Sri Lanka's poultry industry has been hit badly recently by state price controls on chicken and import controls which 'protect' maize farmers but at the expense of chicken farmers. The state has now relaxed its controls on maize after the crisis in the poultry industry developed.
"The main challenge faced by the Company and the Group was the Government’s resistance for price increase as the Government desired to control price of chicken," Yakooth Naleem chief executive of Bairaha Farms, commented in the annual report. "However, after a prolonged delay a satisfactory price increase was eventually granted in February 2010."
The governemt encouraged local cultivation of maize by not allowing imports but this led to a shortage of maize during certain months of the year. This policy was overturned follwing the realisation that there was an acute shortage of maize in the country. A limited quantity of maize was then allowed to be imported under a special permit scheme.
Self service supermarkets in particular, which did not sell at 'blackmarket prices' were frequently out of chicken last year due to price controls.
Bairaha says increased tourist arrivals are now creating more demand for poultry and demand is also coming from the North and the East of the island, after the end of a war.
"It took nearly 10 years for the Sri Lankan Poultry Industry to double its production and consumption, and now with the potential for massive growth, doubling production in a shorter period is not too far away, provided the consumption grows as expected," chairman M T A Furkhan told shareholders.
