June 27, 2010 (LBO) – A state agency will import chicken to Sri Lanka a media report said, after government price controls created ‘shortages’ and production costs were pushed up by a policy to keep maize prices high.
The Island newspaper quoted D D Wanasinghe, who heads a poultry farmer association as saying that production was now coming back on stream.
“Importing chicken at this juncture will be disastrous as a glut is anticipated by early August with the industry stepping up production to meet the shortage”, the newspaper quoted Wanasinghe as saying.
Analysts say permanently liberalizing imports can be a good policy, if inputs are also freed from taxes, as it will eventually make the entire sector more competitive.
Unlike the rice farming where the government gave a production subsidy in the form of rock bottom fertilizer subsidy, poultry farmer have seen their production cost pushed up by import duties on maize, which is the main import feed.
Unlike rice farmers, poultry farmers have little political clout, and have had to face discriminatory treatment from the state. Maize prices were pushed up through import duties to ‘protect’ farmers when a commodity boom collapsed in late 2008.