CHITWAN, Feb 12: Poultry farmers of Chitwan are facing difficulty to meet their production costs in the face of increasing government tax on poultry feed and involvement of middle-men in pricing eggs.
Arjun Aryal of Khairahani Municipality-1 has been in poultry business for the past 18 years. The seasoned farmer says: "Contemplating the present situation, the return on investment is minimal at best."
Aryal, who has been investing 20 percent of his revenue to expand his business, will probably face a difficult term this year. The condition of other farmers is no different.
Nepal Egg Producers' Association few days ago padlocked Poultry Feed Distribution Centre to protest gradual decline in market price of eggs. After the protest, farmers are getting Rs 245 for a crate of eggs (30 units). Prior to that, they were getting only Rs 230 per crate.
Trilochan Kandel, president of the association, said farmers had to launch protest as the price offered by traders was not meeting even their production cost.
According to farmers, one of the factors that have jacked up their cost of production is the increment in the price of ingredients of feed. The government has raised tax on such products from 1.6 percent to 6.67 percent effective from the beginning of the current fiscal year. Because of the tax hike, a kilogram of corn which was available at around Rs 25 per kg now costs Rs 40-42 per kg.
Concerned by falling egg prices, local farmers held a meeting with egg traders on Saturday. The meeting decided to raise the price of eggs by Rs 15 per crate. Similarly, traders also agreed to inform farmers about market price of eggs through SMS. This decision will give farmers a space to understand the market situation and negotiate a better deal with the suppliers.
According to Kandel, the market price of chick is Rs 170 per head. A chicken consumes about 42 kilograms of feed, which amounts to Rs 2,550, in its lifetime. It lays around 300 eggs during the period. Calculating the return at current price i.e. Rs 8 per unit, revenue generated per chicken is only Rs 2,400. This does not include the cost for medical expenses on chickens as well as the cost to build necessary infrastructures, among others.
"This figure roughly translates to a loss of Rs 2 per egg,” added Kandel.
Consumers pay around Rs 12-15 per egg. This means that the middle-men are taking a huge portion of the profit. The price of eggs increases by 50-87 percent by the time it reaches the end consumers.