Poultry Industry in India - An Overview

Chapter 3 Poultry Industry in India - An Overview 3.1. Introduction Economic development of India depends to a considerable extent, upon the development of Indian agriculture. About 64 per cent of the people are dependent on agriculture and allied activities. Agriculture and allied activities provide a major contribution to the country's national income. As a part of agriculture, livestock sector/ animal husbanchy plays an important role in the development of the economy. It offers throughout the year, irrespective of seasons, employment to agricultural labourers, small and marginal farmers. Further, it provides supplementary income to the rural households. Poultry farming is now recognised as one of the most suitable agro-industries in the world. It is an industry with lots of potential for intercropping from trees to other animal husbanchy activities. Poultry in the present scenario of India is a powerful tool to fight poverty by creating job opportunities for rural farm rs/ land less farmers or small to marginal landholders or weaker section of people in rural areas. It is one of the sources of getting cheap and easily accessible nutritious protein. Poultry farming is an ancestral small-scale agricultural operation in our country and from backyard practice; it has now developed as industry.

57 3.2. Poultry Farming The term 'poultry', though now exclusively used with reference to chicken breeding, is really a word that encompasses a wide number of avian species such as duck, turkey, geese and guinea fowl domesticated for economic purposes. The word 'Fowl' is used to refer to poultry in general and is used with reference to domestic chickens both hens and cocks. Young Student Encyclopaedia defines 'poultry': "Birds raised for their meat and eggs are called poultry, chickens, ducks, turkeys, geese, guinea fowl, pheasants and pigeons can all be poultry birds." 1 The Central Avian Research Institute, Izatnagar defined poultry operations as: - "(i) Purely breeding programmesbroilers, layers, (ii) Grand parent operations for broilers and layers, (iii) Hatcheries producing one-day old chicks of Grand parent, Parent and Commercial, (iv) Commercial farms producing eggs and broilers, and (v) Poultry operation also consists of breeding, hatching and producing eggs and chicks of other avian species like turkey, quails, ducks, guinea fowls etc. "2 The Working on a poultry unit depends on the type of poultry farm. On commercial point of view, the poultry farm can be divided into three types viz., Breeding farms, Broiler farms and Layer farm.

58 3.2.1. Breeding Farm (Production of Day-Old-Chicks) Breeding farm is meant for the only purpose of hatching and raising poultry for sale to other farmers. Breeding farms are also called hatcheries. 3.2.2. Broiler Farms (Production of Poultry Meat) The evolution of broiler fann is correlated with to trend for chicken meat production. Almost 86 per cent of all poultry meat is chicken meat and remaining percentage is contributed by the production of turkey, duck, goose meat and other kinds of poultry meat. Broiler birds are a young chicken reared for the purpose of meat production. Broiler birds has 1.5 to 2.0 kilogram's weight with tender meat, soft, smooth textured and flexible breast. It is also known as 'frayer. In broiler farms, farmers procure one-day-old chicks (broiler); reared up to the age of six weeks and finally disposed in the market. 3.2.3. Layer Farms (Production of Eggs) Layer farms are meant for the purpose of egg production. The layer birds produces eggs for a number of months up to the age of 20 months or less. Layer birds start production when they attain 22 weeks of age and it rises sharply, reaching a peak at about 32-35 weeks of age, and after that the same declines gradually. When the laying capacity of layer birds deteriorates, they are sold off for the purposes of meat. The system of poultry fanning can be. categorized into two types viz., free-range system and intensive system. The free-range system is. the traditional method of rearing birds in which the birds are finding its

59 own food and require no proper care and no proper time scheduling of food. It is also called 'Backyard System', followed by the household sector in the rural areas. When the poultry rearing is confined in particular area and well fed with proper balanced and timely diet is called as Confining poultry or Intensive system. In India, the commercial production of eggs (layer farm) and meat (Broiler farm) is conducted under the Intensive system. 3.3 Brief Historical Background of the Industry The history of poultry industry in India is of 5000 years old. There is no clear-cut evidence regarding the time first chicken captured and domesticated. An early written record is found in a Chinese Encyclopaedia compiled from ancient document, which reveals the fact that "fowls are creatures of the west". The Archaeological surveys indicate that fowls were domesticated in China as early as 1400 B.C.3 In India, reference to the existence of poultry farming is availed of Arthshastra of kautilya during the Mauryan Empire in 300 B.C. The seals and toys bearing the picture of fowls were excavated from Mohenzodaro, indicating that people of Indus valley knew fowl domestication. 4 Till the beginning of 19th century the fowl were maintained mainly for game of cock fighting and sacrificing to worship God and Goddess. It was in the early 19th century that chicken were raised for their fancy appearance, attractive body forms, plumage colour and comb type. Least attention was paid to their growth and egg production potential. During this period, the commercial poultry production was practically non-existent and poultry farming was limited to low productive domesticated fowls maintained under backyard system.

