Poultry, HPAI and Livelihoods in Thailand – A Review

A Collaborative Research

Project Funded by:

Implemented by:

Poultry, HPAI and Livelihoods in

Thailand – A Review

S. Burgos, J. Otte, D. Pfeiffer

R. Metras, S. Kasemsuwan, K. Chanachai

S. Heft-Neal and D. Roland-Holst

Mekong Team Working Paper No. 4

Rome, October 2008

Pro-Poor HPAI Risk Reduction

i

Table of Contents

Page

Preface.....................................................................................................................................................iii

Executive Summary ..................................................................................................................................v

Introduction............................................................................................................................................. 1

Macroeconomic Overview ...................................................................................................................... 2

Agriculture .......................................................................................................................................... 4

Livestock.............................................................................................................................................. 5

Thailand’s Poultry Industry...................................................................................................................... 7

Chicken and Duck Production Systems............................................................................................... 9

Traditional, small-scale, extensive backyard/garden poultry production...................................... 9

Semi-intensive, small-scale to medium-scale, market-oriented, commercial chicken/duck

production .................................................................................................................................... 10

Intensive, large scale, industrially-integrated chicken/duck production ..................................... 10

Geographic Distribution of Poultry Production ................................................................................ 14

Domestic Poultry Markets and International Trade ......................................................................... 16

Domestic poultry markets and marketing.................................................................................... 16

International trade ....................................................................................................................... 17

Poultry, Livelihoods and Nutrition ........................................................................................................ 21

Contribution of Poultry to Household Income ................................................................................. 21

Household Food Expenditures and Nutritional Status ..................................................................... 22

The HPAI Epidemic: Course and Institutional Response ....................................................................... 24

Course of the HPAI Epidemic ............................................................................................................ 24

Temporal pattern of H5N1 outbreaks .......................................................................................... 24

Spatial pattern of H5N1 outbreaks............................................................................................... 26

Spatio-temporal pattern of H5N1 outbreaks ............................................................................... 26

HPAI incidence by poultry flock type............................................................................................ 28

Human cases................................................................................................................................. 29

Animal Health Services and Institutional Response.......................................................................... 29

Control measures.......................................................................................................................... 30

Surveillance................................................................................................................................... 32

Impact mitigation measures......................................................................................................... 32

Economic and Social Impacts of HPAI and Control Measures .............................................................. 34

Immediate Impacts through Mortality and Public Intervention....................................................... 34

Immediate Direct Impacts through Consumer and Market Reactions............................................. 34

Domestic market reactions........................................................................................................... 34

International market reactions..................................................................................................... 34

Short-term Flow-on Impacts ............................................................................................................. 35

Medium- to Long-term Impacts and Adjustments ........................................................................... 35

Conclusions............................................................................................................................................ 37

References............................................................................................................................................. 39

Annexes ................................................................................................................................................. 41

Mekong Team Working Paper

ii

List of Tables

Table 1 Gross domestic product, GDP per capita and population, Thailand, 2000 – 2006 ....... 02

Table 2 Main trade partners for exports and imports, Thailand, 2006 ..................................... 02

Table 3 Structure of GDP for 1960s, 1980s, 2004 and 2006 ...................................................... 03

Table 4 Total labour force, people not in labour force, and average unemployment rates,

Thailand, 2000 – 2006 ...................................................................................................

03

Table 5 Evolution of hypermarkets and convenience stores, Thailand, 1998-2006 .................. 16

Table 6 Total and food expenditure by income quintiles, Thailand .......................................... 22

Table 7 HPAI incidence per 1,000 flocks by flock type and relative HPAI risks ......................... 28

Table 8 Control measures for H5N1 in Thailand since 2004 ...................................................... 31

Table 9 Number of poultry culled in Thailand, 2004-2006 ........................................................ 34

Table 10 Estimated HPAI-related losses to the poultry industry, Thailand, 2004 ....................... 35

List of Figures

Figure 1 Agricultural and non-agricultural GDP, Thailand, 1999 – 2006 .................................... 05

Figure 2 Composition of agricultural GDP, Thailand, 1999 – 2006 ............................................. 05

Figure 3 Poultry and other livestock GDP, Thailand, 1999 – 2006 ............................................. 06

Figure 4 Thailand’s chicken, duck, pig and cattle meat production, 1961 – 2007...................... 06

Figure 5 Number of flocks by type of poultry in Thailand in 2004 ............................................. 07

Figure 6 Number of birds by flock type in Thailand in 2004 ....................................................... 07

Figure 7 Layer, broiler and native chicken populations, Thailand, 2003 – 2007 ........................ 08

Figure 8 Waterfowl populations, Thailand, 2003 – 2007 ........................................................... 08

Figure 9 Quail population, Thailand, 2003 – 2007 ...................................................................... 09

Figure 10 Total broiler production by region, Thailand, 1996 – 2006 .......................................... 12

Figure 11 Schematic of vertical integration in broiler production in Thailand ............................. 13

Figure 12 Major geographic regions of Thailand .......................................................................... 14

Figure 13 Poultry populations by geographic region (2003) ........................................................ 14

Figure 14 Estimated densities of poultry in Thailand ................................................................... 15

Figure 15 Chicken product imports and exports by value, Thailand, 2003 – 2006 ....................... 17

Figure 16 Duck product imports and exports by value, Thailand, 2003 – 2006 ........................... 18

Figure 17 Export values of frozen and value-added/pre-cooked poultry, Thailand, 1998 – 2006 19

Figure 18 Quantity and value of egg exports, Thailand, 2003 – 2006 .......................................... 20

Figure 19 Average monthly total and farming incomes by socio-economic class of households,

Thailand, 2000...............................................................................................................

21

Figure 20 Annual meat consumption, Thailand, 1995 – 2006 ...................................................... 23

Figure 21 Retail prices of pork, beef, and chicken in Bangkok, 1993 – 2005 ................................ 23

Figure 22 Expenditure on poultry meat as percent of food expenditure by income quintile,

1990 to 2002 .................................................................................................................

23

Figure 23 Temporal pattern of HPAI H5N1 outbreaks in Thailand from 2004 until 2007 ............ 24

Figure 24 Comparison of temporal patterns of HPAI H5N1 outbreaks in Thailand from 2004

until 2007 for the central region and other regions .....................................................

25

Figure 25 Cumulative total of H5N1 outbreaks by district in Thailand, 2004 to 2008 ................. 26

Figure 26 Spatio-temporal pattern of H5N1 outbreaks in Thailand since 2004 ........................... 27

Figure 27 Number of outbreaks by poultry flock type during the first three epidemic waves .... 28

Figure 28 Human cases of HPAI in Thailand, 2004 – 2008 ............................................................ 29

Figure 29 Group of provinces with free-grazing duck movement restrictions in 2005 ................ 31

Figure 30 Number of H5N1 outbreaks per day, control measures and x-ray surveys

implemented by DLD in Thailand since 2004 ................................................................

33

List of Boxes

Box 1. Country Facts................................................................................................................. 04


iii

Preface

Since its re-emergence, HPAI H5N1 has attracted considerable public and media attention because

the viruses involved have been shown to be capable of producing fatal disease in humans. While

there is fear that the virus may mutate into a strain capable of sustained human-to-human

transmission, the greatest impact to date has been on the highly diverse poultry industries in

affected countries. In response to this, HPAI control measures have so far focused on implementing

prevention and eradication measures in poultry populations, with more than 175 million birds culled

in Southeast Asia alone.

Until now, significantly less emphasis has been placed on assessing the efficacy of risk reduction

measures, including their effects on the livelihoods of smallholder farmers and their families. In order

to improve local and global capacity for evidence-based decision making on the control of HPAI (and

other diseases with epidemic potential), which inevitably has major social and economic impacts, the

UK Department for International Development (DFID) has agreed to fund a collaborative, multi-

disciplinary HPAI research project for Southeast Asia and Africa.

The specific purpose of the project is to aid decision makers in developing evidence-based, pro-poor

HPAI control measures at national and international levels. These control measures should not only

be cost-effective and efficient in reducing disease risk, but also protect and enhance livelihoods,

particularly those of smallholder producers in developing countries, who are and will remain the

majority of livestock producers in these countries for some time to come.

With the above in mind, this document aims to provide a brief country economic overview; a review

of the poultry sector that examines production, trade, markets and consumption; information on

household income, food expenditures and poultry contribution to nutrition. Finally, it describes the

course of HPAI and applied control measures, with their concomitant impacts on livelihoods, the

poultry sector and the economy at large. This information should provide background information to

be used as additional evidence for policymaking processes at national and international levels.

Authors

Sigfrido Burgos and Joachim Otte work at the Food and Agriculture Organization (FAO), Dirk Pfeiffer

and Raphaelle Metras teach and conduct research at the Royal Veterinary College (RVC), Suwicha

Kasemsuwan is assistant professor at Kasetsart University in Thailand, Karoon Chanachai works at the

Thai Department of Livestock Development (DLD) and Samuel Heft-Neal is a student of David Roland-

Holst who teaches and conducts research at the University of California – Berkeley (UCB).

Disclaimer

The designations employed and the presentation of material in this information product do not imply

the expression of any opinion whatsoever on the part of the DFID, FAO, RVC, UCB, IFPRI or ILRI

concerning the legal or development status of any country, territory, city or area or of its authorities,

or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or

products of manufacturers, whether or not these have been patented, does not imply that these

have been endorsed or recommended by the above mentioned organizations in preference to others

of a similar nature that are not mentioned. The views expressed in this document are those of the

authors and do not necessarily reflect the views of DFID, FAO, RVC, UCB, IFPRI or ILRI.


iv

Acknowledgements

We acknowledge the valuable contributions of all colleagues who reviewed and made suggestions to

the manuscript, to Dr. Marius Gilbert at the Université Libre de Bruxelles, Brussels, Belgium for kindly

providing maps of poultry distributions in Thailand, and are also very grateful to DFID for funding this

project.

Keywords

Avian Flu, Chickens, Ducks, Highly Pathogenic Avian Influenza, HPAI, Livelihoods, Markets, Market

Shocks, Poultry, Poultry Production, Poverty, Smallholder Farms, Smallholders, Southeast Asia,

Thailand

More information

For more information about the project please refer to www.hpai-research.net


v

Executive Summary

The specific purpose of the DFID-funded Pro-Poor HPAI Risk Reduction Project is to promote

evidence-based, pro-poor HPAI control measures at national and international levels. With that aim

in mind, this document provides a brief economic overview of Thailand; a description of the

country’s poultry sector, and a review of the course of HPAI and applied control measures, with their

concomitant impacts on livelihoods, the poultry sector and the economy at large.

Macroeconomic Overview

The Thai economy has been transformed by active promotion of foreign investments, a proactive

export and construction sector, and by monarchy giving way to democratic rule that helped solidify

international ties and trade-based development. Thailand's economy has averaged 5.6 percent

growth per year from 2002 to 2006. Structural factors, geographical location, favourable exchange

rates and relatively low wages have boosted economic progress. Rising incomes and consumer

demand have attracted technological innovations and increased imports of non-food items. The size

of the workforce – most of which is literate – is approximately 37 million persons, with the majority

under 30 years of age. Unemployment rates stand at 2 percent. The agricultural sector accounts for

one tenth of GDP, whereas livestock accounts for 12 percent of agricultural GDP. Rice is the most

important crop and rice fields are an abundant feed resource for free-grazing waterfowl.

Thailand’s Poultry Industry

Poultry production systems in Thailand can be classified as: (I) traditional, small-scale, extensive

backyard/garden poultry production, (II) semi-intensive, small- to medium-scale, market-oriented,

commercial chicken/duck production, and (III) intensive, large scale, industrially-integrated

chicken/duck production. Indigenous backyard chickens and native waterfowl are the most

prominent flock types constituting more than 95 percent of all flocks but only about 30 percent of all

birds. The vast majority of birds, mainly broilers, are raised in commercial farms, most of which are

located in the central region. The total production of poultry meat has grown at an annual rate of 4

to 7 percent for chickens and 1 to 3 percent for ducks over two decades and Thailand had established

itself as the fifth largest exporter of poultry meat prior to the incursion of HPAI in 2004. As reaction

to the HPAI crisis the industry lobbied intensively to maintain domestic consumption, rapidly

transformed its processing facilities and adapted to export both, frozen and precooked chicken meat.

