The Hindu Business Line : `Duty-free maize imports not to hit farmers'

A few days before Christmas last year, the Union Minister for Agriculture and Food, Mr Sharad Pawar, said the Centre would `seriously consider' allowing duty-free import of maize to meet the requirement of the poultry industry. While, on this, we are yet to hear from the Government, Business Line contacted one of the big players in poultry feed, SKM Animal Feeds and Foods (India) Ltd, Erode. Mr S.K.M. Maeilanandhan, Chairman and Managing Director of the company, answers a few questions about maize and the industry.

What are the main raw materials for the production of poultry and cattle feeds?

Maize, jowar, rice broken, de-oiled rice bran, dry fish, and extraction of soya, groundnut, sunflower, coconut and cottonseed.

From where are these sourced?

Most of the raw materials are procured from various parts of India. Only 30 per cent of maize requirement is met from local production, that is, from Tamil Nadu. Rest of the materials come from neighbouring States, particularly from Karnataka.

How much is the price difference between local and duty-free imported maize?

Generally, we don't see much price difference between local stock and duty-free imported maize as on date. But duty free import of maize will definitely be helpful in meeting the demand of the industry.

If maize price were to change by a rupee, how much will be the effect on the cost of your product?

If maize price is increased by a rupee, certainly it increases feed cost by 60-70 paise.

In case feed prices were to increase owing to high price of maize, would it impact your revenues? Would the feed market look for alternative sources of cheaper feed? From where?

Increase in maize price had severe impact on our revenue, as we were unable to raise price of our finished products, accordingly. Unfortunately, alternative source for maize is limited. Therefore, prices of alternative grains for maize, such as jowar, bajra, and rice broken, would also increase proportionately with the increase in maize price.

Should the feed industry have its own sources of raw materials, through backward integration, contract farming and so on?

The Government should plan a strategy with the feed industry people to facilitate the cultivation of more maize by way of contract farming, by ensuring minimum procurement price.

Do you foresee that allowing duty-free maize import can adversely affect the local farmers?

We don't foresee any adverse effect on local farmers. Because industry demand is huge against local production. We feel that farmers will get good price for their produce, despite import of duty-free maize.

Your view on the announcement by Mr Pawar.

The Government's decision to consider duty-free maize imports to meet the requirement of poultry industry will definitely benefit not only our company, but the industry as a whole. The reason is very simple: Indian supply alone will not meet the demand of the feed industry.

Is the maize production in the country not sufficient for meeting the demand?

Yes, maize production in the country will not meet the demand of the feed industry.

Are there qualitative differences between maize from India and abroad?

We are not sure about qualitative differences.

Will it matter if the imported maize is of the GM (genetically-modified) variety?

Import of GM maize for production of feed alone will not be a matter of concern.

Since maize is a seasonal crop, does the feed industry build stocks when the prices are low or does the industry depend on traders for off-season supply?

As maize is a seasonal crop, generally feed industry people stock maize when the prices are low. But nowadays, traders and people irrelevant to trading or feed manufacturing are also involved in stocking of maize. This also raises the demand for the commodity.

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`Duty-free maize imports not to hit farmers'