60 3.3.1.Development of Commercial Poultry Farming The real beginning of the commercial hatchery industry in modern times came in 1802 when Joseph. D. Wilson made the first long-distance shipment of baby chicks, sending them to Chicago. In the late 1890's,} :. there was a great developme_nt of poµltiy and egg-packing plants in the mid-western United States. The operators of these plants began storing eggs in refrigerated warehouses. In 1924, Prof. James G Halpin and coworkers at the University of Wisconsin announced the part vitamin D plays in the poultry ration. This knowledge brought about rapid development of the commercial feed industry. The 1940's saw the greatly expanded use of mechanical and labour-saving equipment in both the production and marketing fields. Multi-story poultry houses, radiant heat, caged hens; great strides in poultry disease control and prevention are just a few of many other developments in specialised poultry practices in the mid 20th century. The credit of the pioneering action of commercial poultry farming in India should be given to a few Christian missionary organisations and to some British people who brought some superior exotic breeds in the beginning of the 20th century for establishing their own poultry farm by crossing and improving the indigenous stock. The major step towards scientific poultry management in the country was the establishment of the Poultry Research Division at the Indian Veterinary Research Institute (IVRI) named as Imperial Veterinary Research Institute in March 1939. The farm was stocked with birds of exotic breeds and crossed type to improve egg production. The evolution of an effective vaccine against Ranikhet disease by the IVRI in 1942 and a number of poultry units were established by the Government. Because of these developments a number of model poultry farms were established in the forties by

61 different state Governments for demonstration, training and multiplication of improved poultry stock. During the Second World War, the demand of the army for egg and table birds increased to double the number. To meet this demand the military authorities set up a number of poultry farms with exotic stock. The cumulative effect of these different activities was of a greater appreciation by the Central and State Government regarding the possible advantages of poultry development. The demonstration and extension work carried out by different poultry farms created interest among farmers of localised rural areas in rearing poultry of superior quality as their subsidiary occupation for economic benefit. The production of broiler on a commercial scale commenced in the early sixties with the introduction of hybrid strains from poultry breeding farms in the United States, England and Europe. Sixties proved to be the turning point in the history of poultry production in the country. The concept of backyard poultry keeping shifted to poultry farming as commercial enterprise. First commercial chick was hatched in November 1962 at the Delhi-based Rani Shaver Poultry Breeding Farms Pvt. Ltd. Commercial Production of balanced compounded feed, modem veterinary medicines and vaccines, the indigenous production of equipment for hatching and incubation, feed mixing and commercial housing were also started at the same time. Introduction of Intensive Poultry Development Project (IPDP), deep litter system of management, import of high quality stock, mass preventive vaccination against common avian diseases, income tax exemption for the poultry sector were major contributing factors of this development. Under the IPDP, all the required inputs and services such as good quality birds and equipment, training of farmers, effective disease control measures and improved management know-how were made available to help farmers to start poultry units and provide facilities to

62 market their outputs with an assured and a reasonable profit. As a consequence of the concerted drive, poultry production started increasing and gaining momentum. Scientific poultry breeding programmes were launched during this period in the central poultry farms as the first step towards attaining self-sufficiency in the production and supply of high quality chicks. The training programme for the farmers was extended. Financial assistance for supply of poultry house materials and rearing equipment at concessional rates and subsidy for purchase of incubators were extended. To process a large number of broiler chicken quickly, several dressing plants of different capacities were established at various places. As the country made si gn ificant progress in poultry farming in the eighties the emphasis was generally laid on promoting poultry production mainly through the weaker sections of the people and bringing about qualitative improvement in the services required for poultry farming. Additional efforts were made in streamlining the infrastructure already developed. The history of the poultry farming in India reveals the fact that poultry husbandry is an old art. The story of the evolution and development of the poultry industry shows that poultry husbandry is comparatively a new science as it is only within the present century that special attention has been given to raising poultry as a commercial venture. 3.4. Production of Poultry Items The poultry industry is mainly concer.ned with the production of eggs and meat. Hence, it is quite relevant to examine the present position of production of eggs and poultry meat before going in to the other details of the industry.

63 3.4.1.World Production of Poultry Items The production of poultry meat and eggs has shown tremendous development in the last 20 years. As per the FAQ statistics the world poultry population, which stood at 10.6 million (Nos.) in 1990 increased to 14.4 million (Nos) in 2000. During 1981-90 the developing nations have shown an increased share in egg and chicken meat production in world's market, from 32.9 per cent to 64 per cent against developed nation. World production of eggs and broiler meat from 1997 to 2001 is furnished in Table 3.1. The world production of eggs, which stood at 666748 Million Nos. m 1997 in_creased to 795711 Million Nos. in 2001. Likewise, the production of broiler meat, which was 37018000 Metric Tonnes in 1997 increased to 47618000 Metric Tonnes in 2001. As per the data on 2001, China is the largest producer of eggs in the world accounting 48.88 per cent of the total production followed by the USA (10.68 per cent) and Japan (5.27 per cent). In the case of broiler production, USA is the largest producer in the world accounting 29.46 per cent of the total production followed by the European Union (14.32 per cent) and Brazil (13.79 per cent). In the case of egg production, the share of China was 42.34 per cent in 1997 and it increased to 48.88 per cent in 2001. The share of USA in the production of broiler meat was 33.13 per cent in 1997, but it reduced to 29.46 per cent in 2001.India is the fourth largest producer of eggs and got eighth largest producer of broiler in the world. The share of India in the world was 4.30 per cent in egg production and 1.42 per cent in broiler production in1997. It increased to 4.79 per cent in egg production in 2001. But, in the case of broiler production it decreased to 1.24 per cent in 2001.

