Despite govt’s intervention, why are Kerala traders still selling chicken at 'higher' price?

The govt's directive was to sell chicken at Rs 87 per kilo but traders continue to sell it at Rs 115 per kilo.
Despite govt’s intervention, why are Kerala traders still selling chicken at 'higher' price?
Despite govt’s intervention, why are Kerala traders still selling chicken at 'higher' price?
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In a classic case of government intervention failing to control the prices of chicken, most traders in Kerala continue to sell it at the old prices.

The chicken shops in Kerala had downed shutters from July 10, owing to the government’s directive to sell live chicken at Rs 87 per kilo. Most of the traders in the state opted to abstain from selling chicken as they found the government ruling unviable. 

But on July 11 at a press meet in Kozhikode, following a discussion with the traders, finance minister Thomas Isaac had said that the traders have ended their protest and live chicken will be available in the market at Rs. 87 per kilo. But most of the traders turned a blind eye to this and continued selling at the old rates.

The traders in the state reiterated their stand that selling chicken at that price is not practical for them. “Following the government direction is not viable. We still sell chicken at Rs 115 per kilogram. Slashing the price below hundred is not possible,” said a poultry trader in Thiruvananthapuram.

“What the minister claimed was wrong. It is a misconception that we are selling chicken at the price of Rs 87,” said another trader who runs a chicken shop on the outskirts of the city. 

There used to be a tax of 14.5% on sale of chicken in the state, however after GST came into effect, this tax was subsumed under it. Now, there is no tax applicable on the sale of chicken since it comes under the zero tax category. But even after the removal of taxes post GST, the traders were not willing to cut down the price owing to which the government was forced to intervene. The price till the first week of July was Rs 157 per kilo. But traders argue that since chicken is imported from other states, the price can't be reduced simply because there is no GST on chicken in the state. 

“Kerala was the only state in which there was tax on chicken. The traders in Kerala mostly import chicken from Tamil Nadu. The chicken grown in the state is not sufficient to meet the demands of the state. We don’t have parent farms. There is only one in Thiruvananthapuram under Kerala State Poultry Corporation (Kepco). The eggs we get from the farm are 3,000 per day. We buy chicks for Rs 45, then there is transportation, food and medicine costs. We can’t insist on traders to sell at the price decided by the government,” said M Abdul Jabbar, state secretary, Poultry Farmers and Traders Association.

The traders also allege that the Kerala State Poultry Development Corporation is betraying customers by selling chicken at almost the same price as that of the traders in the open market.

Kumar, a wholesale trader at Vallakkadav in Thiruvananthapuram, said, "Kepco is also selling chicken at Rs 150 per kilo. They sell chicken with skin. When the skin is removed, there is only 800 gram meat." 

If the traders’ claims are to be believed, chicken trade is a profitable business for the government as well. “In 2016, the tax paid on the sale of chicken amounted to Rs 3,600 crore. In a day, five lakh chicken are being sold in the state. The tax revenues from the trade amount to Rs 300 crore in a day,” said Abdul Jabbar.

There are as many as two lakh people including farmers, traders and cutting workers, who are engaged in chicken trade in the state. 

Kerala has the highest consumption of chicken in the country and this works in favour of the traders. “When the national per capita consumption of chicken was eight kilos, in Kerala it was 12 kilos. When the national consumption rose to nine kilos, it increased in Kerala to 15 kilos. After the ban on cattle slaughter, the consumption of chicken increased again. At present, it continues to be the most consumed meat in the state", said V Sukumaran Nair Marketing Manager, Kepco.  

Kepco is run by the government for growing, procuring, processing and selling chicken. Kepco has 23 agencies selling chicken out of which 20 are operating in Thiruvananthapuram Corporation area. 

On an average, 1.5 tonnes of chicken is being sold through Kepco outlets. In certain years, the sale has risen to 650 tonnes. Kepco has poultry farms in Thiruvananthapuram and the demand is met from the production there. 

Sukumaran Nair added that since 14.5% tax was waived after GST came into effect, Kepco sales have doubled. 

He firmly denied the allegations by traders that Kepco is selling chicken at a rate of Rs 150 per kilo. "When the traders say that they are selling chicken at Rs 157, it is live chicken, but after the chicken is stripped off its skin, the meat that remains is only 600 gram. But through Kepco, we sell one kilo chicken meat for Rs 150," he said. 

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