POULTRY SECTOR OF INDIA CAN PLAY A PIVOTAL ROLE IN SOLVING THE PRESENT ECONOMIC SLOWDOWN CRISIS DURING COVID19
Market-based economies thrive on hope and belief of profit by private entrepreneurs. In the times of negative market sentiments arose due to COVID19 Pandemic , the poultry sector can play a pivotal role in the national economy by its strong hold. Although the poultry sector cannot remain untouched from the ongoing effect of the economic depression in the country due to COVID19 but this sector is having much shock observing capacity against any other enterprises among agriculture & allied sector due to its typical mode of monetary operation.As we know there has been negative growth of the national GDP but not as much as it is being narrated by media.Lets understand the concept of GDP in livestock farmers language.
Suppose you inherited a farmland and a house. You grow your own food using family bank of seeds. You don’t use chemical fertilisers and prepare organic manures using cow dung and similar stuff on your own. You don’t buy fodder for your cattle or poultry which fulfil your milk and meat requirements. You use biogas as fuel for household energy. This means you have a self-sustained viable economy. But you are contributing nothing to country’s gross domestic product (GDP) as you are not using money.
Now, consider this. Your neighbour works in a factory and earns a salary. She buys grocery from a kirana store, milk and butter from a dairy parlour, clothes from a shopping mall, dines out and watches a movie or a play on weekends, employs a help in her home and pays taxes. Her activities are the guarantee that the country’s GDP clock is ticking upward.
Every single purchase by her begins a chain of purchase and sale. The kiranawallah goes to wholesale market to buy stuff for shop. The wholesale market sources its supplies from the farmers, who purchase seeds, fertilisers, tractors, diesel and employ labourers on their fields. All are paid in money. This is repeated for every single purchase by your neighbour. She ensures flow of money that defines growth of measurable GDP.
This chain of sale and purchase has shown signs of slowdown over the past few months due to nationwide lockdown . It is visible in almost every sector of the Indian economy. The result was worrisome for 2020-21, for which the GDP growth rate is shown to be negative. Recent negative GDP figures have only aggravated the concerns of economic slowdown.
But here in case of poultry sector it is nothing to worry more except the time bound hike in the poultry feed raw materials like maize and soya due to low production and MSP factors.
Here is a brief introduction of the prospects of poultry sector in India during economic slowdown.
The poultry farming in India occupies an important position due to its enormous potential to bring about rapid economic growth, particularly benefiting the weaker sections due its low investment requirement and short gestation period.
Poultry is important for increasing productivity in Livestock sector.
The Indian poultry market, consisting of broilers and eggs was worth INR 2,049 Billion in 2019. India today is the one of the world’s largest producer of eggs and broiler meat. The poultry industry in India has undergone a major shift in structure and operation during the last two decades transforming from a mere backyard activity into a major industry with the presence of a large number of integrated players. This transformation has involved a sizeable investment in breeding, hatching, rearing and processing activities.
Indian Poultry Farm Market: Drivers
Increasing Incomes Coupled by Changing Food Habits:
Broiler meat in the past had been considered to be a delicacy but as a result of increasing levels of urbanization and higher levels of disposable incomes, poultry meat is increasingly seen as less of a luxury product and more as a daily staple. Further with changing food habits and increasing exposure to global cuisines, the Indian population is increasingly converting to a non-vegetarian diet. Poultry meat is preferred over other meat products as it is considered more hygienic and is available throughout the year across the country at relatively lesser prices than fish/mutton.
Large Unpenetrated Market:
The annual per capita consumption of broiler meat and eggs remains one of the lowest in the world and is significantly lower than many emerging and developed markets. As a result of the low penetration levels and continuously increasing income levels, however, we expect the per capita consumption of both broiler meat and eggs to increase continuously during the next five years.
Growth in the Food Services Market:
Growth in the food services market such as restaurant and fast food joints are also creating a positive impact on the consumption of broiler meat and eggs. Both broiler meats as well as eggs represent important ingredients in both traditional Indian non-vegetarian recipes as well as fast foods.
Growth in the Bakery Foods Market:
Eggs represent an important ingredient in bakery foods. The Indian bakery foods market is currently exhibiting strong growth rates. We expect the growth of the bakery foods market to create a positive impact on the consumption of eggs in India.
