Sri Lanka’s poultry industry faced a serious situation after India banned maize exports, the All Island Poultry Association (AIPA) said. AIPA Chairman Dr. D.D. Wanasinghe said that if the authorities failed to give a solution the industry would collapse.
Over 50% of the poultry food is maize and the industry depends heavily on Indian maize imports. India banned maize exports from July and today the millers have stocks only for ten days.
We met Ministry officials and they said that the Ministry would discuss the matter with the Indian authorities and try to get some relief, Dr. Wanasinghe said. The total demand for maize in the country is around 200,000 MT a year and the local production is limited to 25,000-30,000 Mt per year.
As maize is used to produce ethanol the price of maize in the world market has increased sharply.
Though there is a huge domestic market there is no attempt to increase production. Today, the Government charges 20% cess on maize imports but this money has never been used to assist farmers to increase production. The tax only benefited the intermediaries.
Dr. Wanasinghe said that the market has just begun to recover from the crisis created after the Consumer Protection Authority (CPA) enforced the maximum retail price for chicken.
In January, the CPA set a maximum retail price of Rs. 300 per kilogram for chicken, below the cost of production, Dr. Wanasinghe said.
After the price control most of the small farmers abandoned production while large-scale farmers limited production and there has been a big shortage of chicken in the market since January this year.
After lengthy discussions with the CPA, the authorities, agreed to increase the maximum price of chicken to Rs. 320 per kg from July 1.
However, the price is still at break even and for the business to be profitable the price should be Rs. 350 per Kg. The price of maize increased by 12% from July 1 and the industry is again getting deeper into the crisis. However, after the CPA revised the price there is progress in the market as farmers resumed chicken raring.
Dr. Wanasinghe said the CPA should be flexible and the authorities should help the industry to sustain this progress.
The Government could reduce the huge tax it charges at several stages in the chicken production process to make chicken an affordable commodity for consumers, without harming the industry. Today, the Government charges Rs. 55 as VAT per kg of chicken, Dr. Wanasinghe said. ....sunday observer
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