Poultry industry seeks bailout as prices crash amid Covid-19 fears

With the Covid-19 rumours scaring chicken lovers away, the prices of chicken and eggs have crashed. That poultry farmers are making a loss of ₹100-120 on every bird (yielding 2 kg of chicken) shows the gravity of the problem.

As the prices fall, a good number of poultry industry players are considering cutting down production by 15-20 per cent to prevent further losses. Some of them are even resorting to killing chicks.

The losses for egg farmers due to the coronavirus scare in February alone was estimated at ₹600 crore as farm gate prices fell to ₹2.50 an egg (against the production cost of ₹4).

If the situation continues, the industry fears that the losses could be ₹2,700 crore (including losses due to fall in broiler prices) in March.

Seeking Centre’s help

“It is difficult for them to sustain these kinds of losses,” Suresh Chitturi, Vice-Chairman and Managing Director of Srinivasa Farms, and Chairman of the International Egg Commission (IEC), told BusinessLine. “We have appealed to the Union government to step in and rescue the industry. We asked them to direct the banks to convert working capital loans into term loans and announce a moratorium of two years in repayment of existing term loans.”

As it is, egg farmers are under tremendous stress, as they lost about ₹4,500 crore in calendar 2019 due to sky-rocketing production costs, he added.

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.