Some Relief Ahead for Nepal's Poultry Farmers

NEPAL - Poultry farmers suffering with the effects of bird flu on their businesses are to get some relief from the banks in terms of low-interest loans.
calendar icon 16 September 2013
clock icon 4 minute read

Bird-flu embattled poultry farmers will get much needed relief as financial institutions have planned to go soft on poultry loans, reports Himalayan Times.

“Though giving financial relief or subsidising the interest or principal is not Nepal Rastra Bank (NRB)’s domain, we have asked financial institutions to consider restructuring poultry loans this time,” said spokesperson for NRB Bhaskar Mani Gyanwali.

Following the outbreak of the avian influenza, the two months of July and August, saw massive culling of chickens and chicks in Kathmandu Valley, Kavre, Chitwan and Hetauda. The authority — Department of Livestock Services — has culled over one million chickens and destroyed 1.2 million eggs to stop the virus from spreading. The move has severely affected poultry businesses which apparently have invested billions of rupees. Insurance policies also do not cover the damages caused by such epidemics like bird flu.

“By how much banks are willing to lower interest rates for these loans depends on the banks themselves, but they will decide on such measures based on borrower’s situation,” he said.

Poultry farmers including representatives of Nepal Poultry Federation, Nepal Hatchery Enterprises Association and Nepal Poultry Traders Association have called on the NRB governor and president of Nepal Bankers’ Association to consider lowering the interest rates for their loans.

“Some of the banks have started to lower about two percentage points in interest rate based on the situation of the farmer and entrepreneur, but we have requested all the banks to help us get out of this trouble,” said first vice president of Nepal Poultry Federation, Narayan Hari Khatri. “The business is facing a loss of Rs7 billion worth of chickens and eggs due to culling,” he said.

Agriculture Development Bank Ltd (ADBL) — the largest agro-based lender — is also preparing a procedure to relax the interest rate for these loans.

“We have yet to decide on the module for providing relief to the farmers and poultry based industries, but troubled loans will be restructured in case of difficulty of payments by the borrowers due to the current situation,” said CEO of ADBL Tej Bahadur Budhathoki. The bank has about two billion rupees financed in the sector.

“But the farmers who are in a difficult situation regarding payback need to first apply at their respective branches and discuss their problems,” he said.

Himalayan Times reports that, according to the Bird Flu Control Directive, as compensation, a farmer gets Rs500 for a full grown chicken, Rs250 for chicken above four weeks, Rs130 for a chicken below four weeks and Rs3 per egg.

“To raise a full grown parent chicken it costs about Rs2,800, so the rate of compensation covers only a fraction of the real expenses. We are all looking into very difficult financial times ahead,” said president of Nepal Hatchery Enterprises Association Shiv Prasad Sharma.

“We have requested all the concerned authorities from the chairman of the interim government Khil Raj Regmi to the division office’s heads of Ministry of Finance, Ministry of Agriculture Development, Ministry of Commerce and Supplies, and Nepal Rastra Bank’s governor requesting them to help us in paying interest for the loans and waive the taxes for a few months, which will be a great relief,” said Sharma.

Further Reading

You can visit the Avian Flu page by clicking here.

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