Implemented on 15 May, it offers a subsidy worth 10% in interest payments incurred by new farms that have at least 10,000 parent units of broiler chickens and with at least 70% bank financing. The maximum subsidy is US$830,000.
New farms are also entitled to rebates: on stamp duty on the purchase of land; on a market fee, known as mandi shulk; and on development cess (tax). Some rebates are for the first five years of operation. Feed for birds in qualifying farms is exempt from a 4% tax.
Ahraz Uddin Qidwai, joint director of poultry for the state government, told Globalmeatnews.com that, within five years, the state hoped to attract 410 units and to have 12.3 million more birds.
A large production shortage in Uttar Pradesh is the main driver behind the incentives, Qidwai explained. “Due to more profitable broiler chicken business, very few farms have been rearing breeder and layer birds,” he said. “Every month, millions of eggs and chicks are imported from other states.”
Omkar Verma, regional manager of Suguna Food’s hatcheries in state capital Lucknow welcomed the scheme, but said consumers would not benefit much. “We need organised retail of broiler chickens in the state,” Verma said. “The fragmented small outlets do not take care of hygiene and consumers are suffering.” Suguna is India’s leading broiler chicken producer.
Sandeep Malik, owner of Om Agrivet, a Lucknow-based poultry company, said that while the state incentives were lucrative, the market had already been spoiled by distress-selling by big companies involved in contract farming.
He told Globalmeatnews.com that the market price of broiler chicken in Lucknow fluctuated between US$0.80 and US$1.60 per kilogram, while the production cost was US$1.20.
Qidwai added that some local producers were not cost-efficient and were selling produce at inflated prices. “There was a time when even a layer farm of 4,000 birds was economically viable,” he said, “but times have changed and the market is more dynamic.”