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| April 10, 2000 | ||
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| POULTRY Drumstick Roll Indian industry lobbies against trade liberalisation that will give American chicken a leg up in the local market By Sumit Mitra
In India, on the other hand, the drumstick is a delicacy, the tangdi kabab being among the choicest barbecued savouries at drink parties. After duty and trade costs, the American drumstick may be priced at around Rs 40 a kg in the Indian stores. "At such a low price," says Shyam Kuldeep Singh, a director of Shivalik Hatcheries, "it will create imbalances in the entire poultry market." Singh's fear is based on the impact of the cheap import of American chicken legs on domestic poultry meat prices, and eventually on the production of table eggs. India produces 700 million kg of poultry meat annually, but its retail price is a steep Rs 70 a kg due to two reasons: the high cost of maize, the main ingredient of chicken feed, and the astronomical trading margin. Chicken growers sell their birds at just over Rs 20 a kg at the wholesale markets, which traders retail at a premium of 150 per cent. The poultry farmers thus work on a wafer-thin margin, which too may disappear in a bad year, like last year, when the price of maize went through its cyclical roof of Rs 8,000 a tonne. It has now stabilised at Rs 6,000, but the price in the US and China, the two largest maize growers, is well below Rs 3,800. The industry is clamouring for protection because, as it says, the 1.5 million people who depend on poultry will become jobless. However, what will also dwindle is the demand for the Indian "pure line" stock and its derivative, the "grandparent" stock. These are distinctive genetic pools created over many years with substantial investments. The commercial chicks sold by the hatcheries to poultry farms bear the hallmark of the pure line. Without such genetic engineering at the source, the progeny of birds suffer from high morbidity and mortality, rendering their farming uneconomic. Anuradha Desai, chief of the National Egg Coordination Committee (NECC), the apex body of the poultry industry, and chairperson of Venkateshwara Hatcheries (which owns Shivalik), is lobbying with the Government for continuance of the QR at least till April 1, 2001. "When the QR is removed, the Government should impose a duty on the leg quarter up to the bound rate of duty of 100 per cent." The "bound rate" is the maximum rate permitted at the Uruguay rounds for GATT members to charge duty. The imported drumstick will hit the Indian chicken hard even at that duty rate, though the impact may be less severe. The hullabaloo over chicken-leg import is typical of second-generation reform which has begun affecting the traditional modes of business. In a year from now, QR will be removed from the remaining 1,429 tariff lines (out of a total 2,714) in conformity with the obligations under WTO. That puts Indian producers of many labour-intensive agro-products -- chicken, eggs, milk, cream, coffee, tea, even rice -- in a price jam. These industries employ too many people and are spread too thinly in small uneconomic units which cannot afford the technological edge that marks farming in the developed world. If the Indian farm sector drops prices, jobs will disappear. If it can't, the economy of scale of agriculture in the West will overwhelm it. |
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 © Living Media India Ltd |
In
liberalising trade, whose interest should come first -- that of the local
producer or the customer? That's a chicken-and-egg situation. Literally. The
chicken lobby in India is up in arms against the decision of the Union
Government to lift the quantitative restriction (QR), any time before April
1 next year, on cuts of the broiler chicken, the species known by its
scientific name, Gallus domesticus. The poultry industry's grouse -- it may
be noticed -- is over unhindered import of the cuts, not the whole bird. In
the US, the main potential exporter country, it is only the breast portion
of the chicken which is accepted by the domestic market, the rest of the
flesh being dumped or sold at a throwaway price. However, the leg quarter of
the chicken, which Americans despise as "dark meat", is offered
for export at the incredibly low price of 17 to 20 cents a pound, or about
Rs 16 a kg.