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Poultry and Income Generation

Commercial production of poultry in units located in or near cities and towns has led to a dramatic increase in poultry meat and egg production in many developing countries. This production supplies mainly urban and peri-urban populations. The large majority of units produce either meat or eggs, with specialized broiler or layer genotypes. Chickens are by far the most common species, but large commercial flocks of ducks are also common in Southeast Asia and China. Larger-scale meat or egg production units are often vertically integrated, with breeding farms for grandparent and parent birds, hatcheries, feed mills, and egg or meat processing facilities. Small-scale commercial family producers often produce similar products, but with lower efficiency and constraints to securing quality inputs – chicks and feed – and marketing products. Broilers are often supplied to live-bird markets.

In contract growing systems, production units are owned and operated by contract growers, who are typically supplied by an integrator with the chicks, feed and medication they require, and are paid according to their production and production efficiency. The grower’s contract is essentially a means of cost- and risk-sharing with the integrator. The grower benefits from economies of scale and reduced transaction costs, and also reduces the risks associated with large price fluctuations. The integrator gains the opportunity to be more flexible in adjusting the production volumes in response to changes in the season or in domestic or export demand. Contract growing provides employment and income opportunities for smaller poultry producers, but countries need to establish regulations that prevent contract growing from facilitating the introduction of negative externalities to growers, poultry workers, local communities and the general public.