Demonetisation effect: Poultry farmers badly hit, farmgate price falls by close to 40 per cent

Interestingly, farmgate price of poultry have fallen to its lowest since demonetisation was announced.

“Our industry runs purely on cash and demonetisation has hit our business real hard. The demand has come down as families are buying things of utility and items like chicken are luxury. The fact that most of our retailers also deal purely in cash and have limited bank accounts has affected business severely,” Kunal Pathre, owner of Kukoochku Poultry Farm, said.

Chicken is sold at a huge mark up price by retailers. Before demonetisation the cost of chicken across Maharashtra ranged between Rs 120 and Rs 160 per kg. In the last few days the prices have plunged to as low as Rs 80-Rs 120 per kg across the state.

“The demand for chicken generally spikes in winters which leads to an increase in price. However, this time around there have been instances where even retailers have been forced to sell at Rs 70-Rs 80 per kg,” Nazim Sayyed, a poultry retailer in Mumbai, said.

The per kilogram cost of raising a chicken and keeping it in a farm for a period of 45 days ranges between Rs 50 and Rs 60. If a farmer keeps the chicken beyond 45 days in his poultry for over 45 days in the farm, the operation becomes unproductive.

Poultry owners claim that nearly 85 per cent of those who operate retail chicken outlets are Muslims and the penetration of banking activity is less in them.

“A bulk of our buyers are not part of the banking system and rely purely on cash to run their operations. The
demonetisation has hit them really hard causing a severe disruption in their purchasing power,” a poultry farm owner said.

The poultry farm owners, who are now laden with stock, have decided to approach customers on their own by setting up dedicated shops across the state to sell chicken at Rs 100 per kg.

“We already had set up our own shops to ensure that farm owners get better prices. However, in view of the present situation, our association of poultry farm owners has decided to set up retail shops where buyers can get chicken at Rs 100 per kg which would be substantially below the market price,” Pathre said.

Maharashtra sees a consumption of nearly 3.5 crore chicken in a month with a turnover of Rs 800 crore.