Hatcheries creating artificial crisis of plenty

The broiler segment of the poultry industry in Krishna, Guntur, Prakasam and Nellore districts is teetering on the brink of yet another major crisis.

According to P V Ramana, a leading feed supplier and director of Krishna district's biggest chain of retail chicken counters, the crisis is being created by the unhealthy and cut throat competition among the 45 hatcheries in the state.

Speaking to Business Standard, Ramana said, "The hatcheries are trying to create the crisis by producing excess chicks. They have already begun the excess production. This is only a ploy to impose contract farming on the farmers. The broiler farmers in the four districts are already feeling the heat and this crisis may reach its climax by January."

Ramana said that while the daily requirement of chicken meat in Hyderabad has been put at Rs 1.5 lakh birds and that for the rest of the state at 2.5 lakh birds a day, the hatcheries are producing more chicks than required.

"In recent times, the 45 hatcheries have taken sides and two powerful centres have emerged in the poultry industry. The two warring groups are determined to monopolise and control the market all by themselves," he said.

According to Ramana, the two warring groups are led by two leading hatcheries in the state. The two groups have adopted the same tactic of going in for massive production of chicks.

The chicks would be dumped on farmers, who would be bulldozed by further cost escalation. Seventy per cent of the poultry industry is under contract farming, but the farmers of Krishna, Guntur, Prakasam, and Nellore districts are averse to accept contract farming.

So, while staging one upmanship against one another, the companies would strive to tame the farmers through the excess production technique and persuade them to join the contract farming.

He said that the excess chicken production would not reduce the cost of broiler farming for farmers, as they are already reeling under severe cost escalation.

"The farmers will drown in irrecoverable losses. Right from the beginning of this year, prices of feed ingredients such as soyabean, groundnut and maize have been increasing and there seems to be no stopping or climb-down," he said.

"While the farmer has an expenditure of Rs 30 per kg of chick, the rate he gets is between Rs 32 and Rs 33. This has been the break-even point on their income. If excess birds are dumped on the farmers, they may get Rs 30 per kg or sometimes even less than that, which will knock them out of business," he said.

"During the period between November and December last year, hundreds of poultry units were destroyed due to cyclones. No one came to the rescue of the victims. And in March this year, the TV media created a panic among consumers about bird flu. Due to this, the industry lost close to Rs 300 crore. Earlier, Gumboro disease played havoc with the broiler farming and now this excess production might knock out hundreds of farmers from the business," Ramana said.

He appealed to the poultry hatcheries not to go in for excess production now as the farmers have come around in business from May. Any future move should involve all players in the poultry industry, he said.