The effects of cutting subsidy on broiler production in Kerman province were investigated after privitization. In this regard a random sample of 32 poultry farms in Kerman were chosen and the farmers were interviewed. The unit- output - price profit function model was used to determine the supply and demand elasticity of broider products. The results show that the profit of poultry farms increased after the subsidy were cut. Thus a competitive market increased the productivity of the farms. The demand elasticity for poultry food with regard to its price is high. Most of the raw materials required by such farms are imported, therefore computed elasticity coefficient was useful for making decisions regarding the allotment of foreign exchange to poultry farm. As a results, the government should encourage poultry farmers rather than interfering with the industry.
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