After more than a week of disruption in chicken trade over a dispute over increasing minimum price for poultry farmers, supply in the State is stabilising even as chicken price is expected to go up marginally in the coming days.
The poultry farmers, who have a contract with poultry companies as “integrated poultry farmers” had refused to lift new hatchings and had disallowed the companies to lift birds for supply to the market, are demanding an increase in minimum price from around ₹4 to ₹12 a kg. However, after a mediation by the Animal Husbandry Department officials where an interim rise of ₹7.5 per kg was accepted, the supply is being normalised.
A committee comprising breeders, farmers, and officials will now look into enhancement of minimum price. The dispute over the minimum price, which is a sort of compensation for poultry farmers when the food conversion ratio (the weight gained by the chicken against the feed consumed) decreases, arose after a few thousand farmers demanded a stable minimum price. “The minimum price ranges from zero to ₹4 per kg depending on the company, and we have been asking for revision of price, which was fixed more than five years ago. Expenses have gone up for farmers but the price has remained the same,” Bengaluru District Poultry Farmers’ Association president N. Nagaraj said.
In the contract, which is called “integration system”, the company provides chicks, medicines, veterinary services, feed, and buys back the grown bird at an agreed rate while the farmers’ expenses come on the poultry shed, its maintenance, including power and water connections, labour, and heating facility for the chicks among others. While the Karnataka Poultry Farmers’ and Breeders’ Association (KPFBA) maintains that the problem arises when good poultry management practises are not implemented and feed is diverted, farmers argue that climate variation and diseases among others bring down the food conversion ratio (FCR).
“If the FCR is removed for the purpose of paying farmers, then there could be quality issues. The price of chicken is fixed considering the production cost and all other variables. It also works on the basis of price in neighbouring markets. We have to match the rate and it has to be balanced. The price is dynamic in nature in a saturated market,” said Inayath Ulla Khan, Chief Executive Officer of KPFBA. He said practically it is impossible to pay ₹12 per kg as minimum price to farmers.
Manjesh Kumar Jadav, chairman of Broiler Coordination Committee in KPFBA, said the industry works on a very thin margin and makes about ₹1 to ₹1.5 per kg on an yearly average. He further said: “We have not accepted ₹7.5 per kg as minimum price as a permanent feature. It was done to allow lifting of birds. It may come down when the committee sits to decide on the minimum price.”