Poultry and Livelihoods

Poultry are of considerable importance to the livelihoods of smallholder and village farmers,

particularly in remote rural areas where poultry represents an important source of animal protein

and provides cash income. The average total monthly income in 2000 for all Thai households is a little

over 12,000 Baht. The proportion of total expenditures allocated to food items ranges from 34 to 38

percent for all income quintiles. Dietary consumption is 1,875 calories per capita most of which come

from carbohydrates and proteins. Broiler and pork meats are preferred by Thais. Per capita broiler

meat consumption in Thailand has grown steadily from 7.9 kg/yr in 1990 to 14.1 kg/yr in 2003. From

1993 until 2005 the retail price of chicken has remained between 40 – 60 Bath (US$ 1.20 – 1.80) per

kilogram, which is at least a quarter less than the price of one kg of pork.

The HPAI Epidemic: Course and Institutional Response

H5N1 in poultry was first reported on January 2004. Up until January 2007, a total of 1,929 outbreaks

have been officially registered. Four separate epidemic waves can be differentiated, with most

affected districts located in the centre of the country. Although backyard flocks represent the

majority of affected flocks, this appears to be mainly a reflection of their absolute abundance as the

risk of HPAI infections was found to be lower in backyard chickens, duck and geese flocks compared

to layer, broiler and particularly to quail flocks raised commercially.


vi

Control measures implemented included, but were not limited to, culling of infected flocks,

restriction of poultry movements, enhanced biosecurity and improved hygiene during production

and handling. Also, vaccination was avoided and fighting cocks required registration. Extensive

disease awareness-raising by television, newspaper, and radio took place during the peak outbreak

months. Compensation and preferential loans have been incorporated into HPAI impact mitigation

packages. Up until April 2008, 25 humans, mostly young males, contracted disease, of which 17 died.

Social and Economic Impact of HPAI and Control Measures

The most immediate impact of HPAI to livestock producers is the loss of their productive assets.

Between 2004 and 2006, almost 64 million birds were culled in an attempt to curb disease spread.

With the announcement of HPAI, consumers where reluctant to buy and consume poultry meats and

eggs due to fears of contracting disease, leading to dramatically reduced demand for poultry

products and increased demand for alternative meats. In rural areas, these effects were more

pronounced: households whose income depended on cash sales of poultry products in markets saw

reductions in their weekly incomes; traders, collectors, slaughterers and retailers were also adversely

affected. Import bans levied by Japan and the EU caused a collapse of export sales of poultry meat

and consequently a number of poultry exporters went out of business. A Thai think-tank estimates

that the total damage to the entire interrelated private poultry sector was roughly US$3 billion in

2004 alone.

Conclusions

Even for emerging economies like Thailand, agriculture will remain important because it provides

food, raw materials, income, and occupation in rural areas. Additionally, agricultures’ contribution to

economic wellbeing in Thailand is significant because it ensures food security and contributes to

exports. Thailand’s modern and dynamic poultry industry plays an important role in its economy. The

industry was hard hit by outbreaks of highly pathogenic avian influenza between 2004 and 2007,

which resulted in bans and other measures that restricted trade in poultry and poultry products.

Increased scale and integration of the poultry industry has greatly reduced the average cost of

production thereby decreasing the price of chicken meat for Thai consumers and nowadays, chicken

is the most affordable source of meat protein in Thailand. Despite the many benefits of livestock

sector progress, highly industrialized poultry production systems may and sometimes do increase the

risks of disease spread from animals to humans and environmental hazards stemming from the

disposal of large volumes of animal waste. Faced with public pressures and shifting consumers’

perceptions on food and poultry quality, the current poultry production landscape poses challenges

to newcomers that may discourage participation to supply national and international markets.

If Thai poultry businesses wish to remain competitive and profitable they will have to embrace

comprehensive poultry health programmes and food safety certification schemes, coupled with

increased collaboration with government-sponsored programmes dealing with disease surveillance,

live bird market monitoring and awareness-raising campaigns in rural and urban areas.


1

Introduction

Globalisation has brought an unwelcome problem – increased risk of transboundary

diseases. HPAI clearly illustrates that through extending livestock supply chains, local

conditions of animal production have repercussions on global human health risks.

For a vast majority of rural households in developing countries, poultry act as an important

source of protein and are part of the social fabric, a situation which will not change in the

near future. Therefore, global policies toward HPAI and its control necessarily implicate the

rural poor majority and these people need to be recognized as part of the solution to

reducing human health risk, not the problem.

It has been seen time and time again that prescriptive eradication measures fail to achieve

their direct objective and that by driving the problem ‘under ground’, disease risk actually

increases. Because of their diversity and weak institutional linkages in most of the affected

countries, national policies cannot be designed and implemented effectively without close

attention to local incentives. Despite international pressure to act quickly on control

measures, one size will not fit all or even a significant percentage of local conditions.

To ensure effective, affordable and socially fair HPAI control programmes, national and

international policy making needs to be based on stringent analysis of risks, consequences

and risk management options. This document is part of a series of documents that aim to

provide comprehensive overviews of the economic (macro- and micro-) and institutional

environment of countries that have been affected by HPAI, Thailand being one of these, to

draw out lessons that can be applied elsewhere.

The document is divided into six sections. The first section deals with Thailand’s economy,

population, labour force, agriculture and livestock sector. The second section deals with its

poultry industry, specifically chicken and duck production systems, as well as marketing and

trade. The third section is dedicated to the role of poultry in rural livelihoods, their

contribution to income and nutrition as well as consumer preferences for poultry meats. The

fourth section reviews the course of the HPAI epidemic in Thailand and the structure of the

national animal health systems and instituted control measures. The fifth section attempts

to systematically compile the available information on the direct and indirect impacts of

HPAI and HPAI control measures. Finally, the last section provides some concluding

observations.


2

Macroeconomic Overview

The Thai economy has been dramatically transformed over the past few decades. By the

1970s, the active promotion of foreign investment had already created an industrial sector

based on import substitution. In the 1980s, a proactive export and construction sector made

it a hub for international commerce. Absolute monarchy giving way to democratic rule

under a progressive constitution aided in solidifying international ties and trade-based

development. Economic policy under Mr. Thaksin Shinawatra (February 2001 – September

2006) was dominated by a self-sufficiency philosophy, and this approach ignited national

production and bolstered secondary infrastructure.

Overall economic growth has been fairly strong. Thailand's economy has recorded fairly

robust GDP growth in recent years (Table 1), averaging 5.6 percent a year between 2002 and

2006. However, there are alarming disparities in national wealth distribution, which were

amplified by fortune accumulation by elites during prosperous times. The uneven

distribution of wealth is particularly evident between urban and rural areas. Although the

export sector remains a key economic driver, domestic demand has become increasingly

important. Rising consumer demand, fuelled by growing incomes, has attracted

technological innovations and increased imports of non-food items.

Table 1. Gross domestic product, GDP per capita and population, Thailand, 2000 – 2006.

Description 2000 2002 2004 2006

GDP (billion US$) 413.0 445.8 524.8 585.9

GDP per capita (US$) 6,640 7,065 8,174 8,972

Population (million) 62.2 63.1 64.2 65.3 Source: World Bank, UNDP and CIA Factbook, 2008.

Thailand’s growing economy has attracted speculative investments. In late 2006, the central

bank introduced a new measure to tackle speculative capital flows, requiring financial

institutions to deposit 30% of foreign-currency inflows.

Exports continue to expand rapidly. The value of merchandise exports has increased sharply

over the past few years, with annual growth rates averaging 17.5 percent between 2003 and

2006. By 2006 export revenue reached nearly US$130bn, up from US$68.2bn in 2002. The

USA, China and Japan are major trade partners (Table 2).

Table 2. Main trade partners for exports and imports, Thailand, 2006.

Main Destination of Exports % of total Main Origin of Imports % of total

USA 15.0 Japan 20.4

Japan 12.7 China 10.6

China 9.0 USA 6.7

Singapore 6.4 Malaysia 6.6

Hong Kong 5.5 United Arab Emirates 5.6 Source: The Economist Intelligence Unit, 2008.

Structural factors, geographical location, favourable exchange rates and relatively low wages

are the main driving forces behind export expansions. Consequently, foreign-exchange

reserves continue to expand in Thailand, which has managed to rebuild its reserves over the


3

past decade, after the government's unsuccessful defence of the Baht in international

markets in 1997.

Table 3. Structure of GDP (percentages) for 1960s, 1980s, 2004 and 2006.

Sector 1960s 1980s 2004 2006

Agriculture 32.5 20.8 10.1 10.5

Industry 56.3 60.8 43.5 44.8

Services 11.2 18.4 46.4 44.7 Source: The Economist, 2008; World Bank, 2007; and Oxford Economics, 2006.

Agriculture’s share in GDP has shrunk from about one third in the 1960s to around one tenth

in 2006, while the relative contribution of the services sector has grown from 11.2 to nearly

45 percent (Table 3). Within services, tourism, an important contributor of foreign currency

earnings, has picked up after SARS and the 2004 tsunami. The share of industry has changed

comparatively little. Overall industry-related outputs account for almost 45 percent of GDP

and industry specialises in vehicles, electronics, electrical goods and textiles. Within the

industrial sector, manufacturing has recorded strong growth in recent years. The

construction sector was hit hard by the 1997 financial crisis, suffering four long years of

contraction. However, over the past seven years the sector has generally recovered and is

now a major source of employment.

Table 4. Total labour force, people not in labour force, and average unemployment rates,

Thailand, 2000 - 2006.

Description 2000 2002 2004 2006

Total labour force (million) 33.2 33.9 35.5 36.4

Persons not in labour force (million) 13.6 13.6 13.8 14.1

Average unemployment rate (%) 3.32 2.42 2.10 1.85 Source: Thailand’s National Statistics Office, Report of the Labour Force Survey, 2006.

Population growth has been slowing in recent decades, falling to an average of around 0.7

percent per year over 2002 - 2006, from around 1.8 percent in the early 1980s and 3 percent

per year in the 1960s. National authorities estimate that population growth rates will

continue to decline. The size of the workforce is approximately 37 million persons, with the

majority under 30 years of age. Unemployment rates have been declining and currently

stand at 2 percent (Table 4). Each year about 800,000 people join the labour force. The

literacy rate is above 90 percent; however there is a growing shortage of engineers and

skilled technical personnel.


4

Box 1. Country Facts

Official Name

Government

Capital City

Area

Population (2007 est.)

Population Density

Urban Population

Rural Population

Religion

Language (official)

Currency

Life Expectancy (m/f)

Inflation Rate (2008)

HDI (2007)

Economic Indices

GDP-2007 [PPP*]

GDP-2007 per capita

Kingdom of Thailand

Parliamentary Democracy

and Constitutional

Monarchy

Bangkok

513,115 sq km

65.5 million

128 per sq km

32%

68%

Buddhism

Thai

Thai Baht (THB)

69/75 Years

5.6%

0.781

US$519.362Bn (IMF);

US$519.439Bn (WB);

US$519.400Bn (CIA);

US$ 519.400Bn (Average)

US$7,929 (IMF);

US$7,930 (WB);

US$7,930 (CIA);

US$7,930 (Average)

Sources: The World Bank, CIA World Factbook, International Monetary Fund, World Health Organization, UNDP,

wikipedia.

* Purchasing Power Parity.

Thailand is a member of the World Trade Organization (WTO) and of the Cairns Group of

agricultural exporters.

Agriculture

Once considered the backbone of Thailand’s economy, despite strong absolute growth, the

agricultural sector is declining in terms of its relative importance to the overall economy and

currently accounts for 10 to 11 percent of GDP (Figure 1 and Table 3).

