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Imports, not flu fears, hurt farmers

State considers banning cheap poultry from H5N1 countries

By Katya Zapletnyuk
Staff Writer, The Prague Post
April 5th, 2006 issue

Standing in a line 10 people deep in front of a poultry shop near the entrance of the Budďjovická metro stop, Dana Moudrá, 43, is hesitant.

"I'm standing here and am not sure whether to buy or not," she says. "My family is basically vegetarian and we only eat poultry because children have to eat some meat. There is nothing left for us now."

Moudrá's fears, of course, are over bird flu. At press time, six infected dead swans had been found in the Czech Republic, and one was confirmed to have carried the deadly strain of the virus known as H5N1. Public health officials expect the others to test positive soon.

H5N1, carried by wild birds that pass it on to domestic poultry, is feared because scientists think it could mutate into a form contagious among humans.

The virus is crippling poultry markets throughout Europe: When H5N1 turned up in France earlier this year, that country's poultry market plummeted nearly 40 percent, according to some reports, as consumer concern mounted.

Other countries reported similar drops in demand.

The Czech Republic's billion-crown poultry industry is also feeling the effects of bird flu, but not in the way you might think. Fears like Moudrá's are not yet driving down demand here, industry insiders say — imports are.

Since the beginning of the year, cheap poultry from European countries looking to dump what their consumers are afraid to buy has flooded the Czech market and is undercutting domestic production.

The Agriculture Ministry is awaiting new data showing how much the Czech poultry industry is suffering, and says it is considering banning cheap imports.

"If [the numbers] confirm a drastic increase of imports, we will consider measures to protect our market," says Agriculture Ministry spokesman Libor Vacek.

Bird flu concerns

  • Six infected dead swans were found in the Czech Republic, with one confirmed as carrying the deadly H5N1 strand of the virus

  • Drop in demand for poultry in EU countries with bird flu outbreaks has flooded Czech poultry market with cheap imports, hurting domestic production

  • The government says domestic demand is not likely to fall due to bird flu fears
  • Endangered market

    The ministry already knows that imports increased 20 percent in January, the same month that saw a spate of European countries — Austria, Italy, Germany, France — confirm cases of H5N1, and expects February's numbers to be worse.

    Since the beginning of the year, domestic poultry sales have dropped 10 percent.

    Chicken production in the Czech Republic, which accounts for 85 percent of the country's poultry industry, is worth 6 billion Kč ($251.2 million) annually.

    Each year, the country exports roughly 684 million Kč worth of chicken, and imports even more: 1.3 billion Kč. In recent years, 20 percent of the 315,000 metric tons (347,228 short tons) of poultry sold in the Czech Republic each year has been imported.

    "Demand in those countries has dropped and local producers are trying to sell their products for cheap prices," thus underselling Czech producers, says Jana Kindlová, spokeswoman for Agropol Food, a Czech company that processes and sells poultry. "We cannot sell below our production costs."

    Cheap imports are mostly arriving from Poland and Italy, according to Vacek.

    Farmers are getting pinched because of the imports. During the first three months of the year, the price local farmers were getting for one kilogram (2.2 pounds) of poultry dropped from 21 Kč to 19 Kč.

    Václav Pojar, director of Perena, a duck-hatching farm in Hradec Králové, said he had to reduce production by 20 percent in early March to offset decreasing sales.

    "If that decline continues it could directly endanger our business," he says.

    European Union laws prohibits member states from banning another member state's exports, but new member states can act to protect their markets up to three years after joining. This gives the Czech Republic the right to ask Brussels for permission to restrict cheap poultry imports.

    Protective measures

    But the government has already taken action to keep the poultry industry from suffering further from an H5N1 outbreak.

    Since the beginning of the year, all poultry stocks throughout the country, except waterfowl such as ducks, have been restricted to enclosed spaces.

    Drůbežárna Holešov, a farm that breeds 20,000 chickens and supplies poultry shops near Zlín, south Moravia, put its entire stock under netting to keep it away from wild birds carrying flu.

    Emilie Procházková, the farm's director, says she also prohibited her 25 employees from breeding poultry at home in order to prevent contact with potentially infected birds.

    The government is also promising to compensate farmers in the case that they have to kill their stocks in an outbreak, but Vacek says no money has been set aside for this yet.

    Comment

    "Demand in these countries has dropped and local producers are trying to sell their products for cheap prices."

    Jana Kindlová,
    Agropol Food

    Where's the fear?

    So far, the Czech Republic seems free from the widespread public fears over bird flu that have hit the marketplace elsewhere. The Agriculture Ministry, for one, says it is unlikely that further confirmations of dead, H5N1-infected birds here will drive consumer demand down.

    At the poultry shop near Budějovická metro station, lines remain long each morning and signs tout the day's offerings.

    There are those, like Moudrá, who are concerned. And there are others, like Ilona Chytilová, a doctor, who say they will not change their diets because of bird flu.

    "My family's eating habits will definitely not be affected by bird flu," she says. "We will eat chicken without any problems."

    Katya Zapletnyuk can be reached at kzapletnyuk@praguepost.com


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