Table 3.1.. 1998 Ell'lls. 1999 2000 200UPI Countries 1997 Eus Broiler Ell2'8 Broiler Broiler EllllS Broiler Eaz:rzs Broiler USA 77676 12266 79896 12525 82944 13703 84420 13703 85020 14033 (11.64) (33.13) (11.49) (31.13) (10.88) {31.56) {10.83) (29.92) (10.68) (29.46) Brazil 12596 4461 13636 4498 14768 5526 15654 5980 16435 6567 (1.88) (12.05) (1.96) (11.17) (1.94) (12.72) (2.01) (13.05) (2.06) (13.79) European 72701 4868 73993 6789 74831 6614 74921 6654 73835 6822 Union (10.90) (13.15) (10.64) (16.87) (9.81) (15.23) (9.61) (14.52) (9.28) (14.32) Russia 31900 * 33000 * 33000 * 33500 * 34200 * (4. 78) (4.74) (4.33) (4.30) (4.29) China 282350 5200 307760 3450 365300 4400 377420 5050 389000 5200 (42.34) (4.04) (44.26) (8.57) (47.93) (10.13) (48.44) (11.02) (48.88) (10.92) Mexico 28170 1493 29898 1587 32428 1784 33310 1936 33640 2067 (4.22) (4.03) (4.30) (3.94) (4.25) (4.10) (4.27) (4.22) (4.22) India 28690 526 29476 540 30629 559 31770 575 38115 595 (4.30) (1.42) (4.23) (1.34) (4.01) (1.28) (4.07) (1.25) (4.79) (1.24) Japan 42588 1124 42117 1097 41975 1078 41800 1091 42000 1074 (6.38) (3.03) (6.05) (2.72) (5.50) (2.48) (5.36) (2.38) (5.27) (2.25) Other 90027 7058 85505 9748 86202 10084 86830 10811 83466 11260 countries (13.50) (19.05) (12.29) (24.15) (11.31) (23.22) (11.14) (23.58) (10.48) (23.63) Total 666748 37018 695281 40234 762077 43412 778995 45800 795711 47618 (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00} (100.00} (100.00} *Included in the group of other countries. (P) Provisional Source: Counsellor and attache reports, official statistics and results of office research, United States Department of Agriculture, Foreign Agricultural Service Commodity and Marketing Programmes Dairy, livestock, and poultry Division Figures in parentheses are percentages of their respective totals (4.34) 64

65 3.4.2.Poultry Population in India The composition of poultry population in India includes fowls, ducks and other types of poultry such as turkey, geese and guinea fowl etc. The Table 3.2 furnishes the composition of poultry population of India as per the various censuses from the years 1977 to 1992. Table 3.2 Composition of Poultry Population of India as per Various Livestock Census (in Million Nos.) Composition 1977 1982 1987 1992 Compound of Poultry Growth Rate (%) Fowls 1493 1805 2510 2840 4.30 (92.91) (90.48) (91.17) (92.48) Ducks 101 177 235 221 5.30 (6.28) (8.87) (8.54) (7.20) Others 13 13 8 10-2.00 (0.81) (0.65) (0.29) (0.32) Total 1607 1995 2753 3071 4.41 (100.00) (100.00) (100.00) (100.00) Source: Statistical Pocket Book-India, 1999, Central statistical Organisation, Department of Statistics, Government of India Figures in parentheses are percentages of their respective totals The Table 3.2 reveals that India has witnessed significant growth in the poultry population over the 15 years under review. The poultry population which stood at 1607 Million (Nos) in 1977 has increased to 3071 Million (Nos) in 1992, recording a compound growth rate of 4.41 per cent. The composition of poultry population in 1992 shows that fowls constitutes a major share in the poultry population i.e., 92.48 per

66 cent of total poultry population. The ducks and other types of poultry share the remaining portion in the poultry population. The population of fowls in 1977 was 1493 Million (Nos), which increased to 2840 Million (Nos) in 1992, recording a compound growth rate of 4.30 per cent. In the case of ducks, the population 101 Million (Nos) in 1977, which increased to 221 Million (Nos) in 1992, showing a compound growth rate of 5.30 per cent. However, the population of other types of poultry shows a declining trend i.e., 13 Million (Nos) in 1977 reduced to 10 Million (Nos) in 1992. The details of state wise poultry population in India are furnished in the Table 3.3. In the case of poultry population as per the livestock census 1992, the state of Andra Pradesh ranked the first, accounting to 16.24 per cent of the total poultry population in the country. The percentage of the growth rate over the previous census is 27.76 in the state. The state of West Bengal ranks the second position. However, the state witnessed significant fall in the percentage share of population. It was 19.17 per cent (first rank) in 1987 census, but it got reduced to 12.18 per cent out of the total population in 1992. The percentage of growth rate in the previous census is -29.12 in the state. In the state of Kerala, the percentage share of poultry population, which stood at 6.53 per cent in 1987, increased to 8.35 per cent in 1992. In Tamil Nadu, the percentage share of poultry population, which stood at 7.83 in 1987 slightly increased to 7. 99 in 1992.