Roughly 40 percent of Thailand's labour force is employed in agriculture. The main crops

cultivated are rice, rubber, maize and cassava. Rice is the most important crop and Thailand

is the largest exporter in world rice markets. Other agricultural commodities produced in

significant amounts include fish and fishery products, tapioca, kenaf, tobacco, rubber,

bananas, sesame, coconuts, corn, peanuts, cashew nuts, soybeans, cotton, kapok, castor

beans and sugarcane. Exports of processed foods such as canned tuna, canned pineapples,

and frozen shrimp are rising.


5

Figure 1. Agricultural and non-agricultural GDP, Thailand, 1999 – 2006* (Billion Baht).

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1999 2000 2001 2002 2003 2004 2005 2006

Non Ag GDP

Ag GDP

Source: Office of the National Economic and Social Development Board, Thailand, 2006. * At market prices.

Available at http://www.nesdb.go.th/econSocial/macro/gdp_data/mainaccount.htm

Livestock

On average, between 1999 and 2006, livestock accounted for 12 percent of agricultural GDP

(Figure 2). Over the same period, within the livestock sector, the contribution of poultry has

been fluctuating between 40 and 50 percent, accounting for 4 to 6 percent of total

Agricultural GDP (Figure 3).

Figure 2. Composition of agricultural GDP, Thailand, 1999 – 2006* (Billion Baht).

0

100

200

300

400

500

600

700

800

1999 2000 2001 2002 2003 2004 2005 2006

forestry and logging

agricultural services

animal farming

fruits, nuts and spices

vegetables and flowers

cereals and crops

Source: Office of the National Economic and Social Development Board, Thailand, 2006. * At market prices.

Available at http://www.nesdb.go.th/econSocial/macro/gdp_data/mainaccount.htm


6

Figure 3. Poultry and other livestock GDP, Thailand, 1999 – 2006* (Billion Baht).

0

20

40

60

80

1999 2000 2001 2002 2003 2004 2005 2006

Poultry Other Livestock

Source: Adapted using data from NaRanong and the Office of the NESDB, Thailand, 2006. * At market prices.

Meat production represents more than three fourths of livestock GDP. By 2001, Thailand

had reached a production of two million tons of meat, most of it contributed by poultry

(Figure 4). During the past two decades, the total production of poultry meat has grown at

an annual rate of 4 to 7 percent for chickens and 1 to 3 percent for ducks. In 2005, Thailand’s

poultry (chicken and duck) meat production reached a little over 1 million tons, which

represents close to 52 percent of total Thai meat production (Figure 4).

Figure 4. Thailand’s chicken, duck, pig and cattle meat production, 1961 – 2007.

0

500000

1000000

1500000

2000000

2500000

19611963

1965

1967

19691971

1973

1975

19771979

1981

1983

19851987

1989

1991

19931995

1997

1999

20012003

2005

2007

To

nn

es

CHICKEN DUCK MEAT PIG MEAT CATTLE MEAT

Source: FAOSTAT, 2008.


7

Thailand’s Poultry Industry

In Thailand, poultry are an integral part of rural peoples’ livelihoods, with backyard chicken

flocks of predominantly indigenous chickens and native waterfowl being the most prominent

flock types in early 2004 (Figure 5), together constituting more than 95 percent of all flocks

(but only about 30 percent of all birds). The vast majority of birds, mainly broilers (Figure 6),

are raised in commercial farms for domestic and international markets. It has been

estimated that the Thai poultry industry generates employment for around 110,000 people.

Figure 5. Number of flocks by type of

poultry in Thailand in 2004 (n ≈ 2.9 million).

Figure 6. Number of birds by flock type in

Thailand in 2004 (n ≈ 280 million).

23.9%

1.2%

1.6%

73.2%

0.1%

Waterfowl Layer Broiler Backyard Quail

8.6%

8.7%

58.9%

22.5%

1.3%

Waterfowl Layer Broiler Native Quail

Source: Tiensin et al., 2005.

Chickens: Chickens are the most important type of poultry raised and consumed in Thailand,

with a standing population of approximately 250 million birds. The classification of chicken

types used by the Thai Department of Livestock Development (DLD) is: layers, broilers and

native chickens.

Native chickens are raised and kept for several purposes: home-consumption, alternative

income source and supply to specialty markets. Broilers are important, both for domestic

consumption and exports, while, like in most countries, commercial egg production is mainly

for domestic consumption.

As can be seen in Figure 7, the number of native chicken is estimated to have remained

relatively stable between 2003 and 2007 at around 60 million birds, while large fluctuations,

related to the HPAI epidemic, were seen in the broiler population (populations fluctuating

between 100 and 175 million birds). In the case of layers, populations have increased to

almost 50 million heads in 2007 from close to 25 million in 2003 (Figure 7). This rise may be a

result of a campaign to boost egg consumption in Thailand (Bangkok Post, 2002).


8

Figure 7. Layer, broiler and native chicken populations, Thailand, 2003 – 2007 (million).

0

50

100

150

200

250

300

2003 2004 2005 2006 2007

Native Chickens Broiler Chickens Layer Chickens

Source: DLD – MAC, 2008.

Waterfowl: The Thai waterfowl population, comprising various types of ducks and geese,

despite being prominent, with between 22 and 25 million birds is only about one tenth the

size of the chicken population. Slightly less than half of the waterfowl are layer ducks,

followed by broiler ducks and Muscovy ducks. The population of geese is negligible (Fig. 8).

Similar to chickens, overall waterfowl stocks decreased in 2004 due to the HPAI epidemic.

Although the population of layer and broiler ducks has again reached pre-HPAI levels,

Muscovy ducks have declined from 6.1 million in 2003 to 3.6 million in 2007.

Figure 8. Waterfowl populations, Thailand, 2003 – 2007 (million).

0

5

10

15

20

25

30

2003 2004 2005 2006 2007

Muscovy Ducks Broiler Ducks Layer Ducks Geese


Quail: Very similar to chickens, ducks and geese, quail stocks declined in 2004 to 3.3 million

from 3.7 million a year earlier. By 2007, numbers surpassed pre-outbreak levels and

exceeded 5 million (Figure 9). Quails are largely kept for the production of eggs.


9

Figure 9. Quail population, Thailand, 2003 – 2007 (million).

0

1

2

3

4

5

6

7

2003 2004 2005 2006 2007


Chicken and Duck Production Systems

For explanatory purposes, and in conformity with companion reports for Viet Nam and

Cambodia, this report uses a threefold classification to describe chicken and duck production

systems in Thailand: (I) traditional, small-scale, extensive backyard/garden poultry

production, (II) semi-intensive, small- to medium-scale, market-oriented, commercial

chicken/duck production, and (III) intensive, large scale, industrially-integrated chicken/duck

production.

Traditional, small-scale, extensive backyard/garden poultry production

In 2004, this type of poultry production system accounted for around three fifths of poultry

flocks and one fifth of the total poultry population. Most rural households in Thailand raise

native chickens, which are also commonly known as Thai indigenous chickens (TIC). They are

preferred over imported exotic breeds because they survive under harsh conditions and

reproduce regularly under minimum care, feed and management. These birds are kept in

backyards and sometimes fenced to protect them from predators and thieves at night. They

get fed twice daily by women, elders and children, and move freely with their flock

scavenging for edible insects, seeds, kitchen waste and fresh plant parts. Laying birds are

given broken rice, rice bran, ground corn kernels and cassava chips. Some farmers also

provide them with termites and house fly larvae. No vaccinations and de-worming are

performed. Newcastle disease, fowl cholera and fowl pox are the most common diseases

affecting TIC (Choprakarn and Wongpichet, 2007).

Flocks on average consist of one rooster and 3 to 5 hens. Each flock can produce 90 to 150

chicks that are kept until reaching 1 to 1.5 kg in 4 to 5 months time. Flock size fluctuates

throughout the year depending on hatching rates, natural feed availability, diseases and

farmers’ time constraints. High mortality rates of about 30 to 70 percent occur during

seasonal change periods. Flock sizes decline from March to September (hot and humid) due

to low hatching and high mortality rates.

Cochin Chinese and Red Jungle Fowl are the TIC ancestors. Maturity is reached at 6 to 8

months for females and 8 to 12 months for male chickens. A hen can spend up to 10 to 15


10

weeks in each reproductive cycle, and lays 10 to 12 eggs per clutch, with a hatching rate of

80 to 85 percent. Each household produces 2 to 4 marketable size birds per month, which

translates to 25 to 50 birds per year of which 15 to 35 birds are used for home consumption

(50 - 70%) and the rest for sales.

Demand for TIC meat is generally higher than supply because it is regarded as tastier and

healthier. Particularly high demand and prices for TIC occur from May to June and November

to January due to festivities and religious events (Choprakarn and Wongpichet, 2007).

Semi-intensive, small-scale to medium-scale, market-oriented, commercial chicken/duck

production

This type of poultry production system operates at relatively larger scales, uses more

developed infrastructure, and has a higher rate of commercialization than the system

described above. Because the boundaries with the traditional extensive system at one end

previous and with the large-scale industrial production system at the other end are not

clearly demarcated, it is difficult estimate the number of flocks and birds which fall into this

system. Roughly, it may account for one fifth of poultry flocks and one eight of the total

poultry population.

Chickens and ducks are provided with locally manufactured animal feeds, in addition to

natural feed resources such as worms, insects, pests, vegetables, and grass. Own-stock

hatching is preferred, but day-old chicks/ducklings of imported breeds are bought at local

hatcheries or at local markets. Production cycles for meat birds range from 70 to 90 days,

with intermediate mortality rates and efficiency levels. For the purpose of this report, flock

sizes ranging from 100 to 1,000 birds are classified as falling into this production system.

Backyards, gardens and orchards are usually fenced with nylon netting or bamboo material

or walled with bricks, however, makeshift enclosures made with local primary building

materials, such as mud bricks or bamboo, or tree branches are also frequently seen. Bio-

security measures for disease prevention, treatment and management are given a little bit

more attention as compared to traditional backyard raising systems.

Ducks are usually raised outdoors in lakes and man-made ponds. Husbandry practices vary

by flock size, number of years in business, product specificities and local market prices. Duck

raising cycles coincide with rice production periods and demand peaks. Local hatcheries

supply ducklings, feed manufacturers supply feedstuffs, and informal lenders supply short-

term capital to fund these operations.

Intensive, large scale, industrially-integrated chicken/duck production

In 2004, intensive large-scale, industrially-integrated poultry raising farms accounted for

about 3 percent of poultry flocks and close to 70 percent of total population (Figures 5 and

6). The modern poultry sector in Thailand is characterized by industrialization and vertical

integration. This evolution has taken place over the past two decades. Up until late 2003, the

main factor of progress has been technological innovation, specifically, the introduction of

evaporative-cooling systems in production houses, which save labour costs and substantially

increase weight gains, survival rates and feed conversion.

Another factor underlying the fast growth in the poultry industry was contract farming, that

is, legally-binding contracts between large poultry integrators and poultry producers.

Entering into written agreements with poultry producers allows firms in the poultry business

to more flexibly adjust production volumes to changes occurring in both, domestic and


11

export markets. Poultry producers benefit from these arrangements by relatively lower risk

exposures to price movements and supply disruptions (Leibler et al, 2008).

Despite the benefits of contract farming, Thailand’s poultry firms moved away from contract

farming and opted more towards vertical integration in a collaborative effort to ensure

compliance with Europe’s increasingly stringent import requirements for food safety and

animal welfare.

Commercial breeding farms / hatcheries

Breeding farms raise the grandparent (GP) and parent stock (PS) that produce fertile eggs

which, after incubation and hatching, provide chicks to the production sector, mainly

composed of broiler and layer/pullet farms. The breeding houses consist of closed sheds (45

x 350 feet) equipped with ventilation, drinkers and feeder systems with a capacity to hold up

to 10,000 birds in high biosecurity conditions. An average breeding farm can produce

800,000 breeders per year.

Hatcheries are built separately and are exclusively for hatching eggs from GP and PS farms.

These are equipped with incubators, setters and storage rooms with capacities of 25,000

eggs per batch. The quality of the chicks produced is monitored by checking parameters

such as uniformity, feed conversion rate, and cost effectiveness. This information is fed back

to the breeding farms and hatcheries to optimize performance and survivability.