The growth potential of this sector is bright due to regular flow of income throughout the year in the rural economy of the India. Among the livestock sector Poultry industry contributes about Rs. 1.25 lakh Cr accounting for about 1.25 per cent of the national GDP and about 15% of the Livestock GDP. In livestock 65 per cent is contributed by meat products, 22.5 per cent by dairy products and 12.5 per cent by poultry products (FAO Statistical Book, 2011). Poultry sector provides employment to over Six million people in the Country. Poultry sector is dubbed as the one having highest employability per unit of investment among all the livestock sectors. The Indian poultry sector with 7.3% growth in poultry population, has witnessed one of the fastest annual growth of about 6% in eggs, 10% in meat production and 8.35% in broiler production over the last decade amongst all animal based sectors. Despite such progress, the average per capita availability is still merely 79 eggs and 3.9 kg of poultry meat against the recommended levels of 180 eggs and 11kg meat per annum. The organised sector of Indian poultry industry contributes nearly 70% of the total output whereas the rest emanates from the unorganized sector. In spite of a spectacular growth in the poultry sector during the past two decades, a huge gap exists between availability and need of poultry products. Therefore, to meet the domestic need, it is required to increase meat production by six times. Increase in population growth, changing life-style, shifting of food habits, rapid urbanization, increased per capita income, awareness about health care, etc. are contributing towards rising demand of poultry products. Thus, the growth potential of this sector is bright due to regular flow of income throughout the year in the rural economy of India. Diversification of agriculture through allied activities like poultry farming has acquired added significance for solving the agrarian crisis of the state. Adoption of poultry farming, will meet the growing demand of poultry products and nutrition.
Indian Poultry Industry is 5,000 years old; recently it began to witness remarkable growth from backyard to poultry industry. Nearly 70 per cent of the total output of poultry industry is contributed by organised sector and remaining 30 per cent by unorganized sector. There are about 1500 hatcheries operating in the country. India’s poultry industry represents a major success story. Poultry Industry is providing nutritional security to the poor and also offering employment to millions of people in rural and urban areas. The future for Indian poultry Industry appears to be very favourable. The most conservative estimates predict a two- to three-fold increase in poultry production over the next ten or fifteen years.
India’s poultry market & impact of pandemic:
The global trade is hampered as many ports are subjected to delays and lockdowns being practiced by different countries have forced traders to move to other ports, to reship or to delay shipments. Furthermore, potential exporters, like the US, EU, and Brazil, are increasingly being challenged by local spread of the virus in their domestic market and by more difficult trade conditions.
India is ranked as third largest producer in the world after China and the USA and the fourth- largest chicken producer in the world. The poultry sector has been growing in India since decade with increasing numbers of players establishing small but organized business.
Indian Poultry at a Glance
Annual Turnover INR 1,25,000 Crore
Growth Rate 6 to 8 per cent per annum
Production of Broilers 400 crores per annum
Production of Eggs 9300 crores per annum
A large group of poultry companies are based in the South India. Andhra Pradesh and Telangana accounting for majority of the birds and eggs produced in India. Hyderabad in Telangana is the epicenter for the poultry industry in India
Impact of Pandemic
The poultry industry has been hit less by the pandemic, more by misinformation. The industry has been largely hit by fake messages and fear being spread through social media.
This misinformation passed through social media and the fear have lowered the wholesale price of the eggs by 15 to 30 per cent since the outbreak of the coronavirus disease.
NECC has stated that the average farmgate prices has fell to INR 2.50 a piece against a production cost of INR 4 and this caused approx. loss of INR 600 crore for egg producers since January 2020. Apart from egg producers, the broiler farmers are unable to pass on the input cost to the wholesalers and are incurring the loss on birds and eggs.
JOURNEY OF INDIAN POULTRY INDUSTRY
The poultry industry in India was mainly a backyard venture before the 1960s and has been changed into an exciting agribusiness with an annual turnover of Rs 1.25 lakh crores. India is the third largest egg producer in the world (after China and the United States of America), and the fourth largest broiler producer. Definitely, this remarkable growth is a result of several factors, such as active developmental support from the central and state government, research and development experiences from research institutes, high per capita income growth and international collaboration in private sector. Indian poultry is self-reliant, supported by extensive and strong genetic base in which the productivity levels of broilers and layers are equal to those achieved elsewhere. However, globalization is posing greater challenges by making the industry globally competitive and viable and creating enormous potential for growth by changing food habits and preferences. Poultry meat has outpaced its two chief competitors – beef and veal and buffalo meat. Another major development in Indian poultry production is the emergence of integration, which is occurring very rapidly, especially in broiler production, both in southern and western parts of India. Driven by rising purchasing power, changing food habits, contract poultry farming and rapid urbanisation are certain key reasons for this constant upswing in this niche poultry sector, But sporadic bird flu outbreaks in different parts of the country along with lack of storage and processing facilities and rising prices of feed stocks including soya meal and maze have severely hit the poultry exports. Maize accounts for above half of total production cost of poultry feed and the poultry sector consumes about 50 per cent of total maze production in the country. Broiler meat and table eggs account for the domestic poultry market. Moreover, the Indian poultry sector has started shifting from a livebird market to a chilled/frozen-product market.