67 Table3.3 State-Wise Poultry Population in India as per 1987 and 1992 Livestock Censuses (in 1000 Nos.) State /Uts 1987 1992 % of increase over the Population %Share Population %Share prevoius census Andra Pradesh 39,045 14.18 49,884 16.24 27.76 Arunachal Pradesh 1,121 0.41 1,187 0.39 5.89 Assam 11,451 4.16 16,394 5.33 43.17 Bihar 15,880 5.77 17,655 5.74 11.18 Delhi 220 0.08 28 0.01-87.27 Goa 608 0.22 5,657 1.84 830.43 Gujarat 5,490 1.99 731 0.24-86.69 Haryana 5,336 1.94 8,578 2.19 60.76 Himachal Pradesh 753 0.27 725 0.23-3.72 Jammu & Kasmir 3,805 1.38 4,627 1.51 21.60 Karnataka 15,689 5.69 16,164 5.26 3.03 Kerala 17,993 6.53 25646 8.35 72.73 Madhya Pradesh 9,371 3.40 11,800 3.84 25.92 Maharashtra 24,828 9.02 32,.188 10.48 29.64 Manipur 3,018 1.09 3,259 1.06 7.98 Meghalaya 1,590 0.58 1,824 0.59 14.72 Mizoram 838 0.30 1,086 0.35 29.59 Nagaland 1,124 0.40 2,164 0.70 92.53 Orissa 12,597 4.57 13,062 4.25 3.69 Punjab 15,276 5.55 18,331 5.97 20 Rajasthan 2,605 0.95 3,053 0.99 17.20 Sikkim 254 0.09 302 0.09 18.90 TamilNadu 21,567_ 7.83 24,553 7.99 13.84 Tripura 1,865 0.67 2,597 0.84 39.24 Uttar Pradesh 9,317 3.38 10,790 3.51 15.81 West Bengal 52,781 19.17 37,407 12.18-29.12 Andaman & Nicobar 443 0.16 611 0.19 37.92 Chandigarh 169 0.06 180 0.06 6.50 Dadra & Nagar Haveli 100 0.04 117 0.04 1.17 Daman&Diu -- -- 27 0.01 -- Lakshadweep 51 0.02 61 0.02 19.61 Pondicherry 108 0.04 120 0.03 11.11 All India 275,293 100.00 307,069 100.00 11.54 Source: Source: Statistical Pocket Book- India 1999, Central statistical Organisation, Department of Statistics, Government of India Figures in parentheses are percentages of their respective totals Totals may not tally, as data relating to some states are not available.

68., 3.4.3.Production of Poultry Items in India The Table 3.4 exhibits the production of poultry items in India from the periods 1950-51 to 2001-02. Table 3.4 Production of Eggs (in Million Nos.) and Poultry Meat (in 1000 Metric Tonnes) in India Period Eggs Percentage Poultry Percentage increase over Meat increase over 10 years/ 10 years/ Annual growth Annual growth rate(%) rate(%) 1950-51 1832 -- NA - 1960-61 2881 57.26 81-1970-71 6172 114.23 121 49.38 1980-81 10060 62.99 179 47.93 1990-91 21100 109.74 412 130.16 1991-92 21980 4.17 440 7.00 1992-93 22930 4.32 427-2.95 1993-94 24170 5.41 454 6.32 1994-95 25980 7.49 468 3.08 1995-96 27200 4.70 479 2.35 1996-97 27500 1.10 -- 1997-98 28690 4.33 526 9.81 1998-99 29476 2.74 540 2.66 1999-2000 30629 3.91 559 3.52 2000-01 31770 3.72 575 2.86 2001-02* 38115 19.97 595 3.48 Compound Growth Rate(%) 6.10 4.98 *Provisional NA: Not Available 479 Source: Annual Reports, Department of Animal Husbandry & Dairying, Ministry of Agriculture, Government of India The Table 3.4 reveals that India has witnessed significant growth in the production of eggs and poultry meat from the period 1950-51 to 2001-02. The production of egg which stood at 1832 Million (Nos) in

69 1950-51 has increased to 38115 Million (Nos) in 2001-02, recording a compound growth rate of 6.10 per cent. In the case of poultry' meat production, which was 81000 metric tonnes in 1960-61, increased to 595000 metric tonnes in 2001-02 recording a compound growth rate of 4.98 per cent. The value of poultry items produced in India from the periods 1990-91 to 1999-2000 is furnished in Table 3.5. Table 3.5 Value of Poultry Items Produced in India (Rs. in Crores at Current Prices) Period Eggs Poultry Meat Total Value 1990-91 1,343 2,406 3,749 1991-92 1,736 3,165 4,901 1992-93 1,840 3,402 5,242 1993-94 2,282 4,486 6,768 1994-95 2,603 5,109 7,712 1995-96 2,834 5,846 8,680 1996-97 3,168 6,217 9,385 1997-98 3,419 6,916 10,335 1998-99 3,717 6,502 10,219 1999-2000 4,005 6,229 10,234 Compound Growth 12.90 11.10 11.80 Rate(%) Sources: Statistical Abstract of India - various issues, Central statistical Organisation, Department of Statistics, Government of India.

