Tuesday, November 20, 2007

Cow and chicken

Another chapter of the poultry sector saga: 60% of the national production is at risk. There are no simple solutions, the state must decide, on the basis of rigorous research, how and what to support the sector and the consumer. I will only elect a president who will implement a pro-poor agricultural reform policy. But it will have to be a maronite.


bech said...

long time ago I wrote an article on monopolistic structures in Lebanon and one economist gave me the example of the "chicken and egg" industry in Lebanon as being completely captured by Hawa Chicken who sells the chicken to the former (outrageous number of farmers, its food etc. and then buys back the eggs, all this at discriminatory rates. He called this a monopsony.

What is your take on this ustazz?

bech said...

you want a Maronite 'pro-poor agricultural reform policy' maker? mm.. I wonder who that could be...

Rami Zurayk said...

on two, of course, Tanius Shaheen.

On one (Hawa) they are not the only buyers, but they come close to that. Their trick is contract farming, in which they sell small and medium farmers the chicks, the drugs, the feed and all other stuff, and buy the chicken back. this has been hailed as the solution to rural poverty. This is what the FAO has to say about its disadvantages: http://www.fao.org/ag/ags/AGSM/contract/cfchap1.pdf

Particularly when growing new crops, farmers face the risks of
both market failure and production problems

Inefficient management or marketing problems can mean that
quotas are manipulated so that not all contracted production is

Sponsoring companies may be unreliable or exploit a
monopoly position

The staff of sponsoring organizations may be corrupt,
particularly in the allocation of quotas

Farmers may become indebted because of production problems
and excessive advances