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Excessive Corn Protectionist Policy to Swell Chicken Prices

29 June 2017

SRI LANKA - The authorities’ excessive measure to protect the corn farmers would have a devastating impact on the chicken industry in Sri Lanka, the industry specialists warn.

Sri Lankans rely heavy on chicken to meet their required protein needs and the increase in the prices will limit the consumption of chicken to a large extent, resulting in malnutrition. The annual per capita consumption of chicken in Sri Lanka, which was barely 2.5 kilogrammes a decade ago, has now reached 10.5 kilogrammes and is likely increase further in the near future.

DailyMirror reports that while consumption has risen more than threefold, the prices have remained virtually unchanged during this period in comparison to inflation. The government in a bid to prevent the chicken prices from increasing introduced a control price of Rs.380 per kilogramme and the price remains at Rs.420 per kilogramme even after the control price was removed by the government.

But this situation can change quickly if the authorities continue the policy to protect the corn farmers and levy taxes on corn, which will further increase the corn prices, allege industry sources.

Furthermore, the chicken producers in Sri Lanka have been able to keep the chicken prices at reasonable levels by adopting extremely efficient practices across their production, processing and distribution systems.

They have implemented global best practices in technology and breeding, which have led to more efficient production and significant reduction in costs, which they have passed on to the consumer. Similarly, the chicken producers are heavily taxed by the government, which is as high as Rs.85 per kilogramme.

The total tax income from the chicken industry is colossal. The current corn prices are on the rise and have increased from Rs.42 to Rs.52. This will have a direct impact on the chicken prices resulting in a price hike of at least Rs.20 per kilogramme. This is in the backdrop where the world market prices of corn stand at Rs.35.

The government’s measures to impose a tax of Rs.10.50 per kilogramme of corn will further jeopardize the poultry industry in Sri Lanka. The repercussion of the poultry industry suffering will in turn have a very negative effect on the corn industry, which will lose its market in the face of low demand for corn.

Furthermore, in the wake of the local poultry industry weakening, the government coffers will suffer heavily, losing the Rs.85 per kilogramme tax revenue and will need to import chicken, which will cost the country US $ 20 million per month of foreign currency.

ThePoultrySite News Desk



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