70 The total value of poultry items produced in India, which was Rs. 3749 crores in 1990-91 increased to Rs. 10,234 crores by 1999-2000, recording a compound growth rate of 11.80 per cent. In the case of value of eggs produced which was Rs. 1343 crores in 1990-91 increased to Rs. 4005 crores by 1999-2000; recording a compound growth rate of 12.90 per cent. The value of poultry meat increased from Rs. 2406 crores in199-91 to Rs. 6229 crores in 1999-2000. It recorded a compound growth rate of 11.10 per cent. The details of state-wise production of poultry items in India are furnished in Table 3.6. In the case of egg production during 1994-95, the state of Andra Pradesh ranked first accounting to 20.89 per cent of total production in the country. It slightly decreased to 20.09 per cent in 1998-1999. With the production of 5924 million eggs during 1998-99, Andra Pradesh accounts for one-fifth of the eggs production in the country. The per capita availability of eggs in Andra Pradesh is 58 eggs vis-a-vis 35 eggs for all India. The state of Tamil Nadu has second position accounting to 11.73 per cent of total production in the country in 1994-95, but it slightly increased to 12.17 per cent in 1998-99. Other leading states in the production of eggs in India during the year 1998-99 are Maharashtra (9.96 per cent), West Bengal (9 per cent) and Punjab (8.92 per cent). The percentage share of Kerala, which stood at 7.37 per cent in 1994-95, decreased to 6.93 per cent in 1998-99.

Table 3.6 State"Wise Production of Eggs in India (in Million Nos.) State I Uts 1994"95 1995-96 1996"97 1997-98 1998-99 Production %share Prodcution %share Production %sabre Production %share Production %share Andra Pradesh 5429 20.89 5435 19.98 5660 20.58 6020 20.98 5924 20.09 ArunachalPradesh 22 0.08 23 0.08 23 0.08 23 0.08 32 0.10 Assam 460 1.77 460 1.69 487 1.77 470 1.63 Bihar 1398 5.38 1398 5.13 1410 5.12 i 1400 4.87 1430 4.85 Goa 996 3.83 100 0.36 103 0.37 101 0.35 107 0.36 Gujarat 468 1.80 468 1.72 502 1.82 494 1.72 467 1.58 Haryana 633 2.43 634 2.33 644 2.34 632 2.20 683 2.31 Himachal Pradesh 66 0.25 67 f. 0.24 72 0.26 72 0.25 Jammu & Kasmir 318 1.22 318 1.16 396 1.44 382 1.33 520 1.76 Karnataka 1469 5.65 1470 5.40 1630 5.92 1558 5.43 1938 6.57 Kerala 1916 7.37 1987 7.30 2024 7.36 2033 7.09 2044 6.93 Madhya Pradesh 1145 4.40 1145 4.20 1250 4.54 1995 6.95 1400 4.74 Maharashtra 2501 9.62 2501 9.19 2687 9.77 2603 9.07 2938 9.96 Manipur 60 0.23 61 0.22 51 0.18 59 0.20 64 0.21 Meghalaya 75 0.28 75 0.27 80 0.29 77 0.26 82 0.27 Mizoram 19 0.07 20 0.07 20 0.07 19 0.06 33 0.11 Nagaland 44 0.16 45 0.16 46 0.16 45 0.15 48 0.16 71 485 77 1.64 0.26

State I Uts Orissa J----------- Punjab Rajasthan Sikkim Tamil Nadu f----------------- Tripura Uttar Pradesh West Bengal f------- Andaman & Nicobar Chandigarh Dadra & Nagar Haveli Daman& Diu Lakshadweep Pondichcrry All India Production 574 2438 417 15 3051 42 626 2500 52 33 7 3 4 10 25980 - --- - 1994-95 %share 2.20 9.38 1.60 0.05 11.73 0.16 2.40 9.62 0.20 0.12 0.02 0.01 0.01 0.03 100.00 1995-96 1996-97 Production %shnre l'roductlon %r.hare 574 2. 11 601 2.18 2438 8.96 2733 9.93 417 1.53 482 1.75 15 0.05 17 0.06 3048 11.21 3042 11.06 42 0.15 53 0.19 627 2.30 700 2.54 2500 9. 19 2600 9.45 33 0.12 31 0.11 7 0.02 5 0.01 4 0.01 4 0.01 5 0.02 7 0.02 5 0.01 5 0.01 10 0.03 8 0.02 27200 100.00 27500 100.00... =,..... Source: Statistical Abstract- Indi11 2001, Central 5tatl5tlc:al Organl5ation, Department of Statl5tlcs, Ouvernment of India. Totals may not tally, as data relating to some 11tates are not avalhtble. l11 oductlon 1997-98 '/or.bare 585 2.03 2510 8.74 430 1.49 16 - s- - 3217 10.62 44 0. 15 671-2.33 2568 8.95 35 0.12 4 0.01 3 0.01 7 0.02 s 0.01 7 0.02 28690 100.00 - -- - l'rodudlon 763 2630 534 16 3588 108 766 2653 52 17 1998m99 4 4. - -. -- -- --- --- - 6 9 29476 -. o/dbll'tl 2.S8 ---- - 8.92 1.81 0.05 12.17 0.36 2.59 9.00 0.17 0.01 0.01 -- -. - 0.01 0.01. ---- 0.03 100.00 - - 72

