The outbreak of bird flu in India and its spread to nine states within a month of the first cases being reported has rung the alarm bells at a time the country is still trying to tame the novel coronavirus.
Apart from making people fear the consequences of yet another virus outbreak, avian influenza has also begun affecting the poultry sector of India that directly affects the livelihood of over three crore farmers and farm workers.
The economic impact of a bird flu outbreak can be far-reaching, but before we analyse estimates, let us look at its immediate impact.
The price of poultry products has gone down, not only in the nine affected states (with Delhi and Maharashtra being the latest additions), but also in other states and UTs where the virus has not been detected yet.
India consumes nearly 30 crore eggs and 900 crore chickens per month and the poultry sector of the country is worth Rs 80,000 crore. The livelihood of crores involved in the industry is set to be impacted as the bird flu scare will discourage more and more people from consuming poultry and poultry products.
To understand how the bird flu outbreak in India will hurt the economy we can fall back of COVID-19 impact data. In the initial months of the outbreak of coronavirus in India, when there were speculations that the pathogen might have spread through birds, the poultry sector of the country had lost out on $1 billion.
Even now, birds are being culled by the thousands leaving hapless poultry farmers a worried lot. Although most state governments have promised adequate compensation, that does much less to alleviate the immediate concern and financial duress caused. Besides, farmers have often complained that such government compensations do not factor in the profit they would have made otherwise.
A poultry shop owner from Uttar Pradesh’s Kaiserbagh has said: “Usually our business sees hike during winter but it's witnessing 50 percent slump. We thought of recovering losses suffered during COVID-19, but with Bird Flu it seems difficult.”
Another poultry retail supplier from Chennai said the Rs 1.75 lakh crore poultry industry in India has seen a 10 to 15 percent slump in demands since the outbreak. “Consumers are showing some signs of nervousness going by the sales trend over the last two days. We feel consumption has slowed by 10-15 percent.”
Meanwhile, a supervisor at a poultry farm in Kerala said: "Chicken consumption has reduced by 60 percent, resulting in price reduction. We have to reduce the prices due to bird flu while the shop keepers haven't reduced it."
Additionally, poultry products supplier Venkys’ share price dipped more than five percent intraday on January 6 as bird flu started spreading to more states in India.
The compounded annual growth of India’s poultry sector was projected at 16.2 percent between 2019 and 2024, but with the worrying turn of events that are unfolding, such a target might be hard to achieve.With agency inputs