After plunging when bird flu hit Thai poultry last year, domestic chicken consumption in the country has grown from just eight kilogrammes per head at the height of the scare to an average of 10.10 kg now.

If there are no further outbreaks of the disease, consumption could return to 13.30kg, the level it was at before the virus was detected in Thailand in early 2004.

Devastated by bird flu last year, the poultry industry now looks to be back on track. Consumption is up and if there are no more outbreaks, exports of raw chicken could resume, providing a muchneeded fillip to the economy by WALAILAK KEERATIPIPATPONG and PHUSADEE ARUNMAS

Although Thailand announced on May 5 that the last farm in Lop Buri province to have reported the disease had been free of the virus after a 21day surveillance period, it could still take the country until around midJuly, or a further 69 days, to make an official declaration that Thai poultry is completely free of avian influenza.

The 69day period is required by the World Organisation for Animal Health, the OIE, for areas where the virus is prone to reappearing.

In Thailand, there are nine such areas on the watchlist _ Ang Thong, Lop Buri, Kamphaeng Phet, Nakhon Sawan, Phichit, Phitsanulok, Sukhothai, Suphan Buri and Uttaradit provinces.

A virusfree declaration would not only bring chicken consumption back to normal but it would also allow the resumption of fresh chicken meat exports, which were banned by major importers from last January.

Furthermore, the news would be positive for the Thai economy, given that the disease outbreak critically damaged the chicken export industry, cutting exports to only 25 billion baht last year.

The president of the Thai Broiler Processing Exporters Association, Anan Sirimongkolkasem, said authorities, private companies and farmers still have to coordinate to prevent a third outbreak of the virus in Thailand.

More open farms such as this one are being transformed into closed systems to reduce the chance of infection.

"We're going to pass the second outbreak which was detected in July of last year, but I still want to see further improvements at the chicken farms," he said.

Bird flu, which swept through 11 countries in Asia, resulted in the culling of more than 120 million fowl and 50 human deaths _ 12 in Thailand, 35 in Vietnam and three in Cambodia.

The Thai government has spent as much as 5.5 billion baht to compensate farmers for culling their poultry and to improve farming methods.

Mr Anan suggested farmers raise their poultry under biosecurity farm standards set by the Livestock Development Department, in which closedsystem farming and fumigation to kill germs are applied at every step of the poultryraising process to reduce the chance of infection.

Around 11,000 farms have so far registered with the department as operating under the biosecurity standard system with the capacity to raise 201 million chickens. Twothirds of the chickens are raised under the closedfarm system.
It costs farmers about 5,000 baht for an area sufficient to raise 1,000 chickens to upgrade farms to the biosecurity system, according to the Livestock Development Department.

However, the upgrades will provide a major boost to Thailand's chicken exports, bringing in at least 30 billion baht this year from over 300,000 tonnes of cooked and semicooked meat, he said.

"The prospects are brighter now given the higher number of processing plants that have applied to be certified for health standards from the major buyers," Mr Anan said.

Japan and the European Union (EU), where up to 90% of Thai chicken exports go, have imposed strict conditions and import meat only from plants that meet their health standards. Respectively, 48 and 60 processing plants in Thailand have now been certified by Japan and the EU.

He said bird flu would cause a sea change in the export strategies for Thai poultry so as to focus more on heattreated products and processed meats.

State agencies and private companies are currently drafting a road map for the Thai chicken industry to lay down stronger foundations to deal with longterm shifts in market strategy.

The road map includes effective management and plans, financial support from the state to increase the number of biosecurity standard farms and processing plants, and targeting an increase in exports to reach 500,000 tonnes in 2008.

A road map is also being drafted for another huge income generator, shrimp, with an export forecast of 430,000 tonnes this year, up from 360,000 tonnes in 2004. Over three years, the volume is hoped to increase to 600,000 tonnes worth about 134 billion baht.

The prospects remain bright in spite of some export hurdles remaining in place, especially the high import tariffs imposed in the two major markets for Thai shrimp _ the EU and the United States.

Thailand has for years urged the EU to reinstate tariff privileges for shrimp under its Generalised System of Preferences (GSP) to boost the competitive edge of Thai shrimp products.

Currently, the EU imposes a 12% tariff on Thai frozen shrimp and a 20% duty on processed shrimp. The GSP rates are expected to come down to 4.2% for frozen shrimp and 7% for processed shrimp.

Shipments of shrimp to the US also face an additional 5.95% antidumping duty after Washington ruled that local exporters had sold frozen and canned warmwater shrimp from Brazil, Ecuador, India, and Thailand in the US at below fair value.

However, after the tsunami, it is likely that the local shrimp industry will be given some relief after the EU and the US pledged to review their policies in favour of Thai shrimp exports.

"I feel the impatience here and, in fact, I have lived with the shrimp [matter] for years. It should not be delayed any longer," said EU Trade Commissioner Peter Mandelson about the GSP to be restored to Thai shrimp as part of EU support for tsunamihit countries.

Mr Mandelson was in Asia in April to visit countries hit by the deadly waves.
Representatives of the US government also paid a visit to affected shrimp sites in Phuket and Phangnga to gather information after the US International Trade Commission agreed to review a decision that allowed penalty tariffs to be imposed on shrimp imports from two countries, Thailand and India, under the changedcircumstances review.

A number of hatcheries in Phuket and Phangnga, the two most affected provinces, were devastated by the deadly waves.

With higher tariffs, it was quite difficult for Thai shrimp to compete in the US and EU markets.	A number of hatcheries in Phuket and Phangnga were devastated by the deadly waves last year.

According to the Thai Shrimp Association report, total damage suffered by Thai shrimpers in Phuket and Phangnga from the Dec 26 tsunami is estimated at 22.5 billion baht, including the loss of property and export opportunities.

The association submitted the report to the US government representatives during their visit to the damaged sites as part of a major push calling for a review of antidumping duties levied on Thai shrimp imports.

Poj Aramwattananont, president of the Thai Frozen Foods Association, conceded that with the higher tariff, it was quite difficult for Thai shrimp to compete in the US and EU markets.

He said the antidumping duty pulled down imports of Thai shrimp to the US in the first quarter by 43% yearonyear to 19 million pounds. Overall Thai shrimp exports plunged 36% to 65 million pounds. Further declines were expected in the second quarter with an uncertain outlook for the rest of the year, Mr Poj said.

Up to 5055% of the total of 240,000 tonnes of shrimp exported last year went to the US and the additional levy could reduce export competitiveness. Worse still, Washington is demanding that US buyers post a bond for imports.

Such a requirement is a burden to importers and several US buyers are expected to back out. Those who continue will ask for a bank guarantee or ask the exporter to contribute to the bond payment.

The requirement will hurt small exporters and Mr Poj suggested the government discuss the issue with Washington quickly to lessen the burden.

"Washington will announce the results by late October after six months of investigation and business sentiment surely depends on the US ruling," Mr Poj said.
If the ruling is negative, he suggested Thai exporters find or enter into business ventures with American firms to import Thai shrimp.

Surapol Pratuangtum, president of the Thai Marine Shrimp Farmers Association, said the lower GSP would provide export opportunities for Thai shrimp to the EU market. He expects the volume to surge to 200,000 tonnes over the next five years, up from only 8,000 tonnes in 2004.

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