73 3.4.4.Per Capita Consumption of Poultry Items in India In India majority of the poultry items such as eggs and meat is marketed and consumed in fresh form. Poultry meat consumption constitutes around 22 per cent of the total meat consumption in the country. Egg powder manufacturers consume around 1 % of the total egg production in the country. There is wide gap existing between urban and vast rural areas in the consumption of poultry items. As per the report of Department of Animal Husbandry and Dairying, Government of India, the urban population accounts for around 75% of the total poultry consumption in the country. In urban areas, the per capita consumption is 100 eggs and 1200 gms of poultry meat per annum while in rural areas it is 15 eggs and 150gms per annum. The annual per capita consumption of poultry items in India from the period of 1961 to 2000 is depicted in the Table 3.7. Table 3.7 Annual Per Capita Consumption of Eggs and Poultry Meat in India Year Per Capita Availability Eggs (Nos.) Poultry Meat (gms) 1961 7 188 1971 10 220 1980 18 266 1985 23 365 1990 28 498 1995 29 546 2000 35 575 Source: Annual Reports, Department of Animal Husbandry & Dairying, Ministry of Agriculture, Government of India

74 In the case of annual per capita consumption of eggs and poultry meat in India during the year 2000 is around 35 eggs and 575 gms of poultry meat, which is far below the minimum nutritional standards as recommended by the WHO (180 eggs and 10.8 Kg meat per person per year). But, the country has made significant improvement in the consumption of poultry items over the past 40 years. In 1961, the per capita consumption of eggs and poultry m.eat was around 7 eggs and 188 gms of poultry meat increased to 35 eggs and 575 gms of poultry meat in 2000. 3.5. Marketing of Poultry Items The introduction of modern marketi11g in poultry industry gave emphasis on consumer-orientation and profitability of organisation as well. The significance of marketing in poultry further increased in view of the fact that the poultry products are perishable commodities and hence require a quick disposal. In the absence of proper marketing facilities, a high degree of wastages may be the fate of the producers of poultry products. The market for poultry items may be in the form of export or internal market. 3.5.1.World Export of Poultry Items Poultry items are one of the important items traded in the international market. Country-wise export of poultry items in the world market is given in Table 3.8.

Table 3.8. Country-wise Classification of Exporters of Eggs (in Million Nos.) and Broiler Meat (in 1000 Metric Tonnes) in the World Market Countries 1997 1988 1999 2000 2001(P) Broiler E22s Broiler E22s Broiler E22s Broiler Eees Broiler USA 2734 2116 2626 1978 1940 2080 2062 2231 2040 2521 (37.28) (45.00) (32.24) (40.50) (27.29) (40.48) (29.24) (39.81) (26.69) (44.96) E22s Brazil 20 650 7 594 24 750 30 893 (0.27) (13.82) (0.08) (12.16) (0.33) ( 14.59) (0.42) (15.93) (0.46) (22.13) European 1689 570 2618 788 2550 764 1903 762 2368 718 Union (23.03) (12.11) (32.15) (16.13) (35.87) (14.86) (26.98) (13.60) (30.99) (12.80) Thailand * 192 * 274 * 288 * 328 * 425 China 957 (4.08) (5.61) (5.85) (7.57) 350 868 323 (5.60) Canada (13.04) (10.65) (6.61) ( 10.88) (7.29) (13.95) (8.28) (13.55) (8.72) 323 56 367 53 454 47 600 55 650 69 India (4.40) 260 ( 1.19) 1 (4.50) 315 (1.08) 50 (6.38) 267 (0.91) 26 (8.50) 285 (0.98) 84 (8.50) 305 (1.23) * (7.44) 774 35 1241 375 984 464 1036 489 (3.54) (0.02) (3.86) (1.02) (3.75) (0.50) (1.49) (3.99) Other 1351 768 1312 824 1099 808 1187 696 1207 372 countries (18.42) (16.31) (16.11) (17.86) (15.46) (15.69) (16.83) (12.38) (15.79) (6.60) Total 7334 4703 8143 4884 7108 5138 7051 5603 7641 5607 (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) Source: Counsellor and attache reports, official statistics and results of office research, United States Department of Agriculture, Foreign Agricultural Service Commodity and Marketing Programmes Dairy, livestock, and poultry Division (P): Provisional. *Included in the group of 'Other countries'. Figures in parentheses are percentages of their respective totals. 75 (4.04)

76 In the case of export of eggs, USA is the largest exporter in the world market. However, its percentage share declined from 37.28 per cent in 1997 to 26.69 per cent in 2001. European Union ranks the... second accounting to the percentage share of 23.03 per cent in 1997, increased to 30. 99 per cent in 2001. India is also one of the exporters of poultry items, but the percentage share in the world market is very low. The percentage share of India in export of egg was 3.54 per cent in 1997, which slightly increased to 3.99 per cent in 2001. In the case of export of broiler meat also, USA is the largest exporter in the world market. Its percentage share was 45 per cent in 1997and slightly decreased to 44.96 per cent in 2001. Brazil ranks the second in the export of broiler meat, recording a significant increase in the percentage share of market. In 1997, its percentage share was only 13.82 per cent, but it increased to 22.13 per cent in 2001. The percentage share of India in broiler export is very negligible i.e. 0.02 per cent in 1997, which increased to 1.49 per cent in 2000. 3.5.2.Export of Poultry Items from India India has only marginal role in the highly competitive world of international trade of poultry. The export earnings from poultry are very low. The value of export of poultry item from India from 1991 to 2000 is presented in Table 3. 9.

