Nepal: Nationwide Bird Flu Outbreaks Wipe Out Millions in Farm-Gate Value

The new federal government of Nepal is having its first animal health industry crisis in form of repeat outbreaks of HPAI across major poultry producing areas of Nepal. Economic fallout of these HPAI outbreaks is being felt across larger economy.

The economic fallout from Nepal’s ongoing highly pathogenic H5N1 avian influenza crisis worsened significantly this morning following the publication of a comprehensive nationwide impact evaluation.

Using multi-layer financial modeling to quantify structural damage across the agricultural value chain, econometricians revealed that the relentless spread of the virus has forced the emergency culling of approximately 570,000 birds. This massive biological liquidation translates to an immediate, non-recoverable loss of up to Rs 150 million in pure farm-gate poultry value alone.

Cumulative Micro- and Macro-Economic Toll

The evaluation notes that calculating the market value of the culled layer hens and broiler flocks only scratches the surface of the industry’s broader financial devastation. When factoring in the mandatory destruction of hundreds of thousands of commercial eggs, contaminated feed reserves, and prolonged hatchery production freezes, the macro-economic damage scales dramatically.

The structural shock is hitting a sector that operates on razor-thin margins:

• Hatchery Disruption: Because farms hit by confirmed H5N1 strains face immediate, mandatory 42-day operational lockdowns, the local chick supply pipeline has effectively collapsed. Independent farmers are unable to restock their sheds, guaranteeing a prolonged production deficit extending well into the next quarter.

• Retail Price Spiral: This supply vacuum has triggered a massive shock across urban consumer markets. With key poultry hubs across Koshi Province and the Kathmandu Valley heavily restricted, localized retail prices for broiler meat and table eggs have soared to record highs, straining household food security.

Compensation Bottleneck

The mounting losses have exposed a critical vulnerability for the nation’s farmers. Under the Bird Flu Control Regulation, producers are theoretically entitled to government relief covering up to 75% of their assessed losses based on market rates determined by local district committees.

However, the evaluation highlights a widening execution gap. Administrative delays, lack of immediate treasury allocations, and an active bird flu resurgence inside urban areas mean that thousands of impacted smallholders have yet to receive any financial reimbursement. With insurance companies routinely excluding transboundary epidemics from coverage, small-scale poultry operations are bearing the brunt of the crisis, pushing many toward long-term financial insolvency.

Situation is complicated by the fact that like its bigger neighbour India, Nepal too does not have policy of allowing usage of H5N1 vaccines but allows only LPAI H9N2 vaccines, leaving poultry farmers vulnerable to repeat outbreaks and intermittent losses.