Modern incubators in Thailand provide optimum support for the embryonic development of

modern breeds in the hot climates, whereas setters feature reduced heat-up time options,

modifiable cooling capacity and integrated heating/cooling mechanisms to ensure the room

environment mimics that of the nest.

Intensive industrial chicken broiler farms

In January 2004, intensive industrial chicken broiler production accounted for less than two

percent of poultry flocks but for nearly sixty percent of total standing poultry population

(Figures 5 and 6). These values do not reflect the sharp drop in total broiler production in

2004 to 694 million from 1.1 billion in 2003 due to HPAI and resulting export bans. Broiler

production has not returned to pre-outbreak levels, but is on a rising trend (Figure 10).

Industrial broiler production is characterized by keeping poultry indoors throughout the

entire production cycle. The facilities are modern, well equipped and mechanized (i.e. semi-

automatic and automatic equipment). Built-in systems accommodate internal feeding belts,

water supply, controls for humidity, air, and waste management. Some systems have more

extensive automation, including computerized monitoring and remote controls.

State-of-the-art poultry houses equipped with cutting edge technologies enable the

management of some production and growth variables through controlled ventilation inlets,

tunnel ventilation and evaporative cooling that work extremely well in tropical climates.

However, careful attention needs to be paid to the many details in managing these systems;

otherwise, bodyweight and feed conversion rates can be impaired, resulting in significant

financial loss to both the grower and integrator.


12

Figure 10. Total broiler production by region, Thailand, 1996 – 2006 (million birds).

0

100

200

300

400

500

600

700

800

900

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Northern North-eastern Southern Central Plain

Source: Department of Livestock Development (DLD) and Office of Agricultural Economics (OAE).

Development of the broiler industry in Thailand has been largely driven by the private

sector, with little intervention or assistance from the Thai government. However things have

changed. To cope with the rapid evolution of global commerce and to comply with

international livestock trade requirements, the Thai government, by vesting responsibility on

the Department of Livestock Development (DLD), has decreed farm and hygiene standards,

and various regulations on animal handling and welfare.

For example, some years ago, EU food inspectors detected antibiotics (which are banned in

Europe) and dioxins in some Thai broiler imports. These findings prompted exporters to

switch their production from contract farming to vertical integration (Figure 11) to be able to

exert greater control over the entire production process. This shift also increases economies

of scale, ensures cheaper supply of inputs, promotes traceability, facilitates management,

and increases homogeneity of products.

In this vertical production system, most birds are commercial chickens of foreign breeds.

Integrators have their own state-of-the-art hatcheries which supply day-old-chicks to their

farms, with surpluses sold to contractors and independent producers. Feed mills are also

integrated. Owning and operating a feed mill ensures scheduled delivery of feedstuffs,

reduces feed costs and follows the most recent traceability requirements. Some large

companies also have their own animal health departments. Besides in-house production by

company-owned farms, many integrators still also rely, partly, on contract farming.


13

Figure 11. Schematic of vertical integration in broiler production in Thailand.

Source: Thai Broiler Processing Exporters Association and the Department of Livestock Development (DLD).

Broadly, broiler raising has been shortened from 45 to 40 days, thus lessening feed costs.

Nowadays, broiler chickens sold by retailers are smaller than they used to be; however, their

feed conversion rates have improved dramatically to rations of 1.75 : 1 (and even lower in

exceptional cases).

This process of modernization has brought with it winners and losers. One of the winners

has been supply and construction firms. For example, the Evaporative Cooling Housing1

(ECH) systems, which maintain temperatures between 26 and 30˚C or less during hot-humid

seasons in tropical Thailand, have to be bought, built, installed and maintained by supply

and construction firms. ECH and its complementary technologies have been heralded as the

most efficient cost saving technologies the industry has introduced, because they

substantially reduce feed and labour costs and increase growth and survival rates.

Intensive industrial chicken layer farms

In January 2004, intensive industrial chicken layer production accounted for slightly more

than one percent of poultry flocks and slightly less than ten percent of total poultry

population (Figures 5 and 6). Layer farms produce white and brown eggs for human

consumption and the manufacture of secondary food products. These eggs are infertile and

1 ECH is nothing more than an enclosed semi-automatic production house equipped with large fans and water sprinklers to cool

down temperatures generated by the usual 10,000 to 25,000 birds that are designed to hold.

Imports

Grand Parent Stock

Parent Stock

Hatcheries

Medicines

Feedstuffs

Broiler Farms

(integrated, contracted, independent)

Slaughterhouses Processing Plants

Domestic Markets

(Local)

Export Markets

(International)


14

sold domestically. Structural changes in the layer industry come much slower than those of

broilers but here too, cost control has been the main driver for integration.

Geographic Distribution of Poultry Production

The largest numbers as well as a large share of the industrial chicken, farmed and free-

grazing ducks are raised in the central region of Thailand, which accounts for roughly one

fifth of the total area of Thailand and which is also densely populated (197 person/ km2)

(Figures 12 and 13).

Figure 12: Major geographic regions of

Thailand.

Figure 13: Poultry populations (million birds)

by geographic region (2003).

0

10

20

30

40

50

60

70

80

90

100

No

rth

Cen

tral

East

So

uth

No

rth

East

Backyard Broilers Layers

Waterfowl Quail

Source: Tiensin et al., 2005.

The concentration of industrial / farmed chickens and ducks in the central region is a result

of the close proximity of feed resources, hatcheries, feed mills, ports, railroads, and high-

volume processing plants that allow massive throughputs. Before the advent of HPAI, free-

grazing ducks were also highly concentrated in the central region because of the vast

accessibility to rice grown in this region, especially because rice paddies surround entire

cities and towns.

Although indigenous/native chickens are ubiquitous throughout Thailand, these are mostly

concentrated in the northern and north-eastern regions, which are physically the largest and

widest (and also poorest) regions in the country.

Estimated densities of industrial / farmed chicken and duck populations as well as of grazing

ducks and backyard / native chicken are presented in Figures 14 a, b, c, and d.

Northern Region

Central Region

Northeastern Region

Eastern Region

Southern Region


15

Figure 14 a: Estimated density of farmed /

industrial chicken in Thailand.

Figure 14 b: Estimated density of farmed

ducks in Thailand.

Figure 14 c: Estimated density of free-

grazing ducks in Thailand.

Figure 14 d: Estimated density of native /

backyard chicken in Thailand.

Source: Gilbert et al., 2006.

Bangkok

Chiang Mai

Bangkok

Chiang Mai

Bangkok

Chiang Mai

Bangkok

Chiang Mai


16

Domestic Poultry Markets and International Trade

Thailand meets almost its entire national demand for poultry products as it does not import

chicken and duck meats or eggs (see Figures 15 and 16). Around sixty percent of industrial

broiler meat production is consumed domestically with small and medium size poultry

farmers and backyard poultry producers, especially those located north and east of Thailand,

complementing domestic supply. In value terms (and in ‘normal’ years), however, export

receipts for chicken meat and their products, chicken eggs and duck meat and their products

account for more than 80 percent of total poultry GDP.

Domestic poultry markets and marketing

Poultry and poultry product sales take place in wet and dry markets, while chicken, duck and

quail eggs are retailed almost everywhere. For semi-intensive smallholder operators and

traditional backyard poultry producers servicing rural domestic markets, poultry marketing is

facilitated by traders who collect birds from various villages and communities and resell to

retailers at urban market locations, who offer and sell birds to end consumers. For poultry

producers located in the highlands or far from commercial centres, market participation is

constrained by difficult agro-ecological conditions and infrastructure limitations. The choice

of marketing channel is determined by a number of factors, with geographical location,

distance to markets, density of traders, transportation networks, product price and

transaction cost as main determinants.

Although large integrators dominate the export market, their attempt to capture a major

market share in the domestic chicken meat market by appointing retailers to sell their

‘branded’ products in wet markets has been less successful as small- and medium-scale

wholesalers are very competitive due to their much lower overhead costs (Poapongsakorn,

2005).

Rising incomes and urbanisation have impacted poultry retail channels. The advent of

western-type market outlets (i.e. hypermarkets and cash-and-carry convenience stores) as

well as fast-food outlets (i.e. Kentucky Fried Chicken, Sizzler, and Popeye’s) have stimulated

consumption growth and prompted the introduction of new products (i.e. breaded chicken

parts, chicken nuggets, chicken burger patties, breast filets, chicken tenders, and popcorn

chicken) that are also offered in frozen food section at retail stores. Chicken parts that are

not exported, such as wings and legs, end up in fryers of fast food restaurants, some of

which are owned by vertically integrated conglomerates (i.e. Chester Grill by CP group).

Table 5. Evolution of hypermarkets and convenience stores, Thailand, 1998-2006.

1998 2006 Location Description

Total Bangkok Upcountry Total

Carrefour 7 18 6 24

Tesco Lotus 13 28 28 56

Tesco Lotus Market 0 5 18 23

Lotus Express 0 212 33 245

Big C 20 23 26 49

Leader Price 0 5 0 5

Tops Supermarket 40 66 23 89

Total 80 357 134 491

Source: 1998 data from Poapongsakorn et al. (2002) and 2006 data from Meat Weekly Report.


17

Table 5 above shows increased numbers of hypermarkets and convenience stores in

Thailand (mainly Bangkok) from 1998 to 2006. International corporations such as Tesco and

Carrefour have expanded their presence to take advantage of Thais’ rising incomes. For

example, Lotus Express has up to 245 stores and Tops supermarket more than doubled the

number of store presence, while Carrefour’s market presence tripled.

Although the number of wet markets in Bangkok has declined substantially, there are

probably thousands of chicken retailers in almost 500 wet markets and small food shops in

the sub-urban communities of the city. A consumer survey in Bangkok found that most

people still prefer to buy fresh food and fruits from the wet markets and small scale food

retailers near their home. The main reasons are lower prices and that food in wet markets,

particularly meat, fish, vegetables and fruits are fresher than those in the supermarkets

(TDRI, 2004 cited in Poapongsakorn, 2005). Wet and dry markets (usually located alongside)

offer poultry and non-poultry products, often with no refrigeration, makeshift edifications,

multi-species caging, live slaughtering, extemporal waste disposal, and few sanitary facilities.

Isolation of avian influenza viruses from live bird markets has been reported in Viet Nam and

People’s Republic of China (Nguyen et al., 2005; Wang et al., 2006).

International trade

Exports: Thailand had established itself as the fourth largest exporter of poultry meat prior

to the incursion of HPAI in 2004 (only Brazil, USA and EU exported more). In 2003, Thailand

exported nearly 485 thousand tonnes of poultry meat (nearly 40% of production),

representing an export revenue of nearly 45 trillion Baht (US$1.083 billion) (Figure 15). For

duck meats, products and by-products export revenues were around 2.2 trillion Baht (US$

52.9 million) in 2003 (Figure 16). For both types of poultry products, export revenues

dropped to nil in 2004 due to the incursion of HPAI, but picked up again in 2005 and 2006.

Small surpluses of eggs are exported to neighbouring countries.

Figure 15. Chicken product imports and exports by value, Thailand, 2003 – 2006.

0.00

15.00

30.00

45.00

Exported Imported Exported Imported Exported Imported

Live birds Eggs Meats, products and by-products

Tri

llio

n B

ah

t

2003 2004 2005 2006



18

Imports: Thailand is a net importer of live birds. Most imported live birds are genetic

material (i.e. parent stock) to supply the industrial farm sector with chicks and ducklings

(Figures 15 and 16).

Figure 16. Duck product imports and exports by value, Thailand, 2003 – 2006.

0.00

1.00

2.00

Exported Imported Exported Imported

Live birds Meats, products and by-products

Tri

llio

n B

ah

t

2003 2004 2005 2006


Poultry meats: Thailand exports both, frozen and precooked chicken meat. Frozen chicken

meat exports started in 1982, whereas precooked chicken meat exports started 12 years

later, in 1994 (see Annex 5). Not all chicken parts are exportable; thighs, wings and breasts

make up the majority of pieces sent to international markets.

