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Industry in Crisis in Andhra Pradesh

by 5m Editor
29 April 2009, at 10:39a.m.

INDIA - Thousands of smaller poultry meat and egg farmers in the state of Andhra Pradesh have left the business because of continuing high feed costs.

The poultry industry in Andhra Pradesh, one of the biggest in the country, is facing the worst crisis in over 30 years, with thousands of small and marginal farmers shutting shop on account of 'abnormal' increases in input cost, particularly feed, according to The Hindu.

Since last year, there was a 100 per cent rise in feed cost, according to K.V.S. Subba Raju, Hyderabad Zonal Chairman of the National Egg Coordination Committee (NECC).

He told The Hindu that a tonne of soybean meal now costs 25,000 rupees (INR), as against INR 12,5000 to 13,000 in October/November last year. Similarly, a tonne of de-oiled groundnut cake is INR 21,000 to 22,000, in sharp contrast to INR 11,500 in 2008. The maize support price to be paid by a small farmers is now INR 800 after taxes, almost twice as much as the INR 450 to 500 about two years back.

Mr Raju expressed concern over the rising prices of the poultry feed ingredients which was forcing thousands of small/marginal egg and chicken growers to close shop. "The price of feed has become a major factor of daily uncertainty facing the industry in the State, as a result of which units being run by small and marginal are just collapsing, their running having become unviable," he said.

He explained that a farmer had to get INR 60 for a kilo of broiler to break even but the current price is INR 58 per kilo. It is increasingly difficult for small and marginal producers to continue since there was no guarantee of survival. As a consequence, production of both eggs and chicken are down, Mr Raju stated. The current cost of producing an egg by a farmer was INR 2.25, whereas it was being sold for INR 1.76, minus the commission of the middleman.

As a solution to tide over the crisis, he wants the government to ban forwarding trading in maize and soya meal immediately, since it was being indulged in by "speculators who blocked their movement by resorting to hoarding".

He told The Hindu that the government should first consider the country's requirements before allowing export of poultry feed ingredients like maize and soya.