workers.”

Compounding the problem is a Bahrain-only regulation relating to chicken vaccinations, which Salman described as “unnecessary” and costly.

“All the fertilised eggs Bahrain receives come from Brazil with the guarantee that they are free of flu – yet regulations say that all chicks have to be vaccinated at one day old and again at 36 day old,” he said.   

“These repeated vaccinations lead to overdoses – but if we in the farming community doesn’t abide by them then they are denied access to the imported eggs.

“The mortality rate among chicks in most of the farms in the country has reached almost 15 per cent, which is a massive loss.

“On average farmers pay between BD2,000 ($5,267) and BD7,000 for each batch of eggs once every two months – so we are losing chickens, paying more money and on top of that if the subsidies are scrapped our chickens become more expensive.

“No other country in the GCC is forced to vaccinate their chickens in this way, so we are planning on approaching the Agriculture Directorate to propose that the regulation be lifted.

“It won’t be enough to remain competitive against the Saudi market, but it will help.”

Meat subsidies were initially set to be scrapped on August 1, as part of a raft of cost-cutting measures announced by the government earlier this year.

As a replacement, Bahrainis were to be given a monthly “food allowance” that would be transferred directly into their bank accounts.

However, earlier this month His Royal Highness Prime Minister Prince Khalifa bin Salman Al Khalifa ordered that the move be postponed until September 1 for further study.

The plan to scrap meat subsidies is part of the government’s efforts to limit public spending – driven in large part by the plummeting price of oil, which has almost halved since last summer.

More than 80 per cent of Bahrain’s revenues come from oil.

As a result the country’s debt ceiling was raised from BD5 billion to BD7 billion last November so that the government could borrow further.

However, reducing subsidies – which cost the government BD935 million in total last year – is seen as a key way to make national savings. - TradeArabia News Service