Hyderabad: The suggestion of the ministry of external affairs to allow free import of chicken legs from the Unites States in return of Basmati rice, fruits and immigration reforms, as a bilateral investment treaty with the US, is being seen as a threat to the growing Indian poultry industry.
In America, chicken breasts are popular and legs and wings are byproducts. In contrast, Indians love chicken legs.
India and China import chicken legs at 40-80 cents per kg against breast meat, which is sold in the US at $7.9 per kg. The US government is seeking removal of heavy anti-dumping duties of chicken legs to India. The Indian poultry industry thus feels threatened as over five lakh poultry farmers are directly, and many others are indirectly, dependent on the sector.
Telangana state and Andhra Pradesh together form the largest chicken and egg producing area of the country, contributing to 1/3 of the nation’s produce. The two states produce over 7.5 crore eggs per day and over 3.5 crore broiler birds each month.
Currently, the poultry industry in Telangana has its market in Uttar Pradesh, Maharashtra and other neighbouring states, while Andhra Pradesh has its market in Odisha, Bihar and other states.
At the moment, farmers sell each chicken for Rs 78 while retailers sell skinless chicken at Rs 140 per kg.
Members of the poultry industry in Telangana and AP, along with lakhs of farmers, see a direct threat to their growing business. “India is the cheapest chicken and egg producer in the world and it contributes highly to the GDP of the country. In the US, chicken legs and wings are by-products. Importing chicken legs will destroy the domestic poultry industry,” said D. Sudhakar, president of Andhra Pradesh Federation of Poultry.
“The US will start dumping cheap cuts, which will eventually wipe out our small farmers and the industry. It will be a one-directional trade, because these countries will use sanitary and phyto-sanitary rules to bar us from exporting breast meat. Since India is self-sufficient in poultry, there is no need to allow such unfair practices for short-term gains,” said Anil Reddy, senior vice-president of Federation of Andhra Pradesh Chambers and Commerce and Industry (FAPCCI).
Poultry industrialist said such free imports might be temporarily beneficial to consumers, but in the long run there will be no benefits.
“Once they take over our market, and our production infrastructure is destroyed, these multi-national companies will jack up the prices,” said a member of the National Egg Coordination Committee (NECC).
Here is how the economics of chicken leg trade could work: A kilo of chicken drumsticks in the neighbourhood supermarket today sells for at least Rs 200. A kilo of drumsticks from the US would be available in the same supermarket for Rs 110 after adding air freight, import duty of 37 per cent, all taxes and retailer margins. The deal would also affect two crore maize farmers and five lakh soya farmers in India who are directly dependent on the poultry sector.
Meanwhile, the National Egg Coordination Committee said that if the deal goes through, 100 per cent anti-dumping duties (currently, the figure is about 30 per cent) will be imposed to make the chicken market price competitive. To avoid dumping of by-products to trade partner countries through WTO, there is a norm of anti-dumping duty.
