The Hindu : Tamil Nadu / Chennai News : Increase in egg prices worries district administrators

Online edition of India's National Newspaper
Wednesday, Jun 27, 2007
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Tamil Nadu

Tamil Nadu - Chennai

Increase in egg prices worries district administrators

Tamil Nadu Bureau

Additional expenditure for Noon Meal Scheme may be Rs.1 crore for small districts, Rs. 2 crore for large districts.
Officials blame cartel in western districts, which neither allows other players to enter nor compromises on price

CHENNAI: District administrators across the State are in a fix over rising egg prices. The average price of an egg, both in the open market and for supply to the Government’s nutritious noon meal programme, has crossed Rs. 2. In some districts, it costs Rs.2.50, overshooting budgetary estimates. Till a month ago, many districts managed to procure eggs for Rs. 1.80 to Rs.1.90.

An official says the additional expenditure involved may be around Rs.1 crore for a small district and go up to Rs. 2 crore for a large district. Tenders for the next three months, beginning July, have been finalised in some districts, while in others, the administration is trying to negotiate with obstinate traders and manufacturers.

In Coimbatore, for instance, the lowest tender for procurement of eggs was Rs 2.10 an egg last time. This time it is closer to Rs 2.50, a source says. The hike may look marginal, but, since the district needs, on an average, 5.4 lakh eggs, the increase in price works out to an additional expenditure of about Rs.2 lakh a week.

A cross-section of officials involved in the purchase of eggs across the State, contacted by The Hindu, are unanimous on the main reason for the price rise: a cartel based in the western districts. It neither allows other players t o enter nor compromises on price, they add.

‘Marginal’ reasons for the price rise include lifting of ban on the export of eggs to Gulf countries (imposed following the bird flu threat) and the huge demand caused by the tri-weekly egg scheme of the Government to schoolchildren...

In the southern districts, over 15 lakh children are beneficiaries of the free egg scheme, the highest being in Tirunelveli, where the figure is 3.1 lakh.

Hatcheries in the Namakkal Egg Zone, are gearing up for an additional production of 70 lakh eggs a week to meet the demand. Zone president of the Tamil Nadu Poultry Feeds and Egg Farmers’ Association R. Nallathambi says once the birds begin to lay eggs, roughly after three months, the demand will come down.

And so will the price He justifies the price hike: “Here we have a few technical problems. For a supply of each set of 1,000 eggs, we give six eggs free of cost.

As per Government stipulations, each egg has to weigh between 46 to 50 grams and should be neither less nor more. And the transport cost works out to between one paise and 1.5 paise per egg. Some poultry farmers point out that at a time when the retail price itself is somewhere between Rs 2.30 and Rs.2.40, a few suppliers in districts have been jacking up the price to Rs 2.65 paise for the Noon-meal Scheme. Expressing concern over the hike, Mr. Nallathambi claims a few suppliers, taking transport charges into account, are charging “a few paise” more per egg. “In Namakkal, we supply at Rs 1.89.” He hopes that the price fluctuation will end, once new chicks start laying eggs.

The decentralisation of tenders to the district-level has not helped, says an official. A State-level tender for purchase/supply may have brought in big players, leading to price cut. “When it comes to the free egg scheme, it will be cheaper if a common price is fixed at the State-level. Transportation charges can be added depending on the distance.

A zonal level tender for purchase of eggs will make the scheme cost-effective,” says an official.

The Social Welfare Department is sending out directives to district administrations, advising they should fix the price close to the National Egg Coordination Committee recommended rate of Rs.1.98.

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