Why the poultry sector needs a rescue package
The Indian poultry sector is headed for a crisis as rumours and fears associated with novel coronavirus (Covid-19) hit consumption of chicken meat and eggs, resulting in a price crash. That the farmers are incurring a loss of ₹100-130 on every bird (yielding two kg of chicken) reflects the gravity of the situation.
Farmgate prices are ruling at ₹15-35 per kg of live bird in various regions against the production cost of ₹80-85 per kg. As a result, poultry players have started cutting down on the production to trim losses.
The sectoral losses are estimated at ₹1,000 crore a week due to the prevailing situation, industry players said. It is estimated that the sector could have incurred a loss of around ₹7,000 crore after rumours and fake news of chicken being infected with coronavirus began doing the rounds on social media platforms such as WhatsApp and YouTube from mid-January.
Egg producers alone have lost ₹600 crore during February to the coronavirus scare as farmgate prices fell to ₹2.50 a piece against production cost of ₹4. As it is, egg producers are under tremendous stress after losing about ₹4,500 crore in calendar 2019 due to skyrocketing production costs.
Seeking Centre’s help
“It is difficult for the industry to sustain this kind of losses. We have appealed to the Union government to step in and rescue the industry. We have asked them to direct banks to convert working capital loans into term loans and announce a moratorium of two years repayment of existing term loans,” said Suresh Chitturi, Vice-Chairman and Managing Director, Srinivasa Farms, and Chairman of the International Egg Commission.
The woes of poultry players have been compounded by the outbreak of bird flu in Kerala last week, which is seen hurting the sentiment. Although the bird flu outbreak is a local issue, it is seen adding to the current crisis.
“We are under fire,” said B Soundarajan, Chaiman of Suguna Holdings Pvt Ltd, a large poultry player, commenting on the prevailing crisis. “We not be able to say where the industry is headed,” he said adding that Maharashtra, Odisha and Andhra Pradesh were the worst affected.
“The State governments and local health authorities have to step in to allay the fears related to consumption of poultry products,” he adds.
The poultry sector’s annual turnover is pegged at ₹1.2-lakh crore and the industry provides direct and indirect employment to over 2.75 crore people.
Social media rumours
“Numerous rumours that are being circulated in social media about the likely spread of Covid-19 through chicken have created doubts in the minds of chicken eaters. This has resulted in a sharp fall in the consumption,” said Chitturi.
India consumes about 9 crore (broiler) birds and 2.25 crore eggs a week.
The All-India Poultry Breeders’ Association has sent a memorandum to Union Finance Minister Nirmala Sitharaman, appealing to her to release fresh loans to poultry farms and bail them out of the present crisis.
“We request you to exempt Goods and Services Tax on soya seed and soya meal,” Bahadur Ali, Chairman of the association, said in the memorandum.
Maize, soya farmers hit
The poultry industry being the main consumer of soya and maize, the crisis is impacting the farmers growing these two crops as well. Over the past few days, the price of maize has dropped from ₹25 to ₹15 per kg.
Recalling the bird flu crisis of 2016, the poultry industry has called for interest subvention and the sale of maize at ₹4/kg from government stocks.