Between 1994 and 2003, frozen de-boned chicken meat exports increased from 153

thousand tonnes to 331 thousand tonnes (Annex 5), with Japan and the EU being the main

recipients, but, as a result of HPAI, these exports fell to 26 thousand tonnes in 2004 (Annex

4). In 2005, exports to Japan and the EU accounted for 48 and 47 percent of total broiler

meat exports, respectively. The Netherlands, Germany, Belgium, France, and the UK are the

major importers of Thai poultry products in the European Union (Annex 4).

Precooked chicken meat exports began with a little less than 16 thousand tonnes in 1994

(accounting for 10 percent of total exports that year) and reached more than 270 thousand

tonnes in 2006 (Annex 4 and Annex 5). In 2003, in value terms, the share of precooked

chicken meat was already close to 47 percent of total broiler meat exports1. However, after

HPAI outbreaks and consequent export bans in 2004, exports of precooked chicken meat

increased drastically (Figure 17). For example, from 2003 to 2006, the quantity of precooked

chicken meat exported almost doubled, accounting for 97 percent of total chicken meat

exports in 2006 (Figure 17).

1 The average export prices per tonne range from US$3,022 to US$1,637 for frozen chicken and from US$5,628 to $2,234 for

precooked chicken (Annex 5).


19

Figure 17. Export values of frozen and value-added/pre-cooked poultry, Thailand, 1998 - 2006.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Mill

ion

Ba

ht

FROZEN POULTRY VALUE ADDED POULTRY

Source: Ministry of Commerce, Thailand, 2007.

In the recent past, Japan bought uncooked frozen poultry meat in the form of boneless leg

meat, boneless breast meat, special cut meat in sticks and other made-to-order chicken

products. Nowadays, almost all exported products are made-to-order, ready-to-eat

products, which are processed or prepared by heat exposure (i.e. grilling, steaming, and

boiling) and further elaborated by packaging (i.e. hermetic vacuum sealing). Some of these

products are breaded or seasoned (i.e. with salts, species, and sauces) and disinfected (i.e.

UV radiation). The EU used to import Thai broiler meat as uncooked, skinless-boneless

breast meat, but also switched to semi-cooked and cooked meat in made-to-order, ready-to-

eat product offerings. Marketing of value-added products is an easy route for exporters to

differentiate their most prized product offerings as high-end consumers demand products

that can be quickly and easily prepared under 15-20 minutes time.

Comparatively, real wages in Thailand are higher than in neighbouring countries. This poses

a threat to exports because as soon as its neighbours start to comply with major importers’

food safety and animal welfare requirements, it would not be long for Thailand to face

strong competition. Thailand’s private sector foresaw this, and strategically established

production hubs in China, Cambodia and Viet Nam. Also, production emphasis was shifted

towards precooked chicken products in an attempt to supply higher value-added products in

order to overcome the disadvantages of relying on a single product line.

Thailand is protected by an import tariff of 30 percent for chilled or frozen uncooked meat

and 40 percent for cooked chicken meat. Without these import tariffs, it would be possible

for the US and Brazil to export low-value chicken pieces, especially wings and leg-quarters to

Thailand.

Eggs: As mentioned previously, the vast majority of national egg production is locally

consumed, with very few eggs imported and /or exported. When required, egg surpluses are


20

exported to stabilize domestic egg prices. Egg exports suffered a similar fate as fresh chicken

meat exports in 2004 due to strict import bans by recipient countries (Figure 18).

Figure 18. Quantity and value of egg exports, Thailand, 2003 – 2006 (million).

0

50

100

150

200

250

300

350

400

2003 2004 2005 2006

Quantity Value (Baht)



21

Poultry, Livelihoods and Nutrition

As in most southeast Asian countries, livestock plays an integral role in rural farming systems

that include cattle, buffalo, pigs, goats, and poultry (chickens and ducks) in Thailand. More

specifically, poultry are of considerable importance to the livelihoods of smallholder and

village farmers, particularly in remote rural areas where poultry represents a major source of

animal protein and provides cash income in times of need. Poultry production, as well as

aquaculture, has been highlighted by government and non-government institutions as a tool

for poverty alleviation with the potential of promoting rural economic growth.

Contribution of Poultry to Household Income

The average total monthly income in 2000 for all Thai households is a little over 12,000 Baht

(US$298); with land owning and land renting farm households earning 57 and 65 percent of

this value, respectively. Income from farming represents roughly 55 and 63 percent of total

income for land owning and land renting farm households, respectively. Because farmers

diversify by engaging in mixed farming systems, their farming incomes have multiple origins

(Figure 19).

Figure 19. Average monthly total and farming incomes by socio-economic class of

households, Thailand, 2000.

0

2000

4000

6000

8000

10000

12000

all households land owning farm HH land renting farm HH

Baht TOTAL INCOME FARMING INCOME

Source: National Statistics Office, Thailand, 2008; available at http://web.nso.go.th/eng/stat/subject/toc11.xls

Independent of its contribution to total rural incomes, poultry provides a safety net and a

way for poor households to add-value to the little resources at their disposal.


22

Household Food Expenditures and Nutritional Status

In the late 1980s and early 1990s, the proportion of total expenditures allocated to food

items accounted for 34 to 40 percent of all household expenditure in a five region survey. In

2002, this share ranged between 34 and 38 percent for all income quintiles with the

exception of the upper 20 percent, who still allocated an average of 23 percent of total

expenditure to food (Table 6).

Table 6. Total and food expenditure by income quintile (1994 prices), Thailand.

Description Poorest

quintile

2nd quintile 3rd quintile 4th quintile Richest

quintile

Total Expenditure 3,147 4,374 5,933 8,162 16,876

Food Expenditure 1,154 1,688 2,169 2,788 3,867

Food as % 37 38 37 34 23 Source: Poapongsakorn, 2005.

Nearly three-quarters of food expenditures (72%) are on raw food items for home

preparation rather than eat-out expenditures and ready-to-eat/take-home foods. Bangkok,

where almost half of food expenditures are not home-based is an exception. Most of the

food acquired for household consumption (77%) is bought rather than home-produced

except in households in the northeast, where purchased food constitutes about half (52%).

In general, households in rural areas tend to purchase more food items to cook/prepare at

home than urban and peri-urban households.

The typical Thai dietary intake relies heavily on rice as its main source of calories. A national

nutrition survey in 2006 revealed that dietary consumption is 1,875 calories per capita and is

increasing due to access to more caloric food items (i.e. sugars and fats). 60 percent of total

calories come from carbohydrates, the contribution of protein to calorie intake increased

from 11.5 percent in 1960 to 13.2 percent while fat consumption also increased from

contributing 9 percent of the total calories in 1960 to 24 percent in 2006. The proportion of

animal protein to total protein has risen to 49.5 percent compared to 32 percent in 1960.

Average intakes of micronutrients are generally adequate; 126 percent of RDA for iron, 231

percent for Vitamin A, 313 percent for Vitamin C, but inadequate for calcium.

Figure 20 below shows comparative consumption patterns of chicken, pork and beef. Pork

consumption has remained steady over a decade at roughly 12 kg per year, whereas beef

plateaus at 4 kg per year after coming down from a high of 6.25 kg per year in 1995. Broiler

and pork meats are preferred by Thais, not only for their high nutritional value, but also due

to ingrained religious reasons. Broiler meat consumption in Thailand has grown steadily

from 7.9 kg/yr in 1990 to 14.1 kg/yr in 2003.

In 2004 and 2005, a trend disruption occurred due to HPAI outbreaks and fears of disease

contraction among Thai consumers. By 2006, consumption returned to pre-outbreak levels.

In rural areas, and especially in the highlands, consumption of chicken meat and eggs is the

main source of animal protein which is complemented with beans, vegetables and fruits.


23

Figure 20. Annual meat consumption (kg/person), Thailand, 1995 – 2006.

0

5

10

15

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Kg p

er

pers

on

BROILER PORK BEEF

Source: Rabobank, USDA, FAO (various years, multiple datasets).

Expansion of broiler production has contributed to a long-term decline in chicken prices

relative to pork leading to increased chicken consumption. From 1993 until 2005 the retail

price of chicken has remained between 40 – 60 Bath (US$ 1.20 – 1.80) per kilogram, which is

at least a quarter less than the price of one kg of pork (Figure 21).

Figure 21. Retail prices of pork, beef, and

chicken in Bangkok, 1993 – 2005 (Baht/kg).

Figure 22. Expenditure on poultry meat as

percent of food expenditure by income

quintile, 1990 to 2002.

0

20

40

60

80

100

120

140

160

180

1993

1995

1997

1999

2001

2003

2005

Pork Beef Chicken

0

5

10

15

20

25

30

35

Po

ore

st

Q2

Q3

Q4

Ric

hest

1990

1994

1998

2002

Source: Ministry of Commerce, Thailand, 2007. Source: Adapted from Poapongsakorn, 2005.

Between 1990 and 2002, average real expenditure on chicken increased from 67 Baht per

month to 77 Baht. This relatively small change masks significant shifts in relative allocation

of food expenditure by different income groups. While the top three quintiles have

significantly reduced their relative spending on chicken (fresh and processed, excluding eggs)

within the food basket, the poorest quintile has markedly increased its relative expenditure

on chicken, making chicken the main source of meat protein for the poor (Figure 22).


24

Number of daily H5N1 outbreaks in Thailand

0

5

10

15

20

25

30

35

40

45

50

01

/01/2

004

01

/03/2

004

01

/05/2

004

01

/07/2

004

01

/09/2

004

01

/11/2

004

01

/01/2

005

01

/03/2

005

01

/05/2

005

01

/07/2

005

01

/09/2

005

01

/11/2

005

01

/01/2

006

01

/03/2

006

01

/05/2

006

01

/07/2

006

01

/09/2

006

01

/11/2

006

01

/01/2

007

01

/03/2

007

Time

Nb

of

ou

tbre

ak

s

The HPAI Epidemic: Course and Institutional Response

In late 2003 massive mortalities were reported in commercial chicken farms that were later

confirmed to be HPAI. In a matter of days, the emerging avian influenza epidemic became a

national and regional crisis.

Course of the HPAI Epidemic

The first case of H5N1 in poultry in Thailand occurred in laying hens and was officially

diagnosed and reported to the OIE on January 23, 2004. Since then, until January 2007, a

total of 1,929 HPAI H5N1 outbreaks have been officially registered by the Thai department

of livestock development (DLD). Epidemiological data collected by DLD includes the number

of outbreaks reported per day and the type of affected flock while information on the size of

affected poultry flocks by species is not available.

Temporal pattern of H5N1 outbreaks

The first wave of HPAI H5N1 outbreaks in Thailand officially started in January 2004 and

lasted until May 2004. Subsequently, a second larger wave occurred from July 2004 to April

2005 totalling 1,655 outbreaks and reaching a peak of 39 outbreaks per day in November

2004 (Figure 23).

Some other cases were reported from July to November 2005. In 2006, only two outbreaks

were reported during the month of July and two outbreaks only were also reported in

January 2007. The last outbreak analyzed in this dataset occurred in March 2007 and was

recorded in the north-eastern region.

Figure 23. Temporal pattern of HPAI H5N1 outbreaks in Thailand from 2004 until 2007.

Source: Compiled by authors from DLD data.

The temporal pattern was stratified by regions, differentiating the Central region from other

regions (Figure 24). The term ‘other regions’ refers to the northern region, north-eastern

region, eastern region and southern region. The temporal pattern of outbreaks does not

seem to differ when this administrative stratification is applied.


25

Figure 24. Comparison of temporal patterns of HPAI H5N1 outbreaks in

Thailand from 2004 until 2007 for the central region and other regions.

Nb of daily outbreak in Central region of Thailand

0

5

10

15

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30

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45

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Time

Nb

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aks

Nb of daily outbreaks in other regions of Thailand than Central

0

5

10

15

20

25

30

35

40

45

50

01/0

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004

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01/0

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01/0

5/2

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005

01/0

9/2

005

01/1

1/2

005

01/0

1/2

006

01/0

3/2

006

01/0

5/2

006

01/0

7/2

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01/0

9/2

006

01/1

1/2

006

01/0

1/2

007

01/0

3/2

007

Time

Nb

of

ou

tbre

aks

Source: Compiled by authors from DLD data.

