Farmers Suffer Losses, Consumers Overcharged, Intermediaries and Traders Profit Amid Price Hikes
Following a review of the news summary, it has been found that poultry industry association raised egg prices four times in the month of Saun (mid-July to mid-August) due to reduced production caused by bird flu infection. Farmers are irate as they fail to recover production costs, while intermediaries and traders have been cartelizing and forcing consumers to pay inflated prices. Consumer rights activists have criticized the lack of legal authority among business associations to set prices and pointed out the government’s inadequate market monitoring.
27 Saun, Kathmandu – Typically, Nepalese reduce consumption of fish and eggs in the Saun month, a period when prices generally tend to fall. However, this time the market scenario is reversed. Since Saun began, prices of eggs and chicken meat have been rising steadily, sparking consumer complaints about the increasing cost of household cooking. While a price increase might suggest farmers are earning better profits, the reality is different: farmers are incurring losses and consumers are receiving no relief as intermediaries and traders manipulate the market to reap excessive profits.
Egg Prices Increased Four Times in Saun
Nepal Layers Poultry Farmers Association has repeatedly raised farm egg prices during Saun. Initially, on 2 Saun, the price per crate was NPR 465 for XL eggs, NPR 450 for large eggs, and NPR 420 for medium eggs. By 26 Saun, the prices had climbed to NPR 560, NPR 545, and NPR 500 respectively. The association claims that the retail price increase is only NPR 25 per egg, yet at retail outlets, prices exceed NPR 30 per egg. Intermediaries and retailers purchase eggs cheaply from farmers without checking sizes, then sell them at much higher prices to consumers.
Price Syndicate in Chicken Meat Market
Chicken meat prices have also risen at least twice. The National Chicken Sales Business Association raised prices on 22 and 26 Saun, increasing live chicken prices from NPR 240 to NPR 250 and wholesale processed chicken meat prices from NPR 330 to NPR 345 per kilogram. Despite this, consumers pay between NPR 380 and NPR 410 per kilogram at retail stores. The price hikes have been attributed to the bird flu outbreak. According to the Department of Livestock Services, in the past four months, bird flu has destroyed 835,563 birds and 1,225,536 eggs.
According to Vinod Pokharel, President of Nepal Layers Poultry Farmers Association, approximately one to 1.2 million egg-laying hens have been lost nationwide due to bird flu, leading to a drop in production amidst rising demand. However, farmers remain in deficit. “The production cost for a crate of eggs is NPR 573, but farmers receive only NPR 545 for large eggs,” Pokharel explains. Poultry entrepreneurs also state that farmers have incurred losses, and poultry houses are currently empty. The government’s ban on importing Indian chicken and eggs has created shortages in the local market. However, claims that feed and raw material prices have increased are said to be unfounded by industry representatives.
Market Dominated by Intermediaries
One businessperson remarked that the chicken and egg market has turned into a situation similar to vegetable markets where farmers sell at low prices, but consumers end up paying excessively high prices. Farmers lack direct market access and are forced to sell at dealer-set prices. There is suspicion cast on associations for their role in enabling the exploitation of both farmers and consumers.
Consumer rights activist Madhav Timilsina stated that business associations lack legal authority to set prices. According to him, current laws do not empower associations to fix prices, and controlling price hikes in the market is the government’s responsibility. He criticized the government’s weak oversight and silence as primary reasons for the ongoing situation. He urged, “Since the prices set by associations are illegal, the government must take immediate control.”
Jairam Mahat, Secretary of Poultry Business Forum Nepal, accused suppliers and intermediaries of exploiting market shortages to deceive both farmers and consumers. Mahat noted that while bird flu caused farmers to incur losses, the government’s failure to ensure cost-based price protection has contributed to the problem.
It is notable that poultry houses affected by bird flu must remain inactive for three months as per regulations. Due to prevailing rains, farmers are reluctant to rear new chicks. Consequently, even though demand typically falls in Saun, improvement in prices is expected ahead of the upcoming Dashain festival.
