The Poultry Meeting: Life of a Project Manager The meeting is expected to be highly technical in orientation. As such, relevant technical information must be provided by the project manager such as: 1) monthly price levels (even daily), 2) monthly broiler production, 3) seasonal market demand for broiler, 4) operating expenses of broiler producers, 5) potential markets for broilers, and 6) revenue level of broiler producers. These types of information are for consideration in the expected policy formulation of the government. Basically, the government wants to increase broiler production from 11 million to about 50 million birds annually. This is a general response to the findings of the nutrition team. According to the findings, there are severe protein deficiencies in the diets of the poor people.
Hence, the team recommended that broiler production should be rapidly increased to 50 million birds annually in order to meet the nutritional requirements of the population for proteins of animal origin. There are generally three important issues that should be solved in the meeting. The first issue is about the feasibility of the proposed increase of production.
Is the proposed increase possible? Here, the project manager will outline the production capacity of broiler producers. If the proposed increase is found to be infeasible, then a new level of output must be determined. The second issue is related to price and demand. If the supply of broiler is increased threefold in the market, then demand for broiler will increase significantly. The consequence: price for broilers will decrease significantly. Producer surplus will plummet to levels where individual producers of broiler will shift their production to other goods. Does increasing the supply of broilers in the market to 50 million birds reduce its price level? The answer is obvious.
Because broiler is a relatively elastic good, an increase in its supply will drive prices down. The net effect: producers of broiler will be unwilling to supply more broilers in the market. Now, the poultry advisor will give two reasonable solutions to the second issue. The government may either implement a floor price for broilers or subsidize its production.
A floor price will guarantee the production of broilers in given periods of time. Any shift in the demand for broilers will not affect production (since its price is already guaranteed). A general subsidy on broiler production will stimulate production. Here, it may be possible to reach the 50 million target. The amount of subsidy is directly related to the producers’ willingness to increase production. If the government is able to determine the rational amount of subsidy, then it can potentially increase the production of broilers. There are, however, two complications.
First, increased subsidy will mean more costs to the government. And second, the level of increased production may not reflect the amount of subsidy implemented. In short, it may be more rational for the government to engage in broiler production than stimulating an increase of private supply of broilers. The third issue has something to do with the variety of meat produced in the country.
Is it possible to increase the production of other meats to cover the nutritional deficiencies of the poor people? If the production of other meats is relatively cheaper than increasing the production of broiler, then it would be more rational to produce those other meats. These are some of the important points that both the poultry advisor and the project manager should transmit to the government. It is not easy to order a general increase in the production of broilers. There are, of course, complications. A careful analysis of facts presented must be undertaken. Stakeholders must be identified.
Relevant variables must be determined. All these processes must be taken into consideration when formulating public policies.