Tesco has responded to widespread criticism of cheap chicken by raising the amount it pays its chicken farmers. It has agreed to pay chicken producers an extra 2p/kg - equivalent to a 4% increase - to help counter rising production costs. The move comes just two weeks after Asda came under fire for selling chicken "cheaper than dog or cat food" when it slashed the cost of a 1.55kg bird to £2 during a promotion, prompting farmers to warn they could not produce safe, healthy chicken at such low prices. Asda has since reverted to its pre-promotion price of £2.56 for 1.55kg. Tesco's decisions would alleviate some of the pressure on farmers, said Charles Bourns, NFU poultry board chairman. The average price paid for chicken by the retailers is just 54p/kg, according to NFU figures. "Tesco has been the first to move, and that needs singing from the rooftops," he said. "It resisted the move towards a £2 chicken and is now going the other way. Other retailers now have to follow suit." However, Tesco's gesture may not be greeted so warmly by consumers who will foot some of the bill. The retailer has raised the shelf price of whole birds by 4p, from £2.15 per kg to £2.19, bringing the cost of a 1.55kg bird to £3.39. And despite the Tesco turnaround, farmers are still clamouring for further price rises. They estimate they need an extra 10p/kg to offset the rising cost of feed and extra red tape, which came in at the start of the year. "Feed is forecast to hit £150 per tonne this autumn," said Bourns. "The rising price of feed alone has added £12m per year to the costs of one of the country's biggest growers. Tesco's increase is just the first step." Meanwhile, Asda denied its move was in response to the negative publicity surrounding the £2 bird. "It was a three-week promotion, just like any other," said a spokeswoman. "We wanted to clear stocks and beat Tesco on price. It proved very successful, with birds flying off the shelves."

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