SRI LANKA – Sri Lanka is navigating rising poultry feed costs, exacerbated by stringent import controls and taxes on maize, which have kept prices for eggs and meat high in a country already grappling with child malnutrition.
The government has implemented a policy favoring domestic maize farmers, a move critics argue disproportionately benefits large-scale producers and intermediaries, dubbed the “maize mafia,” at the expense of small-scale poultry farmers and consumers.
To protect local maize production, the government has imposed a 25-rupee-per-kilo import tax (equivalent to about US$ 86 per tonne) alongside a restrictive licensing system that limits import quantities.
This “license raj” allows license holders to control maize prices even when imports are permitted.
Minister Vijitha Herath explained that while Sri Lanka has allowed the import of 300,000 tonnes of maize this year due to low harvests in the Yala season, the quota-based system has kept prices elevated.
The current domestic maize price is approximately 160 rupees per kilo (US$547 per tonne), well above the import cost of 110 rupees per kilo (US$ 376 per tonne).
The high feed prices are especially burdensome for small and medium poultry farmers, who face limited access to affordable maize and lack the capacity to import it directly.
When Sri Lanka issues import licenses, the surge in demand also drives up prices in nearby maize-exporting countries like Pakistan, historically the cheapest source for Sri Lankan imports.
Currently, the free-on-board price of Pakistani maize is around US$ 255 per tonne (about 75 rupees per kilo), rendering the Sri Lankan maize import tax a significant 30% barrier.
To address the challenges faced by small poultry producers, Minister Herath stated that the government is working to link them with importers to access cheaper wheat as an alternative feed source.
“We will have to continue importing maize until domestic production increases, but we aim to take measures to lower maize prices,” he added.
However, Sri Lanka’s emphasis on import substitution, aiming for self-sufficiency in maize production, isolates the country from global supply chains, limiting its ability to import food affordably and export products competitively.
The special commodity levy and a VAT on processed poultry further hinder maize exports from Sri Lanka, making them uncompetitive compared to global markets.
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