Southern India accounts for majority of total poultry production and consumption in the country. Andhra Pradesh, Telangana , Kerala, Karnataka, Tamil Nadu and Maharashtra in the west and Punjab and Haryana, in north are key regions in this aspect. Significant breakthrough in poultry science and technology helped in breeding of genetically superior birds capable of high production. Manufacture of high-tech poultry equipments are also key reasons for growth in egg and meat production. There are more opportunities for foreign direct investment (FDI) in the poultry sector in areas like breeding, medication, feedstock, vertical integration and processing, but lack of infrastructure like power and transportation are major turn off in this aspect. Nearly two crore farmers (including agrarian farmers) are employed in poultry industry. Currently, there are about 1,600 hatcheries operating across India. India is attracting attention by setting itself as the world’s largest food “factory”, currently; its processed food market is growing at a phenomenal rate. It offers surprising opportunities to overseas entrepreneurs who wish to expand their foreign markets by using India as a sourcing centre for regional exports, transfer technology or sign joint ventures. Indian exporters and entrepreneurs would also largely benefit from poultry industry. The world poultry-meat industry is growing fastest among all the meat categories due to rising concerns for health, safety, convenience and variety, and price competitiveness. Issues related to poultry-meat supply chains include, among others, perishability of the product, environmental regulations and globalization. The world poultry-meat industry derives its significance from the fact that among all the meat categories, poultry meat is the fastest growing. Due to the high consciousness towards protection of the environment, poultry farms today are increasingly required to adhere to the environmental regulations stipulated by the governments, particularly with regard to water purity, manure removal and dead carcass disposal.
EVOLUTIONARY PHASES OF POULTRY SECTOR
Over the years, the poultry industry has undergone tremendous changes in its structure and its operations. In four decades, the industry has grown from a subsistence activity into an organised, scientifically-oriented and technologically-driven industry. The structure of the poultry industry, however, is not consistent and differ’s region wise within the country. Broadly, the poultry industry in India consists of two groups – organised and unorganized sectors. The organised sector contributes 70 percent and the remaining 30 percent is contributed by the unorganized sector. The organised sector uses intensive farming, sophisticated breeding systems, and modern technology to generate greater productivity. The unorganized sector, on the other hand, has no promotion for brands. in fact most of them do not sell under any brand.
The poultry sector has evolved through three distinct phase’s namely traditional, semi-commercial and commercial system.
a) The traditional system of farming ———-was regarded as backyard business, where small-scale farmers raised the chicken (poultry birds) for self consumption and occasionally sold the excess at neighborhood/local markets. Farmers were disappointed with agriculture due to irregular (uncertain) income, inadequate irrigation facilities, erratic climate conditions, limited credit sources and increased debt burden. Thus, farmers were unhappy with the agriculture produce for the late monsoons, as a result the farmers took active interest in non crop sector (poultry and dairy). Although unorganized poultry farming did not follow any organised form of production, it played an important role in the rural environment, as it was a source of income as well as employment. The traditional system, though faced several limitations like unawareness of veterinary services, poor quality of inputs, limited/inadequate infrastructure, high incidence of disease, etc. which did not enable farmers/cultivators to achieve optimum level of productivity.
b) The semi – commercial and commercial system of farming-——– adopted more sophisticated and specialized techniques on bulk production and required low levels of labour. By adopting modern technology, farmers were able to produce poultry for specific uses viz: layers for eggs, broiler for meat etc. Further to encourage them, the government offered several incentive schemes. For instance, incentives were given to players who adopted modern technologies and achieved higher productivity. In addition, many research institutions were setup and other facilities like training, veterinary care, insurance schemes and technical support were provided, which helped the growth of commercial farmers/integrators.
India’s National Action Plan for the egg and poultry industry:
The action plan launched by the government is intended to double farmers’ incomes by 2022, feed the growing population and help raise the socio-economic status of India’s rural economy. Putting forward measures to enhance poultry production targets by 2022-2023, the action plan states that the 3.26 million tonnes (MT) of chicken meat available (baseline data for 2015-2016) needs to be bumped up to 6.20 MT by 2022.
The plan states that 5.167 billion commercial broilers would be required by 2022, instead of 3.326 billion commercial broilers (2015-2016 data). An additional 1.840 billion broilers would be required over the base period, with an additional 31-32 million chick placements each week. Similarly, the plan notes that egg production is currently at 5-6% per annum (compound annual growth rate). With newer scientific advances the plan suggests a substantial increase in egg production – like 500 eggs in 100 weeks compared with the current 320+ eggs in 72 weeks – could be achieved by 2022-2023 provided there is adequate government policy support for the poultry industry. It also suggests the government could use fiscal measures to support rural backyard poultry which accounts for about 29% of total egg production.
