Chicken farmers have been squeezed as the government banned the import of maize this week, in view of a bumper harvest, issuing import permits to political surrogates and price controls slapped on chicken.
The government in January banned the import of maize expecting a bumper harvest, but the entire harvest has already been purchased by the intermediaries operating as mafia and they hoard the stocks to manipulate the prices.
“It is a situation similar to what is happening for vegetables in Dambulla. We have already written to the President drawing his attention to this mafia carried out for long, seeking redress for both the maize farmer, poultry farmer and the consumer,” said Mathalee Jayasekara, former Chairman and Advisor of All Island Poultry Association of Sri Lanka.
This week, the Secretary to the President Dr. P.B Jayasundera ordered the Consumer Affairs Authority to immediately launch an investigation to clampdown on a racket by the middlemen to hoard stocks and create an artificial scarcity of maize and thereby obtain extremely high profits by releasing them to the poultry farmers and feed millers in the off season. It has been reported that in the current Maha season, about 70,000 acres of maize was cultivated yielding 300,000 metric tonnes of maize. But none has reached the market yet.
The mafia collectors purchase maize from maize farmers at an average price of Rs.40 per kilogram and is re-sold to the poultry farmers and feed millers at prices ranging from Rs.65 to 85 per kilogram, retaining a mammoth profit.
Jayasekara said his Association even offered to buy directly from the farmer at a rate between Rs.48 to Rs.55 with 14 percent moisture, and they even published advertisements in Sinhala press just two weeks ago.
“They (the intermediaries) had already purchased it all”, he added.
Sri Lanka has an annual maize requirement of 600,000 metric tones, but the local produce meets only 250,000 metric tonnes with the balance 350,000 being imported, mostly from India and Ukraine.
While the poultry feed requirement is around 400,000 metric tonnes, the dairy sector consumes another 200,000 metric tonnes of maize as cattle feed. As small scale poultry farmers are hamstrung to open letters of credit and import large shipments of maize, permits are issued on a selective basis mostly to politically-connected parties. Import duties also push up maize prices.
Those importers also keep a heavy margin when selling maize to poultry farmers squeezing the latter’s margins.
Meanwhile, the Consumer Affairs Authority (CAA) yesterday slapped price controls on chicken to prevent higher prices, which further squeezes the poultry farmers and big producers alike, though the impact is expected to be minimal on the latter.
After the price controls, a kilogram of chicken with skin is sold at Rs.430 from the earlier Rs.475, while skinless chicken is sold at Rs.530 from Rs.600.