77 Table 3.9 Value ofexport of Poultry Items from India (Value in $1000) Year Eggs Poultry Total Annual Growth Rate Meat Value oftotal Value (%) 1991 3659 188 3847 -- 1992 6057 29 6086 58.20 1993 2876 104 2980-51.03 1994 2079 53 2132-28.46 1995 4238 77 4315 102.39 1996 13036 3 13039 202.18 1997 13532 14 13546 3.89 1998 11973 41 12014-11.31 1999 9579 25 9604-20.06 2000 12741 93 12834 33.63 Compound 14.86-8.00 -- 14.34 Growth Rate (%) Sources: FAO Year Book 2001. The export of poultry items from India in terms of total value has shown significant increase from the year 1991 to 2000. The total value of export, which stood at $ 3847000 in 1991, has increased to $ 12834000 in 2000, recording a compound growth rate of 14.34 per cent. However, the annual growth rate in the total value of export shows a fluctuating - trend during the period. The highest annual growth rate is recorded (202.18 per cent) in 1996. The value of egg export also witnessed significant increase over the period. Its value of export, which stood at $

78 3659000 in 1991, has increased to $ 12741000 in 2000, recording a compound growth rate of 14.86 per cent. However, the value of poultry meat export shows significant fall from$ 188000 in 1991 to$ 93000 in 2000. 3.5.3.World Import of Poultry Items The Table 3.10 exhibits country-wise classification of import of poultry items in the world market. It (Table 3.10) reveals the major importing countries of eggs in the world market, Japan comes in the first position, accounting to 34.46 per cent of the total import during 1997, slightly increased to 35.57 per cent in2001. Hong Kong is the second largest importer of eggs accounting 29.47 per cent of total import in 1997, slightly decreased to 29.34 per cent in 2001. In the case of broiler meat import, Russia ranks the first, accounting to 27.21 per cent in 1997, increased to 29.17 per cent in 2001. Japan is the second major importer of broiler meat in the world market. Its percentage share was 11.67 per cent in 1997, which increased to 16.16 per cent in 2001. The percentage share of China, which stood at 17.58 per cent in 1997, declined to 10.77 per cent in 2001. Among the importing countries, India has only a negligible share in the import of eggs in the world market i.e. 0.53 per cent in 1997 slightly increased to 0.74 per cent in 2000.

Table 3.10 ' ', Countries 1997 1988 1999 2000 2001(P) Ee:es Broiler Ee:e:s Broiler Ee:e:s Broiler Broiler Eees Broiler Russia 50 1161 50 1020 50 930 70 (0.98) (27.21) (0.93) (28.69) (0.93) (23.33) (1.30) (23.40) (1.48) (29.17) Japan 1741 498 1700 590 1976 667 2030 721 1800 710 (34.46) (11.67) (31.93) (16.59) (37.03) (16.73) (37.73) (17.89) (35.57) (16.16) European 508 139 374 167 337 198 444 299 321 418 Union (10.05) (3.25) (7.02) (4.69) (6.31) (4.96) (8.25) (7.42) (6.34) (9.51) 409 E!!!!S 943 75 1281 Middle East * 406 * * 481 * 459 399 (9.51) (11.50) (12.06) (11.38) (11.88) China * 750 * 427 * 591 * 608 * 473 (17.58) (12.01) (14.82) (15.09) (10.77) Mexico 217 113 270 181 171 188 176 219 178 235 (4.29) (2.64) (5.07) (3.20) (4.71) (3.27) (3.51) (5.35) (5.09) Hong Kong 1489 815 1498 269 1506 391 1452 239 1485 234 (29.47) (19.10) (28.14) (7.56) (28.22) (9.80) (26.99) (5.93) (29.34) (5.32) India 27 -- 13 -- 136 -- 40 -- -- (0.53) (2.44) (2:54) (0.74) Canada 666 72 791 735 62 630 69 650 (13.18) (1.68) (14.86) (1.54) (1.55) (11.71) (1.71) (12.84) (1.66) Other Countries 218 312 467 437 252 478 336 472 391 445 ( 4.31) (7.32) (8.77) (12.28) (4.72) (11.98) (6.24) (11.71) (7.72) (10.13) Total 5051 4266 5323 3555 5336 3986 5379 4029 5060 4391 (100.00) (100.00) (100.00) {100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) Source: Counsellor and attache reports, official statistics and results of office research, United States Department of Agriculture, Foreign Agricultural Service Commodity and Marketing Programmes Dairy, livestock, and poultry Division. (P): Provisional. *Included in the group of 'Other countries'. Figures in parentheses are percentages of their respective totals. 55 (13.77) (5.43) 73 79

