Price soars due to dip in supplies from Tamil Nadu and squeeze in local stock

The cost of live chicken went up by a hefty Rs.50 in the retail market here on Tuesday to touch Rs.125 a kg, the price being immediately propelled by slowing supplies from Tamil Nadu and an equally tight squeeze in local supplies.

Reacting to the issue, the Kerala Hotels and Restaurants’ Association said it was contemplating hiking the price of several dishes, including chicken, on account of the rising price of inputs. The district secretary of the association Nazeer claimed that the high price of chicken was the result of an artificial scarcity.

Since only about 65 to 70 per cent of a live bird can be processed into meat, the effective price of chicken is around Rs.180 a kg and there is more to the price rise than the tightening supplies.

Farmers in Kerala have customarily blamed their counterparts in Tamil Nadu, who they claim are exploiting buyers here by adopting long-term strategies like reduced chick production. But a farmer in Palladam, in Tirupur district of Tamil Nadu, says Kerala buyers are now reluctant to take deliveries because of the 14.5 per cent tax on birds crossing the border.

These disagreements apart, there are serious causes for worry for farmers on both sides of the divide. The rising price of feed, especially on cues from firm maize price and costly electricity and diesel have contributed significantly to the price spiral.

One factor that may have swayed the market this time, said an industry source here, was the decision by the government-owned Meat Products of India (MPI) and Kerala State Poultry Development Corporation (Kepco) to increase the price of chicken by Rs.20 a kg a fortnight ago.

A poultry industry source in Kochi said that suppliers, especially those from the neighbouring State, have been cheered by the MPI and Kepco moves because they take it as a signal for raising prices. Until the price hike, these two organisations were helping keep the price on a leash.

Even during a hefty rise in the chicken price three months ago, these two organisations were able to calm the market in their own little way. But both the organisations said that they had been forced now to raise the price under tough market conditions. In fact, Kepco raised the price of the meat after two years, said its managing director K.N. Naushad Ali. The corporation had also made enquiries if the government would be willing to subsidise chicken production to prevent a price hike as is done in the case of vegetables through Horticorp.

Now, Kepco sells fresh chicken with skin at Rs.155 a kg while its pre-cut variety sells for 165 a kg. This compares well with Rs.180 a kg charged by a leading private brand in the State, said Mr. Ali. Chicken from MPI, which deals in meat and meat products and processes around 2,000 birds a day, sells at Rs.155 a kg after the hike.

Poultry industry sources have blamed government policies for Kerala lagging in poultry meat and bird production. It is estimated that Kerala requires a minimum of 1.5 crore birds (about 20,000 tonnes of meat) a month. The share of local production was only about 18 per cent of the requirement about two years ago. However, Kepco sources said that Kerala was producing around 80 lakh birds a month or about half the actual requirement. Recent programmes under Kepco to encourage local farmers by providing them chicks and feed have shown some results though critics say more can be done. Baiju Kadavan, who leads an ad hoc committee set up by poultry farmers recently to get themselves organised in the State, claims that government agencies had not done their bit for the local poultry farmers.

A recent memorandum by the ad hoc committee requested the government to withdraw the Rs.4 tax on chicks brought from Tamil Nadu. The farmers have also requested the government to raise the tax exemption limit on turnover from the current Rs.10 lakh to Rs.60 lakh a year.

Bringing poultry farming under the category of agricultural activities can bring it a lot of benefits and financial aid from agencies like Nabard, said Mr. Kadavan. Electricity would then be supplied at a concessional rate, he added, pointing out that agriculture was enjoying these facilities.

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