SUNS4500 Wednesday 1 September 1999

Sri Lanka: Cheap imports ruin chicken farmers



Colombo, Aug 30 (IPS/Feizal Samath) -- First it was protests by potato farmers. Then came protests from chili and onion producers. Now Sri Lanka's chicken farmers are up in arms against cheap, ruinous imports.

Somapala Perera is a small-time chicken farmer. But unlike his father and grandfather - who were also in the same business - the young lad is struggling to make a living from his farm.

Chicken feed is anything but cheap in Sri Lanka, the farmers complain. "We are hit not only by imports but also by the high cost of inputs and taxes," Perera said.

With Sri Lanka's once-thriving poultry business buckling, farmers, hard put to maintain farmsteads and pay off loans, say they are forced to sell below cost of production.

"There is no question of profits now. It is just a case of keeping the farms afloat," said Dharmadasa Wanasinghe, chairman of the All Island Poultry Association (AIPA), that represents more than 700 small farmers and big producers.

Poultry is a traditional Sri Lankan backyard enterprise.
According to government estimates, there are 75,000 chicken and egg farmers in Sri Lanka with more than 200,000 people directly or indirectly involved in the trade.

Up to 70 percent of Sri Lanka's chicken and eggs comes from small farms but that situation is rapidly changing.

Thousands of small farmers, worried about growing imports of chicken meat and eggs, took to the streets in April demanding that the government ban imports since it was affecting their livelihoods.

Finally, they had some good news.

Two weeks ago, the government said it would permit imports only under license basis and enforce strict quarantine measures for imported chicken and put in place a proper pricing formula for imports.

Dr M. Ramanujam, Secretary to the Ministry of Livestock Development said at a special meeting with poultry farmers two weeks ago, that the measures were operative from the beginning of this month.

Two consignments of chicken meat have, in fact, been held up at customs after the consignees were unable to provide proper documents under the new rules, he said..

Ramanujam said free trade could not be stopped due to the government's liberalisation policies, but noted that imports could be regulated and measures taken to ensure that import prices are not lower than that of local products. "We will take steps to protect local industry but farmers should not be too dependant on tax breaks or low tariffs," he warned.

According to official figures and consumption pattern studies, Sri Lanka has he highest per capita consumption of chicken and eggs in South Asia.

An average Sri Lankan consumes four kg of chicken and 45 eggs per year.

Globalisation, as in many of Sri Lanka's traditional industries, is hurting the poultry industry and threatening to squeeze out small farmers.

In the agriculture sector, potato, onion and chili farmers have been complaining about the influx of cheaper imports from India and Holland.

Local farmers are unable to produce food cheaper than their foreign counterparts and are demanding protection through higher import duties, lower local taxes and reduced tariffs on imported inputs.

Though import of chicken and eggs are marginal and account for just two percent of Sri Lanka's annual consumption needs, it has a chain reaction on prices controlled by a mafia-type trade network.

While there is an import tax of 40 percent on chicken imports, Sri Lankan importers have mastered the art of fiddling with invoices and making imported products look cheaper, AIPA officials say.

Wanasinghe said one importer brought down 14,680 kg of chicken meat in June this year and the invoice listed the CIF (cost, insurance and freight) at just 38 rupees (about 54 US cents) a kg.

The local industry has to battle against such odds. All it takes an importer is a fax machine, small office and a couple of inquiries and the consignment is at his doorstep," Wanasinghe said.

On average about 100,000 to 120,000 kg of chicken is imported into the country every month while local farmers have to struggle to keep up.

AIPA officials say they are not opposed to imports but point out that undervalued invoices and sub-standard goods are the problem. Imports are often of doubtful origin. Chicken imports usually come from Australia, the Netherlands or the US but the real country of origin is kept secret through trans-shipments via Dubai or other ports, AIPA officials said.

Because various diseases could come into the country through meat products, it is vital to know the country of origin, they said adding that Sri Lanka has become the dumping ground for surpluses from other countries.

They also suspect meat from layer chickens, normally sold as pet food, could be finding its way here.