The plan notes that there is a need to increase egg production. The white paper states: “one of the great challenges currently facing us is how to feed an estimated 9 billion people worldwide by the year 2050, 40% more than presently inhabit the planet; even more formidable is the challenge of achieving this without damaging the environment. The challenge is how to increase the food supply, particularly food of animal origin. While rural backyard poultry systems play a pivotal role in achieving nutritional security in rural areas”. The current crisis affecting the poultry sector, however, has compromised many of these plans and is expected to further undermine growth unless the government intervenes.
STRUCTURE OF POULTRY PRODUCTION
Poultry farming involves breeding, raising chicks, Layer farms and Integrators for various purposes.
1. Breeding farms: They hatch and raise poultry for sale to other farms.
2. Broiler farms: They rear chickens for their meat, procuring day-old chicks and keeping them for around six weeks.
3. Layer farms: They keep hens to produce eggs.
4. Integrators keep breeding stock and also operate hatcheries and commercial broiler farms. It is estimated to be roughly one lakh layer farmers and an equal number of broiler farmers. About 70 percent of these are small-scale (3000 – 10000 birds) and mediumscale (10000 – 50000 birds) farmers. Only 10 percent are large-scale farmers with units varying from 50 000 to 4 lakh birds.
Need for increasing of egg production:———–
One of the great challenges currently posing us is how to feed an estimated 9 billion people by the year 2050 world-wide, 40% more than presently inhabit the planet, even more formidable is the challenge to achieve this without damaging the environment. The challenge is how to increase the food supply, particularly food of animal origin, in light of increasing global demand from predominantly urban populations with increased purchasing capacity. Concomitantly, the rural backyard poultry systems play a pivotal role in achieving nutritional security of the country in rural areas. In village poultry systems the production of poultry meat and eggs is extremely efficient in terms of feed and water inputs. These nutritious products can supplement household grain-based diets. Family poultry have a special place as they are under the control of women, require low investment, assist in pest control and provide manure for fertilizer. Improvements in their production can meet the nutritional demand in the household and in the community by increasing their social standing and financial autonomy. Major objective of livestock/poultry production is to provide safe and healthy animal food/ protein for the growing population. However there are many serious challenges cropping up on its sustainability.
Growth Drivers and Emerging Trends for eggs and poultry————
i. In India, poultry sector growth may be attributed to many factors like rising incomes and a rapidly expanding middle class, together with the emergence of vertically integrated poultry producers that have reduced consumer prices by lowering production and marketing costs.
ii. ii. Integrated production, market transition from live birds to chilled and frozen products, and policies that ensure supplies of competitively priced corn and soyabean are keys to future poultry industry growth in India. Further, disease surveillance, monitoring and control will also decide the fate of this sector.
iii. iii. Concurrently, India’s unorganised and backyard poultry sector is also one of the potent tool for subsidiary income generation for many landless/ marginal farmers and also provides nutritional security to the rural poor.
iv. iv. These achievements and growth rates are still being sustained despite the ingress of avian influenza which was a severe setback for the industry, showing the resilience of the subsector, perseverance of the private sector and timely intervention by the Government.
v. v. To assess the future trends we have to review the past planning and present scenario to extrapolate the future. The externalities and variables are often unprecedented and sudden. Both empirical and statistical methods need to be accounted for while making any predictive assumptions. The ‘Livestock Revolution 2020’ study by Delgado et. al. gained such acceptability and popularity because variables and factors like economic crises and increase in consumption of meat products etc. were integrated in the study.
MAJOR PLAYERS IN THE POULTRY INDUSTRY
The key stakeholders in the Indian poultry market are as follows. a) Sneha Foods Limited, Telangana b) Srinivasa Hatcheries (SH Group), Telangana c) Balaji Hatcheries, Andhra Pradesh d) V S N Hatcheries, Andhra Pradesh e) Mulpuri Group, Andhra Pradesh f) Venky’s (V H Group), Maharashtra g) Suguna Foods, Tamil Nadu h) R M Group, Haryana. i) Skylark Foods, Haryana j) Komarla Group, Karnataka k) I B Group, Chattisgarh l) Bharati Poultry, West Bengal
Venkateshwara Hatcheries (VH):
It is one of the leading company in the poultry industry in India, It has played a major role in distributing the latest techniques in poultry raring and animal health care. It undertakes activities such as pure-line breeding, supply of grandparent and parent stock, chicken processing, egg processing, feed manufacturing, SPF production, poultry vaccine production, diagnostic services, human-resource training and production of pet foods. It is the first Indian company selling processed chickens under the “Venky’s” brand name. It supplies to number of large international fast-food companies. The product range caters to retail as well as institutional markets, and includes fresh chilled chicken, frozen chicken (whole, boneless and portions), and several economy products. Venky’s Minto mein, an array of ready-to-cook products (freezer-to-fryer, microwaveable and cold cuts) has wide appeal among homemakers. Although, the company has operations in all parts of India, it is particularly concentrated in the south and west. Despite the liberalized trade regime, the conglomerates constitute around 80 per cent of the layer market and 65 per cent of the broiler market.
