Trouble for poultry, dairy as lockdown keeps mid-day meal off the table

With the Covid-19 lockdown delaying the reopening of schools, the domestic poultry and dairy sector is losing out on the robust supply of eggs and milk supplied for the mid-day meal (MDM) served to the students of government-run schools in India.

While, the conditional reopening of hotels and restaurants has so far provided little respite to the sector with the majority of people shying away from public places owing to safety concerns, the suspension of the MDM scheme has also delayed any notable recovery by the poultry and dairy units.

More than 100 million students and 1.1 million schools are covered under the MDM scheme in India with the Centre and the states incurring the expenditure in a ratio of 60:40, respectively.

The states allocate huge sums for the MDM scheme. For example, Uttar Pradesh has allocated about Rs 2,500 crore for midday meals during the current 2020-21 financial year, an increase of 25 per cent over 2019-20. This shows the potential financial loss to the food supply chains after the scheme was left astray.

Although eggs are served in the southern and some eastern states under MDM, milk is a staple diet in the majority of states running the flagship scheme, which is aimed at providing proper nutrition to the school going children, most of whom belong to the economically weaker sections of society.

About a dozen states have included eggs in the MDM menu viz. Andhra Pradesh, Telangana, Tamil Nadu, Odisha, Jharkhand, Karnataka, Odisha, Kerala, Jharkhand, Tripura etc. In 1989, Tamil Nadu was the first state to introduce boiled eggs in MDM.

According to Poultry Federation of India convenor Dinesh Kumar, although the supply of eggs and milk under MDM accounted for a small share of the domestic production and consumption, yet it provided a regular supply base for the stakeholders, including farmers, suppliers and traders.

“The poultry players are counting the losses, and there are bleak chances of any revival in 2020. Similarly, the dairy has become a losing proposition to the farmers since people are avoiding buying ‘mithai’ (sweets) from shops,” he told Business Standard over telephone from Karnal, Haryana.

Following the lockdown, the poultry units had suffered huge losses due to the sudden dip in demand and closure of hotels and restaurants. This effectively disrupted the entire production and supply chains. Unless, there is a robust and sustained uptick in demand, any revival in the domestic poultry space is a far cry, he noted.

Meanwhile, National Collateral Management Services Limited (NCML) managing director Siraj A Chaudhry said the poultry segment would only revive once hotels and restaurants resumed normal business.

“The MDM forms a small part of the poultry business. The segment will revive when people start eating out after overcoming the safety concerns,” he added.

In fact, poultry was the first sector to be hit by the Covid-19 pandemic, even before the lockdown was imposed in March 2020, when the consumption of chicken and eggs had slumped over health considerations following the outbreak of the disease in China. The situation is no different today.