DHAKA, Feb 18 (Reuters) - Bangladesh culled nearly 200,000 chickens overnight in bird-flu affected farms in an effort to contain an outbreak of the disease that now has hit more than two-thirds of the country's districts.

Around 850,000 chickens on 270 farms in 43 districts have been culled following detection of the deadly strain of H5N1 virus in March last year, livestock ministry officials said on Monday.

Officials said the government was taking measures to contain the disease's spread, but ignorance among millions of farmers in the impoverished country remained a stumbling block.

The bird flu scare has seen chicken sales in Bangladesh plummet. Many restaurants have taken chicken off their menus while home consumption has also dropped.

Even some five-star hotels have eliminated chicken dishes due to lack of demand from foreigners.

It is a major blow to the poultry industry, which is worth nearly $1 billion in annual sales. Around 5 million people are involved in poultry farming and many have no other means of earning a living, industry officials say.

In the past six months, nearly 40 percent of Bangladesh's 150,000 poultry farms have closed because of high prices for chicks and feed, even as their selling prices for chickens and eggs fall, poultry owners say.

No human bird flu cases have been reported in Bangladesh, a densely populated nation with millions of fowl kept in backyards, and thousands of chicken farms.

Experts fear the H5N1 strain could mutate or combine with the highly contagious seasonal influenza virus and spark a pandemic, especially in countries such as Bangladesh where people live in close proximity to backyard poultry.

Contact with sick fowl is the most common way of contracting bird flu. The disease has killed more than 220 people worldwide since 2003. (Reporting by Ruma Paul; Editing by Jerry Norton)

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