All H5N1 isolates from 2004 and 2005 belong to the same virus clade 1, which at the time

was also the dominant clade in Viet Nam and which remains the dominant clade in southern

Viet Nam. 2006 saw the introduction of clade 2.2.4, which became one of the dominant

clades in China in 2005 and was isolated in northern Viet Nam in 2007 (Inui, 2008).

Central Region

Other Regions


26

Spatial pattern of H5N1 outbreaks

Most HPAI affected districts were located in the centre of the country (Figure 25). Nine

districts from six provinces (i.e. Suphanburi, Phitsanulok, Lopburi, Ang Thong, Kampaeng

Phet and Phichit provinces) reported between 36 and 77 outbreaks each.

Figure 25. Cumulative total of H5N1 outbreaks by district in Thailand, 2004 to 2008.

Spatio-temporal pattern of H5N1 outbreaks

The combined temporal and spatial pattern combining location and number of outbreaks

was mapped in one figure to obtain an overview of the development of the epidemic. It

appears that the second epidemic wave (from July 2004 to April 2005) was concentrated in

the central and bordering northern region of Thailand, while neither the first wave (from

January to May 2005) nor the following outbreak waves in 2006 and 2007 seem to follow a

particular spatial pattern (Figure 26).


27


0

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Time

Nb

of

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s

1st

wave 2nd

wave July to Nov 05 2006 and 2007

Figure 26. Spatio-temporal pattern of H5N1 outbreaks in Thailand since 2004.


28

HPAI incidence by poultry flock type

The number of flocks of the different types of poultry affected by HPAI during the first two major and

minor third epidemic waves as recorded by DLD is depicted in Figure 273.

As can be seen in Figure 27, in all three waves,

backyard flocks represented the majority of

affected flocks (73, 58, and 77%). The second most

affected flock type during the first wave were

broiler flocks (11%), while in the second wave duck

and geese flocks represented the second most

affected flock type (30%), followed by broiler and

layer flocks (approx. 5% each). The situation again

changed during the third minor epidemic wave

with quail flocks becoming the second most

affected flock type (8%), closely followed by duck

and geese flocks (7%) as the third most affected

flock type.

The number of HPAI affected flocks of different

flock types primarily is a reflection of the absolute

abundance of flocks of the different categories

within the classification used by the Thai DLD. In

order to obtain an approximation of the absolute

and relative risk of contracting HPAI for the

various flock types, the number of affected flocks

by type was scaled by the respective number of flocks initially at risk (as reported in Figure 26). The

results of this crude analysis are presented in Table 7. Not surprisingly, the absolute risk of HPAI was

highest for all flock types during the second epidemic wave (July 2004 to April 2005). However,

against expectations, during all three episodes analysed, the risk of HPAI4 was consistently lower in

backyard and duck/geese flocks compared to layer, broiler and particularly to quail flocks, in which

by far the highest incidence was recorded.

Table 7. HPAI incidence per 1,000 flocks by flock type and relative HPAI risk (RR)

for different flock types (HPAI risk of backyard flocks as baseline).

Backyard Waterfowl Layer Broiler Quail

Incidence1 RR

2 Incidence

1 RR

2 Incidence

1 RR

2 Incidence

1 RR

2 Incidence

1 RR

2

Wave-I 0.061 1.00 0.020 0.33 0.548 9.01 0.481 7.90 2.700 44.37

Wave-II 0.454 1.00 0.707 1.56 2.111 4.65 1.879 4.13 12.727 28.01

Wave-III 0.027 1.00 0.007 0.26 0.055 2.02 0.099 3.22 2.314 85.24 1 per 1,000 flocks 2 relative risk vis-à-vis backyard flocks during the same outbreak wave

Source: Authors’ calculations.

The highest (approximately 35-fold) increase in diagnosed HPAI incidence between the first and

second wave was recorded for duck/geese flocks, the flock type which during the first wave had the

lowest diagnosed HPAI incidence, while for other flock types the risk of diagnosing HPAI infection

increased by a factor of 5 to 7 between the first and the second wave.

3 This summary combines all affected poultry not classified as layer, broiler, ducks, geese or quail (e.g. ‘native’, ‘bantam’, ‘fighting cocks’

etc) into the category ‘backyard’. 4 It is acknowledged that the flock population at risk is likely to have changed as a result of the epidemic and control measures and that

therefore the results of the analysis can only be taken as indicative of major trends.

Figure 27. Number of outbreaks by poultry

flock type during the first three epidemic

waves.

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

W-I W-II W-III

Quail

Layer

Broiler

Waterfowl

Backyard

Nr of outbreaks

Flock type

W-I: Jan. – May 2004; W-II: July 2004 – April 2005;

W-III: July – Nov 2005


29

Human cases

Up until October 2008, the World Health Organization (WHO) reports that Thailand has had 25

confirmed cases of HPAI in humans, of which 17 have been fatal.

Figure 28. Human cases of HPAI in Thailand, 2004 – 2008.

0

1

2

3

4

5

6

7

8

9

10

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M

Source: World Health Organization, 2008.

Of the confirmed HPAI cases in humans, 16 (64%) occurred in males and 9 (36%) in females. HPAI in

humans tends to affect younger rather than older individuals. For example, 14 (56%) of cases

occurred in people aged 20 or less, 6 (24%) in people aged between 20 and 40, and the remaining 5

(20%) in people over 40. Figure 28 above shows that 17 (68%) cases occurred in 2004. The high

percentage of cases in 2004 is directly correlated to the magnitude and intensity of the first and

second epidemic waves. The five human cases in 2005 and the three cases in 2006 also coincide with,

albeit minor, HPAI outbreaks in poultry.

Animal Health Services and Institutional Response

The Ministry of Agriculture and Cooperatives (MAC) in Thailand is the entity responsible to

administer the agriculture, forestry, water resources provision, irrigation, promotion and

development of farmers and cooperative system, including manufacturing process and agricultural

products as well as other agricultural issues (MAC, 2008).

MAC consists of 14 governmental agencies and these are: Office of Secretary to the Minister; Office

of the Permanent Secretary; The Royal Irrigation Department; Department of Cooperative Auditing;

Department of Fisheries; Department of Livestock Development; Department of Forestry; Land

Development Department; Department of Agriculture; Department of Agriculture Extension;

Cooperative Promotion Department; Agriculture Land Reform Office; Office of National Standard of

Agricultural Products and Food; and Office of Agricultural Economics (MAC, 2008).

The Department of Livestock Development (DLD) within MAC is responsible to promote and develop

the technology of production and animal health, and to ensure that there is sufficient amount of

animals certified by health standard and without residual chemicals and contaminating substances.

2004 2005 2006 2007


30

With the advent of HPAI in early 2004, DLD – MAC have been actively involved with the ministry of

health and other governmental dependencies to combat the spread of avian influenza disease

among animals and humans.

Control measures

Since 2004, control measures were implemented such as culling of infected flocks, restriction of

poultry movements and improved hygiene during production. Findings are summarized in Table 8.

During the first wave of outbreaks in January 2004, a radius of 5 km was applied for pre-emptive

culling around farm-outbreaks.

Restrictions of poultry movements were applied within 50 km around infected areas. In July 2004,

after realizing big losses of mostly healthy birds, pre-emptive culling was reduced to 1 km radius, and

a restriction of poultry movements was also reduced to 5 km radius. In the same time, DLD changed

the case definition to reduce the time to implement control measures once outbreaks were

reported. A case was then defined as a flock having more than 10 percent of mortality in one day;

and all birds, their products and other potential contaminated material would be destroyed

immediately. Samples were also collected for laboratory analysis. Additionally, birds were sampled

before movements, and they were allowed to move only after samples tested negative. Poultry

exhibition and cock fighting were forbidden. Registration of all fighting cocks was compulsory, and

cocks must now be tested.

In July 2005, the case definition was updated to improve detection and response. If poultry death

rates were higher than 1 percent on commercial farms and higher than 5 percent on backyard

poultry; birds, products and materials were destroyed. Pre-emptive culling was implemented within

a village only or within 1 km radius around an outbreak. Restriction of movements was increased to

10 km radius around infected area. Furthermore, any poultry restocking in the affected areas can be

carried out after 90 days provided that no more positive cases are detected.

As free-grazing ducks were likely to be a risk factor for the spread of the virus, the government

forced farmers to switch to a presumably ‘more secure’ house farming system, but too little time was

allocated for this change, and free-grazing ducks farmers were invited to only move their ducks

within 3-provincial areas designated by government edict (groups in Figure 29). In 2006, free-grazing

duck activities were strictly forbidden, with farmers having to house their birds. Vaccination has

never been implemented (Tiensin et al., 2007). Control measures applied since 2004 are summarized

in Table 8 and represented in Figure 29.

Additionally, to disseminate health messages on avian influenza to the public and healthcare

professionals, the ministry of health established a call-in hotline that recorded call volume from a

minimum of 30 calls per day to a maximum of 200 calls per day. Ironically, official television

messages were aired for only three days in the month of February 2004. In addition to these efforts,

local media coverage was extensive, with daily television, newspaper, and radio reports during the

peak outbreak months (Olsen et al., 2005).


31

Table 8. Control measures for H5N1 in Thailand since 2004.

January 2004 July 2004 July 2005 2006 and onwards

Case

definition

- Poultry with clinical

signs* and sudden

death of almost 100%

OR

- cumulative mortality

rate more than 40%

within 3 days without

noticeable signs

- Flock having poultry

death rate > 10% in one

day

- Poultry death rate > 1%

for commercial farms and

> 5 % for backyard poultry

- Poultry death rate >

1% for commercial

farms and > 5 % for

backyard poultry, plus

detection of clear

clinical signs of

disease at arrival

Culling - Pre-emptive culling in

5km radius around

case

- Pre-emptive culling in

1km radius around case.

- Destruction of products

and materials

- Pre-emptive culling in

1km radius around case

- Destruction of products

and materials

- Stamping out in the

affected premises,

with 75%

compensation

Movement

restrictions

- 50km radius around

infected areas

- 5km radius around

infected areas

- Sampling before

movements

- 10km radius around

infected areas

- Movement of ducks

restricted in 3 provinces

- Quarantines, zoning

and movement

control inside the

province/regions.

Hygiene - Thorough disinfection

of affected premises,

all infected and

contaminated

materials in risk areas

- Registration of fighting

cocks

- Ban on exhibition and

cockfighting

- Thorough disinfection of

affected premises, all

infected and

contaminated materials in

risk areas

- Free-ranging ducks

activities forbidden;

dipping/spraying of

incoming vehicle tires

Source: Compiled by authors based on OIE, 2006, Tiensin et al. 2007 and Kasemsuwan, 2008.

*Note: clinical signs are severe respiratory signs, with excessively watery eyes and sinusitis, cyanosis of the combs, wattle

and shanks, oedema of the head, ruffled feathers with diarrhoea and nervous system disruption signs.

Figure 29. Group of provinces with free-grazing duck movement restrictions in 2005.

Source: (Tiensin et al. 2007)


32

Surveillance

The surveillance system in Thailand since 2004 included active disease scanning and targeted

surveillance of risk and non-risk areas (Kasemsuwan, 2008 and Tiensin et al., 2007). The scanning

surveillance consisted in reporting outbreaks from stakeholders from the field, whereas the targeted

surveillance aimed at visiting villages to detect the presence of infection and to cull without delay

when infection was present.

DLD also implemented also targeted surveillance surveys, called X-ray surveys (Figure 30). The first

one was implemented in October 2004 (Tiensin et al., 2007). The objective was to detect infection in

all villages in Thailand and to cull positive flocks according to the official running case definition. The

X-ray surveys continued in 2005 (February, July and October), 2006 (February, June and September),

and 2007 (January and June).