Godrej Agrovet:
It has set up its integrated poultry business in 1999. Godrej Agrovet covers the whole spectrum of the poultry industry, from breeding, hatching and rearing of broilers to processing and marketing of its branded chicken “Godrej Real Good Chicken”. It also has contract farming operations in south and west India working with 1000 farmers.
Suguna Poultry Farm Ltd:
The Rs 1400-crore Suguna Poultry Farm produces over 55 lakh broiler chickens through a large network of contract farmers across the country (except in the Kerala). They are marketed as live birds, dressed whole birds, and processed and branded parts. It has launched its branded eggs, “Sumegga Pro” sourced from its own high-tech layer farm in Namakkal. The farm has a capacity to produce 6000 to 8000 eggs a day. The company is implementing a Rs 950-crore long-term programme for setting up hatcheries and feed mills across the country. It is seeking a US$20 million (Rs 100 crore) IFC (International Finance Corporation) loan for the projects. IFC has already invested Rs 50 crore (US$11 million) as equity in Suguna Poultry Farm. Work is under way to build four hatcheries, two in Andhra Pradesh and one each in Tamil Nadu and Maharashtra. They will be completed this year (2007). Suguna has a tie-up with Ross Breeders, United Kingdom, for the supply of grandparent chicks. The company is also setting up four feed mills, two in Pradesh, and one each in Karnataka and Maharashtra. Suguna is also experimenting with contract farming in maize, the main ingredient of chicken feed, in Karnataka. It has tied up with farmers for the cultivation of 16 000 acres (6 474 hectares) of maize this season. If the experiment is found to be successful it will be replicated in all other maize-growing states in the country. Suguna, which revolutionized the way chickens are grown and marketed in India, has established itself in the market for a variety of chicken products. The Indian market is still a live-bird market, and Suguna has a very large network for retailing live birds. It caters to the high-end market, and branded restaurant chains from its high-tech processing plant Supreme Suguna Food Co. ltd, a joint venture with Supreme Foods Co. ltd in the Gulf. a small portion of the products are exported. Suguna is a major supplier to McDonald’s in India. Suguna owns the “Sugies” brand of ready-to-cook preferred chicken parts sold through high-end retail stores. The next stage in chicken marketing would be the introduction of ready-to-eat products such as sausages and nuggets
Producers’ Association
The National Egg Coordination Committee (NECC), which has a membership of more than 25 000 farmers, is the largest association of poultry farmers in the world. Its origin goes back to 1981. At this time, the Indian poultry industry was going through an unprecedented crisis. The intermediaries controlled the trade and forced the prices down. As a result, farmers were being paid less than their production costs. The scenario looked quite miserable. Over 40 per cent of farmers had stopped operations because the business had become economically unviable where feed costs was more than doubled, but egg prices remained static at 35 paisa. Determined to do something, the late Dr B.V. Rao, along with a group of farmers, started a mass movement and they travelled across the country holding meetings with farmers and traders. Their objective was to unite poultry farmers from all over India, and see that they get better prices by eliminating intermediaries from the trade. Thus, NECC was born. Since then, NECC has played a significant role in the betterment of poultry farmers, and the egg industry in general, through its various programmes such as market intervention, egg promotion campaigns, price-support operations, and consumer education. The manifold activities of NECC include price declaration, deciding a reasonable price for eggs that guarantee a reasonable return for the farmer, decent margins for the intermediary and a fair price for the customer, monitoring the egg stock levels in different production centres, managing stock levels and regulating the movement of stocks from surplus to deficit regions so as to maintain a balance between demand and supply. Market intervention through Agro Corpex India Ltd, helped in organizing and uniting poultry farmers across the country, creating a dependable distribution network so that eggs can reach every household in every village, generating employment by encouraging people to take up egg farming and egg trading, promoting exports and develop export markets, making available technology and information for increased production of eggs, obtaining governmental support and financial aid from banks for various schemes in rural India. The other activities like creating awareness among customers, undertaking egg promotion campaigns to increase the consumption of eggs, conducting market research, identify potential market and develop new markets; and preparing and submitting position papers to the government on issues affecting the poultry industry were also taken by NECC. NECC is a totally a voluntary body created by farmers, and runs on cooperative spirit. It makes no profits and subsists mainly on contributions from its members. Most of today’s egg production comes from NECC members. In the broiler sector, there is no national organization that look after the producers’ interests. No doubt, there are some regional organizations (e.g. the Broiler Growers’ Association) have emerged and are trying to organize farmers, but the broiler marketing is largely in the hands of big traders and commission agents in mandis (wholesale markets) like Ghazipur in Delhi and Crawford market in Mumbai. In general, intermediaries are vital links between producers and consumers. The margin between the farm gate price for broilers and the price paid by the consumer is about 20 to 25 per cent. There are also efforts by a southern-based consortium of broiler producers and marketers (the National Broiler Coordination Council) to promote the consumption of poultry meat and to stabilize wholesale prices of poultry meat.
