Sri Lanka’s poultry industry is stepping up efforts to provide affordable protein sources amid rising input costs driven by high government taxes, with leading firms finding innovative ways to cut supply chain inefficiencies.
Ceylon Grain Elevators, the country’s largest poultry and feed-milling company, announced that it had coordinated a bulk maize shipment to mitigate import delays and soaring costs. In its 2024 annual report, the company noted the move aimed to “optimize supply chain efficiency while reducing procurement delays and cost overruns.”
Heavy Taxation on Maize Driving Up Costs
Sri Lanka imposes a Rs. 25/kg tax on imported maize, equivalent to around USD 83 per tonne, despite global prices ranging between USD 200–275 per tonne. Locally, maize prices soar to Rs. 140/kg, translating to roughly USD 460–470 per tonne, according to Ajith Gunasekera, President of the All Island Poultry Association.
Gunasekera explained that by chartering a bulk vessel for all poultry producers, the industry could significantly reduce freight costs, as opposed to relying on small container shipments. However, bureaucratic delays in issuing import permits continue to hamper cost-efficiency. “When permits are given at the last minute, sellers inflate prices,” he said.
He also criticized the government’s unequal subsidy policies, pointing out that while rice farmers receive fertilizer subsidies and fishermen benefit from diesel support, poultry farmers are taxed on feed, their primary input. Compounding the challenge, chicken and eggs are subject to value-added tax (VAT), unlike subsidized staple food sectors.
Self-Sufficiency Policy Under Scrutiny
Sri Lanka’s maize import tax policy is rooted in a nationalist ‘self-sufficiency’ drive, which critics say favours a few powerful intermediaries, creating what is now called the “maize mafia.” These policies, according to Gunasekera, have led to inefficient local maize farming and inflated consumer prices.
The notion of national self-sufficiency, experts note, harkens back to protectionist economic models seen in 1930s Germany under the Nazi regime, where rearmament and autarky were prioritized ahead of World War II. Germany’s reliance on domestic production and currency manipulation during that period ultimately led to foreign exchange shortages and long-term economic distortion.
Today, Sri Lanka’s poultry producers find themselves caught between rising global commodity prices, high local taxes, and outdated policy frameworks, even as they try to supply one of the nation’s most vital and affordable sources of animal protein.