National veterinary service screening procedures included cloacal and nasal swab sampling in a 5-km

radius zone around the infected poultry (native chickens, ducks, broilers, layers and quails) farms.

Also, starting in mid 2006, the following day on which disinfection of the affected premises was

completed; an active clinical surveillance in a 10-km radius zone was performed, coupled with a ban

on the movement of poultry for a period of 30 days (OIE, 2006).

Impact mitigation measures

In Thailand, according to the Animal Epidemic Act, farmers are entitled to compensation of 75

percent of the value of productive assets destroyed. Complete compensation was provided during

initial outbreaks because the epidemic was widespread and devastating, but later, compensation

payments were reduced to 75 percent as the magnitude of outbreaks and radius of the culling zone

was reduced.

Compensation per bird ranged from US$0.38 to US$65, depending on the type of poultry (for

example, US$0.38 for quail; US$1.13 for broiler; US$2 for meat duck; US$2.25 for backyard chicken;

US$3.5 for layer chicken, layer duck, or goose; US$7.25 for turkey; and US$65 for ostrich).

Additionally, the government provided free-range duck raisers with soft loans at 2 percent interest

rates to help them in two ways: recover from productive asset losses and to relocate their

production units (and their homes with it) outside of populated urban centres (Sriboonsue, 2006).

Overall, the government allocated a budget of US$130 million for mitigation measures. All costs

incurred for implementing basic measures (i.e. transportation, surveillance and monitoring costs,

extra salaries and wages, safety equipment and inputs) were assumed at government expense

(Tiensin et al., 2005).


33

Figure 30. Number of H5N1 outbreaks per day, control measures and x-ray surveys [ ] implemented by DLD in Thailand since 2004.


0

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Culling 5km radius - Culling 1km radius - Destruction products & materials

Movement restriction 50km radius Movement restriction 5km

Movement restriction 10km radius

Movement restriction free-grazing ducks

- Culling 1km radius - Destruction products & materials

Ban free-grazing ducks

Ban on cockfighting


34

Economic and Social Impacts of HPAI and Control Measures

Quantification of the impacts of avian influenza (and of other epidemic diseases) is complicated by

the fact that direct impacts on livestock producers will propagate upstream and downstream through

related supply and distribution networks, that short-term reactions are likely to be followed by

longer-term adjustments, that impacts include direct cost elements and revenue foregone, and that

losses to the poultry sector will, at least to some extent, be ‘externalized’ on the one hand and, on

the other hand, be compensated for by gains in other livestock sub-sectors.

Immediate Impacts through Mortality and Public Intervention

The most immediately deleterious impact of HPAI to livestock producers is the loss of their

productive assets, which can be caused either by the disease itself or by government-mandated

stamping out measures. Table 9 below shows that in Thailand, between 2004 and 2006, almost 64

million birds were culled in an attempt to curb disease spread. More specifically, 63 million or 98

percent of all bird deaths occurred in 2004 during the first and second epidemic waves.

Table 9. Number of poultry culled in Thailand, 2004-2006.

Year Number of birds culled

2004 63,000,000

2005 450,000

2006 320,000 Source: Thai Broiler Processing Exporters Association, 2007.

The Thai Department of Livestock Development calculated that US$ 12.5 million and US$ 26.0 million

were spent in the first and second wave respectively for cleaning and disinfection, surveillance,

movement control and public awareness campaigns (DLD, 2004).

Immediate Direct Impacts through Consumer and Market Reactions

Disease impacts arise through market reactions, which can be particularly severe on the demand-side

in the case of diseases that are associated with a public health risks. International markets also react

very swiftly to outbreaks of reportable zoonotic diseases, which are of particular relevance to highly

export-oriented sectors, such as the Thai poultry sector.

Domestic market reactions

With the announcement of HPAI in Thailand, consumers where immediately reluctant to buy and

consume poultry meats and eggs due to fears of contracting disease, leading to dramatically reduced

demand for poultry products and increased demand for alternative meats. As a result prices for

poultry meats and eggs decreased and conversely, sales and prices for alternative meats increased.

Also, demand for alternative protein sources, that is, legumes and nuts, rose. Because live poultry

markets were deemed unsafe, many people avoided them, thus causing reduced traffic flows and

reduced sales of non-agricultural products in market stands that contribute to a significant

proportion of retailers’ revenues (NaRanong, 1999; McLeod et al., 2006).

International market reactions

Immediately after HPAI was officially declared in Thailand, Thailand's two largest importers of

chicken products, namely Japan and the EU, imposed an import ban on fresh-frozen poultry. Raw and

frozen chicken exports to the EU dropped from a high of 98,686 tons in 2001 to 11,027 tonnes in


35

2004. Similarly, in other countries, exports reached a high of 8,927 tonnes in 2003 but dropped to a

mere 457 tonnes in 2004 (see Annex 4). In terms of financial losses, this ban reduced frozen chicken

meat export earnings to very low levels of US$44.4 million in 2004, US$13.7 million in 2005 and

US$15.8 million in 2006 from US$597.2 million in 2003 (calculated using data from Annex 5).

As a result, a number of poultry exporters went out of business: before the HPAI outbreak 22 chicken

exporters were operating while in early 2005 less than 10 exporters were still in business, all of which

are large-scale integrators (Poapongsakorn, 2005).

Overall, export bans imposed on Asian AI-infected countries reduced the global supply of poultry

products and contributed to a nearly 15% increase in international poultry prices. Also, HPAI

outbreaks had a moderate impact on U.S. exports of feed ingredients (i.e. soybeans and soybean

meal) to SE Asia and China (Monke, 2004).

Short-term Flow-on Impacts

The indirect impacts that HPAI and the consequential animal losses have on related industries is

much more complicated to quantify because these shock waves propagate upstream and

downstream through related supply mazes and distribution networks. A report from the Thai Broiler

Processing Exporters Association estimates that the total damage to the entire interrelated private

poultry sector was almost 100 billion Baht (roughly US$ 3 billion) in 2004 alone (NaRanong, 2007).

Table 10 presents estimates of the HPAI-related losses to various actors in the Thai poultry value

chain as estimated by the Thai Broiler Processing and Exporters Association. These estimates

consider some of the up- and downstream impacts of HPAI in the poultry sector, i.e. from feed

producers to poultry exporters, but do not include ‘horizontal’ impacts on other sectors and

industries, such as the finance sector or transportation, etc.

Table 10. Estimated HPAI-related losses to the poultry industry, Thailand, 2004.

Description Losses (in million Baht)

Hatchery Farms 4,420

Feed Mills 12,430

Broiler Farms 27,950

Slaughterhouses 28,400

Exporting entities 23,700

Total 96,900 Source: Thai Broiler Processing Exporters Association, 2005.

As of mid 2004, the HPAI epidemic had an estimated overall impact of a 0.4 percent reduction on the

national gross domestic product of Thailand. This loss would amount to approximately 27 billion Thai

Baht (US$818 million) and excludes the longer term, non-accountable impacts on society and other

shocks related to health and nutrition (NaRanong, 2007; Rushton et al., 2005).

Medium- to Long-term Impacts and Adjustments

Thailand is probably one of the HPAI affected countries which have put the largest efforts into the

elimination of infection and in which - as a consequence - disease has induced the largest structural

changes. Most of these changes are unlikely to be reversed.

The largely mobile free-grazing duck system was prohibited and the duck owners (app. 3,000) had to

register and convert to a housed production system. Chicken farmers that have open poultry houses


36

are not allowed to restock with DOCs unless they upgrade to closed housing types, which requires a

major up-front investment. Large poultry companies which contracted poultry production to

individual farmers prior to HPAI have moved away from contract farming to full vertical integration in

order to increase control over all stages of production. These measures lead to further concentration

of poultry production, and a telephone survey carried out in 2007, in which farmers known to have

produced broilers in 2003 were asked whether they were still in the business, found that 29 percent

of the farmers that could still be contacted (49%), had given up broiler production. A similar survey

among farmers that had kept layers in 2003 revealed that 44 percent had switched to other activities

(NaRanong, 2007).

The HPAI crisis also accelerated the shift of poultry exports from unprocessed frozen poultry to pre-

cooked (or ‘prepared’) poultry meats. Rather than being reversed, this trend is likely to continue and

large integrated poultry producers will probably incorporate or expand food processing capacities in

their operations to rip as much profit possible.


37

Conclusions

Despite temporary setbacks (Asian financial crisis, 1997 and Tsunami, 2004) Thailand’s economy has

grown steadily over the past decades. An economy that used to be agriculture-based is now one that

is mainly industrial and service-oriented. Nevertheless, agricultures’ contribution to economic

wellbeing is significant because it ensures food security to a dynamic workforce, while also

contributing to exports. Livestock, particularly poultry, as well as aquaculture (fish and shrimps), have

the potential to both, contribute to poverty alleviation and become an important tool for rural

development. For emerging economies like Thailand, agriculture will remain important because it

provides food and raw materials for manufacturing industries, is a source of income, and an

important occupation in rural areas.

Thailand’s poultry industry is modern and dynamic, playing an important role in Thailand’s economy

(≈6% of agricultural GDP). The CP group, an agribusiness conglomerate, is undeniably Thailand’s most

important poultry sector stakeholder. Poultry numbers have grown steadily from 1997 until 2003, at

an annual rate of 6.5 percent. Thailand is the world’s 5th exporter of poultry. However, the industry

was hard hit by outbreaks of highly pathogenic avian influenza between 2004 and 2007, which not

only caused animal losses but also started a global scare that resulted in import bans and other

measures that restricted trade in poultry and poultry products.

There are many reasons for the success of the industrial poultry sector in Thailand. Gradual changes

meant that firms built up the human capital necessary to stay competitive. Moreover, with the

logical succession of progressions, growth remained balanced without any one of the poultry sub-

sectors lagging behind (Farrelly, 1996). While the government has played a limited role in actively

promoting chicken production (does not have price supports or export subsidy programs for poultry),

it has supported its growth: a strict control of import permits, high import tariffs, import permit fees

on uncooked products, low taxation of exports and the provision of incentives for quality control

services and research have played an important role in the development of the commercial sector

(Costales et al, 2005).

There have been many benefits of industrial poultry sector development. As a result of increased

scale and integration, average cost of production has greatly reduced thereby decreasing the price of

chicken meat for Thai consumers. Consequently, chicken has become the most affordable source of

meat protein in Thailand and consumption has increased accordingly from 3 to 14 kilograms per

person per year between 1961 and 2002. In addition, employment in the industrial poultry sector has

increased from 52,460 people in 1980 to 110,000 people in 2000 (Poapongsakorn, 2005). Moreover,

the low cost of chicken meat means that selling cooked food with chicken inputs at informal street

booths is a viable employment opportunity for disadvantaged groups and a source of inexpensive

meals for many low-income workers (Poapongsakorn, 2005).

However, despite the many benefits, experience from other countries with highly industrialized

poultry production systems demonstrate that there are some disadvantages to such production

systems. Leibler et al (2008) suggest that in the U.S. poultry sector, low costs for poultry meat mask

significant externalities associated with industrial food animal production, which may have dramatic

impacts on public health. Among these externalities are the increased risk of disease spread from

animals to humans (especially antibiotic resistant bacteria) and environmental hazards stemming

from the disposal of large volumes of animal waste. High density of poultry production intensifies the

impacts of these exposures that could result in unintended detrimental consequences for societies.


38

HPAI was first officially reported in Thailand in a layer farm on January 23, 2004. Four separate

epidemic waves swept through Thailand, the second lasting from July 2004 to March 2005, this being

the most damaging. Roughly 2,000 outbreaks have been reported in poultry between 2004 and 2008,

which resulted in the death of more than 60 million birds, through disease or culling, in 2004 alone.

The Thai government implemented various animal health measures to halt disease dispersion, which

included: compensation-based culling, poultry movement controls, fighting cock registration and

public awareness-raising. The Thai animal health authorities adapted disease control measures to the

prevailing situation but vaccination was not implemented. Most HPAI outbreaks were recorded in

backyard operations, but this was due to their widespread presence (≈70% of all flocks) rather than

to their intrinsic risk of infection. In fact, during three episodic waves analysed, the risk of HPAI was

consistently lower in backyard and duck/geese flocks compared to layer, broiler and quail flocks.