GOVERNMENT-SUPPORTED INFRASTRUCTURE
Infrastructure is in place at the government level to encourage the poultry industry through financing by the National Bank for Agriculture and Rural Development (NABARD). As banks and the National Cooperative Development Cooperation (NCDC) have started financing small and marginal farmers in villages, poultry insurance has also been introduced under the Indian Rural Development Programme (IRDP).
The General Insurance Corporation (GIC) of India has introduced poultry insurance which covers the following:
a. Comprehensive cover for poultry farmers;
b. Epidemic poultry insurance through hatcheries; and c. Poultry insurance schemes for parent stock through hatcheries.
AGRICULTURE AND PROCESSED FOOD PRODUCTS EXPORT DEVELOPMENT AUTHORITY (APEDA)
The Agriculture and Processed Food Products Export Development Authority (APEDA) came into existence in 1986 in order to promote exports of agricultural commodities and processed food products. Promotion of processed farm produce, in turn, benefits farmers through: (a) higher returns for products sold in the export market; and (b) creation of employment opportunities in rural areas through various kinds of processing activities. The main function of APEDA is to build links between Indian producers and global markets; to achieve this, APEDA seeks to identify new markets, provide better support systems for exporters and manufacturers, and introduce new products into the international market. The main activities of APEDA include the following:
1. Development of a database of products, markets, and services;
2. Publicity and dissemination of information;
3. Receiving official and business delegation from abroad;
4. Organization of product promotions abroad and arranging visits abroad for official and trade delegations;
5. Participation in international trade fairs in India and abroad;
6. Organization of buyer-seller meetings and other business interactions; and
7. Dissemination of information through newsletters and feedback
TRADE AND TRADE POLICY
There are no restrictions on egg and poultry exports from India. However, India’s poultry exports are confined to table eggs, egg powder, and SPF egg shipments to markets in Asia, Africa and the Middle East. India’s export of poultry meat is less due to high production costs, insufficient marketing infrastructure and limited processed poultry production. In addition to restrictive sanitary import regulations, a lack of cold chain facilities and Indian consumers’ general preference for live birds limit marketing opportunities for frozen poultry. India prohibits the import of poultry and poultry products from countries reporting either low pathogenic or high pathogenic notifiable avian influenza. The most recent Gazette of India notification on the prohibition of poultry and poultry product imports from notifiable avian influenza reporting countries is available on the website of the Department of Animal Husbandry, Dairying and Fisheries and can be accessed at Indian Gazette notification on avian influenza. In 2009, India amended the avian influenza rule to allow imports of processed poultry products subject to a “conformity assessment.” Under the conformity assessment, processed poultry may be exported to India if the requirements outlined in the conformity assessment are met by the exporting country. Note that trade data indicates that India’s import of processed poultry products are nil and as of this time, the United States is unable to export processed products to India under the requirements in the conformity assessment. A copy of India’s conformity assessment requirement is available on DADF’s website at conformity assessment.
REGULATORY FRAMEWORK
Meat processing is licensed under the Food Safety and Standards Regulations, which is administered by the FSSAI. This order established the sanitary and hygienic standards for slaughterhouses and sets maximum residue levels (MRLs) for meat products. The FSSAI also regulates import testing of food products at the port of arrival. Poultry and Poultry product exports to India are overseen by Department of Animal Husbandry, Dairying and Fisheries. Exports to India require two documents: a sanitary import permit issued by DADF and a veterinary certificate issued by the relevant veterinary authority of the exporting country. The veterinary certificate must certify to sanitary conditions required by DADF. Indian import certification requirements for poultry products are available on DADF’s website.
Rising Feed Cost:
Poultry farms in India are facing pressure on their profit margins due to a sharp increase in feed prices and their inability to pass them on to the consumers, despite a peak demand season.
The scenario has changed in the sector over the last two months. The government’s effort to protect farmers through sustained increase in the minimum support prices (MSP) has seen a rise in prices of maize and soybean. The two are used as feeds, and take up half the cost of chicken and eggs.
