How can India become Global Livestock Export Hub?
Sandeep Kumar Singh , CEO – Animal Feed, Godrej Agrovet on How do we build India as an export house in livestock space.
For any country to emerge as a major exporting hub in any sector, it is imperative to plug some fundamental systemic gaps before it can deliver on its potential. And this is the case of India’s livestock sector.
India has the largest population of livestock in the world and the sector is emerging as an increasingly significant contributor to the country’s agrarian economy. It accounts for more than quarter of its total agricultural GDP and supports the livelihoods of over 2/3rd of rural communities.
Growing at a CAGR of 8% from 2014-15 to 2020-21, the sector’s contribution to agriculture GVA at constant prices has increased from 24.3% to 30.%.1 Yet, with the sector’s productivity being among the lowest in the world, the share of livestock products exports in total agricultural exports is just 4.14%.
The productivity issue in front of us is due to several factors. Lack of investment in infrastructure and technology leading to lack of adherence to common global quality standards, the absence of a robust supply chain, and its largely disorganized nature.
However, let’s look at productivity first.
The productivity problem
As I already said earlier, India has the world’s largest population of livestock. But the sector’s productivity is lower than the global average. For instance, average animal productivity of cattle in India during 2019-20 was 1777 kg/animal per year as against the world average of 2699 kg/animal per year during 2019. This is on account of rapid urbanisation and shrinking land sizes that have led to shortages of dry fodder and green fodder.
Exacerbating the productivity problem is a lack of availability of pure, superior indigenous germ plasm, lack of adequate animal health services and disease outbreaks that render large numbers of livestock unfit for consumption or export.4
To improve productivity, therefore, the sector needs to focus on modernizing livestock farm practices, utilizing better animal genetics, and improving animal health.
It can explore avenues like crossbreeding. At the same time, it can work on enhancing the productivity of fodder per unit area, consider the use of waste lands to grow feed ingredients, evaluate the viability of using newer non-conventional feed ingredients and also prioritize eradicating economically important diseases.
Setting up quality standards
Another critical element to increase India’s pie in livestock export is quality. For the same, the need of an hour is to build production capabilities and lay down the quality standards which can ensure the production of export-quality livestock produce.
Take the dairy sector, for example – the industry has established robust quality checks and inspection processes for dairy exports. But there are lots of gaps in the pre-inspection procedures and overall testing. As a result, the amount of dairy that passes export quality checks is far lower than it could be.
A solution to this could be to identify and prioritise producers who are focused on exports and provide them with the necessary training and capacity building. At the same time, a number of small and mid-sized producers and co-operatives can be roped in to enhance exports through better access to information and training.
Equally crucial is the need to define a common quality standards architecture that is in sync with global norms and easily understood not just across India but around the world. We lose a lot of output that can be exported simply because of the many different standards that are at play leave global buyers confused. And it is herein that setting up a quality standard would aid India manage the trade imbalance and aid exchequer too.
Investment in technology and infrastructure
As per the survey conducted by the Confederation of Indian Industry (CII), over 60% of aquaculture farmers have adopted technology-driven practices, leading to an average increase in yield of 25-30% and a reduction in feed conversion ratios of 10-15%. With shrimp contributing ~70% of country’s seafood exports and over 90% of shrimp produced being exported, it is clearly visible that none of these sweeping changes that the livestock sector needs are possible without the right infrastructure and technology to enable them and ensure better quality.
Technology building needs to go hand-in-hand with infrastructure development. Today there’s a lot of focus on digitizing livestock farming and a lot being said about how technology like AI and predictive analytics can help boost farm productivity. But this digitisation is primarily sweeping the country’s farmlands, not its animal sheds.
Only 5.1% of households, for instance, have access to livestock-related updates and information. Therefore, educating livestock farmers on the use of technology, equipping them with that technology and using it as a backbone on which to build services is absolutely crucial to growing the sector and boosting its export potential.
Adoption of technology will drive better collaboration and more transparent information-sharing. By harnessing the power of solutions like the blockchain, it will also enable the setting up of a strong and efficient supply chain that can cater to both domestic consumption as well as exports.
Building a robust supply chain
India’s livestock supply chain is fragmented and a large reason for that is the unorganized nature of the sector. This fragmentation and lack of organisation limits its export potential. There is an absence of transparency, clarity on prices and the involvement of middle men.
Exacerbating this, is the lack of a properly functioning cold supply chain. India’s cold supply chain is still work in progress. This leads to the loss of tonnes of agricultural produce, meat products, dairy and seafood. The Food and Agriculture Organisation, estimates that a third of the food India produces, or 1.3 billion tonnes, is lost because of the lack of a cold supply chain every year.
Furthermore, the lack of technological intervention means in many cases there’s no end-to-end traceability. All of these factors, combined with the absence of a single standard, significantly limit the sector’s appeal to overseas buyers.
The government therefore needs to bring a degree of organisation to the entire agricultural supply chain, and not just the cold chain. By deploying AI, ML, IoT and other sensor technology, the sector can track and trace its products across the entire journey of its lifecycle. Another solution could be to involve credible private players. The supply chain is dominated by private enterprises, but many of them are fly-by-night operators. Incentivizing reputed, established private players to get involved will bring unprecedented transparency and accountability to the supply chain.
In conclusion, building India into an export hub for livestock will require a multi-faceted approach addressing challenges related to productivity, infrastructure, supply chain and standards.
If we can plug these gaps and tap into the global demand for livestock products, we can become a major player in the global livestock market. Both the government and the private sector have crucial roles to play in getting us there. But we need to act now because the potential is too big to miss out on.