Whether backyard or industrial farms are far more risky in terms of spreading disease, particularly

HPAI, is a contentious issue. Large farms take extensive precautions to prevent diseases, but raise

susceptible birds at very high densities. In addition, large farms have a much higher potential to

spread diseases over greater distances. Smallholders generally take fewer precautions to prevent

disease but the native breeds raised are comparatively more disease resistant, are kept in open

spaces, and, given the localized supply chain, smallholders are unlikely to spread diseases over large

distances. Ideally, both production systems will continue to exist and flourish while mitigating

disease risks as much as possible. Twenty five humans cases have been recorded in Thailand

between January 2004 and September 2006, and a good number of these were young males that

either tended care to poultry or played with them at home. Seventeen of the affected humans died.

Compared to the total number of cases in Viet Nam (106) and Indonesia (137), Thailand seems to

have had a lower human health burden despite the high number of outbreaks recorded in poultry.

Consumers’ perceptions of food/poultry quality are continuously evolving and producers must adapt

to these perceptions (Costales et al, 2005). These adaptations in turn influence which supply models

are utilized. Most recently, the industry has adapted to the HPAI outbreaks by exerting increasing

control over every stage of production and emphasizing their safety standards in their products and

marketing campaigns. Some of the most pervasive responses seen are: faster reactions to shifts in

domestic markets, pressure to further increase feed productivity, decreases in transaction costs, and

improved scheduling of outputs in order to succeed in an extremely competitive industry. As a result,

it is difficult for many independent commercial farmers to participate in the poultry sub-sector due

to the increasingly difficult requirements set by the industry for intensive broiler production

(NaRanong, 2007; Costales et al, 2005). For example, high fixed costs for processing, controlled

primarily by the integrators, are entry barriers discouraging participation of independent farms.

Moreover, there are obstacles to entering into contracts with integrators. The high costs required to

build the necessary production infrastructure, and difficulties in securing loans without collateral,

make it unlikely that low- and medium-income households would be able to enter into the growing

stages of industrial poultry production. Even farmers that presently have contracts may experience

difficulties adapting to the current hyper-competitive conditions, especially if they are required to

make expensive upgrades to farm infrastructure.

Because Thailand has a flexible infrastructure for poultry production in place it seems likely that the

Thai poultry industry will remain an active player in the regional and international poultry markets by

achieving further cost reductions, ensuring market access and promoting product specialization. It

has now become clear to Thai poultry entrepreneurs that poultry diseases can and do have impacts

beyond local farm economics, thus, it is in their best interest to embrace comprehensive poultry

health programmes and food safety certification schemes if they intend to remain competitive, and

profitable, in the foreseeable future. Early this year (late January 2008) two separate outbreaks

occurred in Thailand which highlights the need to continue ongoing efforts in disease surveillance,

live bird market monitoring and awareness-raising campaigns in rural and urban areas.


39

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41

Annexes

Annex 1. Number of holdings rearing chickens, ducks and geese, and number of livestock heads by kind of breeding,

and number of livestock by holding for 1993 and 2003 taken from the Agricultural Census - Thailand.

1993

Chicken Ducks Goose

Number of heads Number of heads Holding size

class No. of holdings Total Layers Broilers Native Breeds

No. of holdings Total Layers Broilers

No. of holdings No. of

heads

1 to 19 1,681,300 14,170,942 145,222 228,319 13,797,401 716,327 4,459,473 2,359,772 2,099,701 29,081 115,173

20 to 99 863,809 26,201,585 368,816 494,451 25,338,318 79,083 2,375,923 1,170,178 1,205,745 959 29,490

100 to 499 53,064 7,435,997 860,693 937,310 5,637,994 9,838 1,705,833 1,153,356 552,477 167 31,865

500 to 999 3,861 2,380,482 768,119 925,821 686,542 1,276 790,574 581,628 208,946 74 46,890

1,000 to 4,999 9,491 22,793,596 4,447,281 18,286,871 59,444 2,781 5,865,115 2,895,474 2,969,641 125 216,386

5,000 to 9,999 3,551 22,306,491 2,896,318 19,398,236 11,937 371 2,264,505 1,021,840 1,242,665 7 47,118

> 10,000 2,336 59,632,837 14,165,823 45,461,938 5,076 156 2,998,380 1,320,580 1,677,800 0 0

Total 2,617,412 154,921,930 23,652,272 85,732,946 45,536,712 809,832 20,459,803 10,502,828 9,956,975 30,413 486,922

2003

Chicken Ducks Goose

Number of heads Number of heads Holding size

class No. of holdings Total Layers Broilers Native Breeds

No. of holdings Total Layers Broilers

No. of holdings No. of

heads

1 to 19 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a




1,000 to 4,999 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

5,000 to 9,999 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

> 10,000 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Total n/a 252,718,883 24,312,523 165,314,786 63,091,574 n/a 23,800,092 8,878,593 8,771,348 n/a 308,667

Source: DLC – MAC, 2008 and http://www.dld.go.th/webenglish/table3.html

Note: Changes in data collection procedures and data presentation formats have occurred between 1993 and 2003 Agricultural censuses

n/a: not available

42

Annex 2. Poultry Populations (heads) in Thailand 2003 - 2007.

Year Egg Duck Meat Duck Muscovy Laying-Hen Broiler Native Chicken Ostrich Quail Goose

2003

8,878,593

8,771,348

6,150,151

24,312,523

165,314,786

63,091,574

15,947

3,692,803

308,667

2004

6,533,878

4,920,906

4,193,754

20,864,273

102,680,366

56,194,171

25,600

3,372,042

267,961

2005

10,592,280

6,499,235

4,448,830

41,210,154

147,674,157

65,319,757

18,112

3,204,935

230,907

2006

11,082,398

6,531,166

3,229,989

29,623,664

100,489,670

54,213,418

5,570

3,943,085

155,737

2007

11,200,143

10,147,336

3,605,350

49,437,136

170,300,977

63,388,159

17,451

5,296,055

176,496

Total

48,287,292

36,869,991

21,628,074

165,447,750

686,459,956

302,207,079

82,680

22,508,920

1,139,768 Source: DLC – MAC, 2008.


43

Annex 3. Export and Import Quantities and Values in Thailand

STATISTICS OF IMPORT / EXPORT FOR BROILERS

Broiler Chicken Meat Meat Products

Import Export Import Export Import Export Year

Quantity

(heads)

Value

(Million

Baht)

Quantity

(heads)

Value

(Million

Baht)

Quantity

(Kgs)

Value

(Million

Baht)

Quantity

(Kgs)

Value

Million

Baht)

Quantity

(Kgs)

Value

(Million

Baht)

Quantity

(Kgs)

Value

(Million

Baht)

2003 2,752,612 699.2 4,954,991 101.5 - - 331,044,896 22,685.9 - - 192,089,974 22,108.9

2004 1,588,019 284.2 140,100 1.1 - - - - - - - -

2005 2,736,513 631.2 243,330 6.7 - - 64,530 2.1 - - 263,418,946 31,550.8

2006 1,227,100 377.8 293,320 4.8 - - 2,285,453 95.6 - - 270,345,449 32,074.6 Source: DLC – MAC, 2008.

STATISTICS OF IMPORT / EXPORT FOR LAYERS

Layers Hen Eggs

Import Export Import Export Year

Quantity

(head)

Value

(Baht)

Quantity

(head)

Value

(Baht)

Quantity

Value

(Baht)

Quantity

Value

(Baht)

2003 250,820 69,769,206 1,023,301 43,321,238 71,360 3,687,828 207,597,732 346,611,187

2004 676,448 111,531,779 31,564 1,361,876 - - - -

2005 250,305 66,138,021 75,670 1,707,475 1,397,484 67,534,595 110,299,203 179,810,476

2006 277,491 70,954,862 24,000 1,135,500 15,550,595 45,981,431 183,747,098 274,186,696

Source: DLC – MAC, 2008.

44

STATISTICS OF IMPORT / EXPORT FOR DUCKS

Ducks Duck Meat Duck Meat from Product

Import Export Import Export Import Export Year

Quantity

(head)

Value

(Million

Baht)

Quantity

(head)

Value

(Million

Baht)

Quantity

(kg)

Value

(Million

Baht)

Quantity

(kg)

Value

(Million

Baht)

Quantity

(kg)

Value

(Million

Baht)

Quantity

(kg)

Value

(Million

Baht)

2003 67,509 31.1 465,914 19.2 - - 5,246,441 474.9 - - 13,741,059 1,721.0

2004 36,916 18.3 - - - - - - - - - -

2005 40,189 2.2 - - - - 161,680 4.1 - - 6,526,312 1,536.7

2006 46,230 22.8 - - - - 483,410 8.8 - - 6,753,975 1,633.2

Source: DLC – MAC, 2008.


45

Annex 4. Thailand’s major export markets for frozen and prepared poultry products. (A) Frozen poultry

Countries 2001 2002 2003 2004 2005/06/07

EU 98,686 79,370 98,231 11,027 -

Germany 49,110 49,110 59,308 5,496 -

Netherlands 25,632 25,632 21,784 2,978 -

United Kingdom 20,648 20,648 15,890 1,494 -

Japan 162,131 193,919 188,101 9,706 -

Korea, Republic of 26,777 32,945 41,720 2,897 -

China 12,172 10,642 21,487 603 -

Malaysia 6,612 8,176 14,082 637 -

Singapore 8,951 7,308 10,670 576 -

Hong Kong 4,288 2,967 5,695 234 -

Others 3,718 8,927 457 -

Total 320,779 339,045 388,913 26,137 -

% change 30.40 5.69 14.71 -93.28 -

(A)

(B) Prepared poultry

Countries 2001 2002 2003 2004 2005 2006

EU 49,840 49,840 61,628 76,050 113,096 127,601

United Kingdom 20,713 28,723 32,132 42,222 69,707 82,883

Netherlands 24,450 14,956 17,676 19,093 23,818 23,680

Germany 3,908 2,995 5,862 8,915 9,751 10,806

Belgium 400 1,331 876 666 1,415 1,175

France 224 1,424 2,076 604 587 266

Japan 52,489 66,162 84,066 102,610 149,079 148,559

Singapore 7,403 4,380 4,698 5,185 5,398 7,017

Korea, Republic of 3,307 2,311 1,832 5,510 3,553 2,821

Hong Kong 3,495 2,672 3,484 3,329 3,493 3,380

Malaysia 7 - 34 - - -

Others 477 2,233 1,332 1,130 1,819 2,348

Total 117,018 127,598 157,074 193,814 276,438 291,726

% change 34.81 9.04 23.10 23.39 42.63 5.53

Source: Department of Customs, Ministry of Commerce, Thailand, 2007.

46

Annex 5. Thailand’s broiler export quantities and prices (frozen and precooked), 1992-2006.

Export Quantity (tons) Average Export Price per

ton (US $) Year

Frozen Precooked Frozen Precooked

Price ratio

(precooked:

frozen)

1992 174,825 2,351

1993 157,086 2,244

1994 153,033 15,996 2,573 4,621 1.80

1995 149,935 22,124 2,598 5,628 2.17

1996 137,176 31,555 2,625 4,236 1.61

1997 150,775 41,114 2,357 3,909 1.66

1998 212,497 60,943 1,906 3,604 1.89

1999 217,720 65,074 1,853 2,403 1.30

2000 240,938 88,575 1,637 2,485 1.52

2001 309,516 116,650 1,745 2,234 1.28

2002 303,966 127,974 1,758 2,396 1.36

2003 331,045 154,464 1,804 2,446 1.36

2004 3,954 193,767 1,854 2,670 1.44

2005 4,534 263,419 3,022 2,592 0.86

2006 8,036 270,345 1,966 2,802 1.43 Source: Department of Business Economics, Ministry of Commerce and Thai Broiler Processing Export Association.

Documents

Poultry, HPAI and Livelihoods in Thailand – A Review