Maize prices have jumped 21 per cent in the last two months to Rs 2,000 a quintal due to crop losses owing to deficient rainfalls in Andhra Pradesh and Karnataka, and pest attacks in other parts of the country. Thus, poultry farmers have to pay around Rs 2,000 a quintal compared to Rs 1,450-1,500 a quintal last year. The government raised the MSP by 19 per cent to Rs Rs 1,700 a quintal this year. Soybean prices rose 16 per cent to hit a five-year high at Rs 3,964 a quintal. This is attributed to a continuous hike in the MSP, which was raised by 11 per cent to Rs 3,399 a quintal this year.
Poultry feed accounts for about 60-70% of the total cost of production which is one of the most serious challenges for the industry Therefore, improving feed conversion efficiency would be crucial to profitability apart from the feed cost itself. Over the past two decades, feed conversion rates for poultry have improved by about 40 percent, partly due to improved productivity and partly due to efficient feeding strategies. However, still only 25-35 percent of the nutrients consumed are utilized. Hence, further understanding of digestive physiology and biochemistry can be expected to improve nutrient utilization. Growing human population along with that of livestock has strained the feed resources of the Country. Cereal by-products and oilseed residues usually constitute about 50% of poultry diet. Coarse cereals such as pearl millet, grain sorghum, corn, minor millets and ragi etc. also form the staple diet of millions of marginal farmers and landless labourers. These coarse cereals are the most important and most widely used poultry feed ingredients all over the world. However, their domestic supply is marred by the vagaries of nature as they are grown on rainfed /drought prone marginal lands with wide fluctuations in the yields and hence their total production. Coarse cereals constitute about 22% of total food grain production and occupy about 38% of total acreage under cereals in India. The demand for coarse cereals is continuously increasing at 4% per year due to ever increasing population and their use in livestock rations. The yield of maize, the most important ingredient of poultry feed in India is just about 40% of the world’s average which is attributed to limited availability of quality seeds, pesticides and fertilizers etc. The consumption of maize growing at 6% per annum has clearly outstripped production growth due to stagnant productivity and acreage at about 6.6 million ha. Thus, the consumption and production gap will keep rising due to growth of poultry sector as also due to its increasing industrial use (for production of ethanol, maize starch and high fructose corn syrup etc.) Soybean is yet another important poultry feed ingredient used as protein source in poultry rations. Instability in its production and indiscriminate exports result in its shortage for the poultry industry leading to its high prices. The soybean production in the country is about 12.5 mmt which is likely to reach 18.9 mmt by 2030.
Institutional and Capital Constraints: ————-
The support in the form of public funded institutional support is not adequate for the Indian poultry sector worth Rs. 125 LAKH crores. Support for Poultry Science education and R&D is meager in the National Agricultural Research System. Similarly, there is an urgent need to establish Poultry Development Board on the lines of NDDB in the country, though National Meat and Poultry Processing Board has recently been set up for addressing key issues related to development of meat and poultry processing sector. Financial barriers prevent small farmers from intensifying their production. The investment required often exceeds their net worth. It has been observed that the financial institutions exhibit reluctance in supporting the projects aimed at establishing small/medium poultry production units. Some of the institutions even put the poultry activity in their negative list as far as financial support in the form of credit is concerned. The facilities of micro credit must be extended to poultry sector as well in order to promote poultry production by the masses. Having drawn an sketch of Indian poultry sector appreciating various challenges and opportunities thrown open in a transforming poultry economy, there is a need to prioritize various issues and to draw a road map to address the same through technological interventions. In the process, it is imperative to review the R&D support already available to the Indian poultry sector and the status of technologies already developed.
MAKE IN INDIA IN POULTRY SECTOR-—–
Advantage India
* Fastest growing economy in the world
* Largest producer of several agri commodities 9 Second largest Consumer market
*Significant investments in world class ports, logistics & supply chain infrastructure
*Proactive Government policies
*Investor friendly incentives
*Highly skilled manpower pool
Why India for Meat and Poultry Processing? ————–
* India has the world’s largest population of livestock.
*India produces around 5.8 million MT of Meat and 80 bn eggs annually.
*India is the largest producer of buffalo meat and 2nd largest producer of goat meat.
*Holds 3rd position in egg production & 4th position in chicken production.
*The current processing levels in poultry are 6%, while for meat it stands at 21%.
* Poultry is a highly vertically integrated industry in India and matches the efficiency levels of many western countries.
*Government of India has taken steps for modernization of municipal abattoirs to provide safe and hygienic meat to consumers.
*Export oriented units have invested significantly in establishment of large abattoirs-cum-meat processing plants with the latest technology.
