January 12, 2010

 

Thai small farmers blame large egg producers for low prices

 

 

Small farmers in Thailand have called for government assistance in preventing further drops in local egg prices, a trend they blame on market dominance of large egg producers.

 

The severe drop in egg prices meant that the small farmers' production costs exceed selling prices.

 

Manoch Chootubtim, president of the Hen-Egg Farmers Association, said unfair trading and oversupply by large companies are hurting the livelihood of small farmers.

 

Egg production is higher than demand due to excessive supply from large firms, which can sell their eggs below the market price as they have lower production costs, said Chootubtim. Small farmers, however, face higher costs of production but low selling prices in the market, he added.

 

Chootubtim called for the Commerce Ministry to investigate if the practice of selling eggs at below-market price is against the law.

 

Egg production this year is expected to increase by 3.2% on-year to 10.2 billion. Nearly 70% of local egg production is accounted for by large producers, despite 90% of egg producers in Thailand being small farmers.

 

Eggs sell for THB2 (US$0.06) at the farmer's gate, against a production cost of THB2.30 (US$0.07). The average retail price was THB2.71 (US$0.082) last year.

 

Unless the government extends assistance, small farmers would not be able to shoulder the high costs of feed meal and lower retail egg prices, he said. Feed meal prices had increased sharply following higher grain prices last year, but prices did not decrease even after grain prices subsided.

 

Meanwhile, the Commerce Minister Porntiva Nakasai said the ministry would submit to the Cabinet a plan to assist egg farmers. The proposal will call for government agencies' cooperation in promoting egg consumption in order to reduce the oversupply of 1-2 million tonnes per day.

 

Porntiva added that the ministry would soon call a meeting with large egg-producing companies, feed meal producers and agencies to brainstorm ideas for solving the drop in egg prices and for helping small farmers.