*Farm automation, abattoirs, logistics, processing and point of sale cold storage infrastructure are an opportunity in India, given the changing preference of Indian consumers for clean, safe and hygienic meat and meat products.
Export Scenario ————-
*India exported meat and poultry products worth around USD 5 bn in 2014-15 of which buffalo meat alone accounted for USD 4.8 Bn. Other export items include egg powder, sheep/goat meat etc
*Major export destinations include Vietnam, Malaysia, Egypt, Thailand and Saudi Arabia.
Key Fiscal Incentives ————
*100% FDI permitted through automatic route in food processing sector.
* Concessional rate of Customs Duty applicable on imported equipment under the project import benefits.
* Income Tax deductions on capital expenditure allowed at the rate of 150% for setting up and operating cold chain or warehouse for storage of agriculture produce.
*100% income tax exemption available to new food processing, preservation and packaging units for the first 5 years of operation, and at the rate of 25%-30% thereafter.
*A fund of ` 20 billion created with National Bank for Agriculture and Rural Development (NABARD) for extending affordable credit to designated Food Parks and units therein.
Schemes of Ministry of Food Processing Industries——————
* Mega Food Park Scheme By Ministry of Food Processing Industries. Government of India through MoFPI is putting up 42 mega food parks (35 approved). The parks have around 1,200 developed plots (of approximately 1 acre each) with basic infrastructure enabled, that entrepreneurs can lease for the setting up of food processing and ancillary units.
*Scheme for Cold Chain, Value addition and Preservation Infrastructure by Ministry of Food Processing Industries. 9 Scheme for setting up/modernization of abattoirs (for Government abattoirs) by Ministry of Food Processing Industries
Scope with value added products————
i. Whole egg powder, brined and pickled eggs, egg roll, egg strips, egg soufflé, egg cutlet, egg crepe and waffles, albumen flakes/ rings, yolk powder, natural yellow pigment from yolk, lecithin, conalbumin and avidin from eggs used in pharmaceutical industry.
ii. ii. Lysozyme, di-calcium phosphate from shell and shell membranes, cured and smoked chicken, chicken patties, intermediate moisture diced products with long shelf-life, battered and breaded enrobed products, chicken chunkalona, chicken soup, chicken essence, nuggets, kababs, meat spreads, marinated breast fillet, hotdogs, frankfurters etc.
iii. iii. Giblets, liver, and liver extract, deboned meat for airline industry, chicken gizzard pickle, Feather meal, poultry byproduct meal from inedible portions as a source for poultry feed etc.
iv. iv. High demand for various forms of egg powder and Hatching eggs including Specific Pathogen-Free (SPF) Eggs
SUGGESTIONS TO GOVT. OF INDIA TO OVERCOME THE CRISIS
1. Institutional architecture supported by policy measures Co-existence and growth of both production-systems (village-based & scale-intensive) ▫ 80 % of birds in China are local-type in rural-production system
2. Substantially increase public investments ▫ Provide for institutional development that overcomes disproportionately high transaction cost that small-holders face in securing quality input & market access
3. Create institutional mechanims for “skills infusion”
4. National Poultry Development Board (on the lines of NDDB, NFDB) – to create structured impetus, orchestrate PPP, leverage inherent strength & dynamism of sector
5. Missing “voice”: contributes (Rs.35000 crore) more than sugarcane (Rs.25,776 crore), 70 % of fisheries (Rs.49,891 crore) – absence of strong farmer lobbying
6. Processed Chicken– build missing infrastructure, rationalise taxation recognise challenge is both “category conversion” and “product”
7. Create and ground “poultry-centered diversified farming systems” – increase mean household income, reduced variability, smoothen lumpy farm income flows
8. Provide Insurance Cover – on lines of “live-stock insurance”
9. Poultry placed in OGL; retail boom – “priority procurement” [Thailand has standing policy]
10. Optimise production systems for in-accesible regions like NE – scarce feed,
11. indigenise feed resources reducing production cost
12. immediately drop the notification called ‘Prevention of Cruelty to Animals (egg-laying hens) Rules 2019
13. the government should allow import of feed ingredients such as maize, corn and medicines required by the sector without any restrictions on quantity, and make available sufficient and low cost finance with subsidies to construct warehouses, cold storage facilities to store eggs and poultry meat products.
14. Government of India to consider all poultry farming activities as ‘Agriculture’ under the Income Tax Ac
15.Allow table eggs to MDM & ANGANBADI
16..Fix MSP for eggs
17.Launch farmers friendly poultry schemes
Reference:On request
STRATEGIES TO COMBAT THE IMPACT OF COVID-19 ON POULTRY INDUSRYAND ROAD AHEAD