80 3.6. Changing Scenario in the Indian Poultry Industry During the last three decades, poultry has made great strides, and form a backyard activity, but now it has sprung up to Rs. 8000 crores industry and is expected to go up to Rs. 32000 crores by the year 2005. 5 This sector has been growing at an average rate of 8 per cent in egg production and about 15 per cent in broiler production. It is the fastest growing segment of the agricultural economy. The poultry industry in India is undergoing many changes. The important among them are briefly explained in the following pages. 3.6.l.Market IntegrationI Contract Farming Market integration is a kind of business, which appeared in the poultry farming in 1960's among the farmers in USA. In India, it emerged in the broiler farming business in the beginning of 1990's and popularised among the broiler farmers. In India, various big hatcheries and feed manufacturers are engaging contract-farming operation with broiler farmers... Under this system, the farming operation is carried out on the basis of a contract between farmer/grower., and firm. The firm may be independent contractor, large scale processors, feed company or other party. The contracting finn generally assumes most or all of the price risk in connection with marketing of the products produced by the farmer and provides the day-old-chicks, feed, medicine/veterinary care and supervision. The farmer has to provide the facilities of land, housing, equipment, fuel and power, labour and daily management of birds. As a return, the contracting firm will make payment in the form of commission to the farmer/grower on the basis of feed convertibility ratio or set amount per bird and incentive for better quality and weights of bird produced. The calculation of commission may include charges or deductions for mortality, condemnation, hauling charges and medicinal.

81 The market integrators can minimise the cost of production by way of self-owned infrastructure facilities of hatcheries, feed mixing unit and transportation system. They have wide area of marketing network and avoid unnecessary intermediaries in the marketing channel. The main advantages of this system are (1) guarantees regular returns to the farmers without bothering about the price fluctuation in the market (2) the amount of working capital required would be less and (3) reducing the risk and uncertainty in the farming operation. However, the market integration has the following drawbacks also viz., (1) affects the entrepreneurial ability and skill of the farmer for exploiting maximum return from business by way of risk bearing (2) low return on investment (3) inadequate amount of commission (4) exploiting farmers with terms and conditions of contract and (5) lack of feasibility for the small scale unit. 3.6.2.Globalisation and Poultry Liberalisation of the national economy under GATT has opened up opportunities and challenges for Indian poultry industry. The agricultural sector including poultry will have no legal and constitutional barriers of entry to India for any company in the world. With the implementation of GATT, the Government's subsidy programmes and Counter Veiling Duty (CVD) will also be forced to remove. The other side of the coin would be the entry of multinationals into the poultry industry. This brings in the concept of mergers, acquisitions, joint ventures and business alliance. India has already removed Quantitative Restrictions on import of frozen and cut chickens with effect from April 2000. Since, the Government of India has decided to lift the quantitative

82 restrictions on import of poultry products, the customs duty on import of poultry meat and meat preparations has increased from 35 per cent to 100 per cent. This action is taken by the Government as per the request of National Egg Coordination Committee (NECC) for the purpose of protecting the domestic poultry industry against uneven competition by developed countries. The liberalisation policy also permits import of grand parents and allowing substantial reduction in import duty. The import duty on all equipments; plant ai1d machinery; and specified capital goods for food processing including poultry has been brought down. It is hoped that under the above agreements, subsidies provided, by advanced countries will become much more competitive in the international market. 3.6.3.Export Potentials The poultry industry in India is capable for exporting the poultry items in the international market. The entire poultry export scenario is now shifting in favour of India's exports. At present, some of the major Tamil Nadu-based integrated poultry farms are capable of meeting the standards for the export of poultry product. Countries like West Asia, Russia, Hong Kong and Japan are potential markets for Indian poultry products. The wide spread foot and mouth disease (FMD) in European countries has resulted in many meat consuming countries like Iran, Russia, Iraq, Indonesia and China to consider India as an alternative market, since in India the outbreak of the disease is reported to be confmed only to certain states. Indian poultry industry has to search for facilities for observing Hazard Analysis and Critical Control Point (HACCP) to produce safe products for human consumption.

83 3.6.4.Automation in Poultry Management System With the sophistication and commercialisation of poultry and move towards, modem automatic systems have been introduced in poultry houses that would make routine operations lees dependent on manual labour and more on mechanization. A beginning has already been made in the field of automated watering, feeding and environment control system. The use of plastics in the manufacture of equipments has solved the maintenance problems. Improvements are taking place in hatching and incubation equipments;and computerised feed plant units. 3.6.S.Poultry Processing Industry In western countries, 100 per cent chicken is processed, out of which 80 per cent of this is sold as value-added products in the form of cut-portions and boneless, further processed and branded. The Venkateshwara Hatcheries Group set up the first poultry processing plant in India more than a decade ago, but still the processing industry continues to be at an infant stage. The development of modern poultry processing industry in the country is regarded as a major thrust area in the growth of broilers. In India about 550 million chickens are processed per annum. Today only two per cent of poultry is processed in modern plants. The trends in the market for poultry products in India attached more significance to the poultry processing industry in India. They are: -

84 1. Poultry meat is emerging as the most affordable and widely acceptable for non-vegetarians. 2. Eggs are widely being accepted by the vegetarians in their menu. 3. Fast food chains serving chicken- based recipes are adding to the growing demands of poultry products. 4. Demand for poultry products in rural areas is increasing as people have more purchasing power. The future of poultry processing in India is enormous, as it can target about 40 per cent of the urban and semi-urban population. The sector for egg processing has opened up new export avenues. India already has a plant for egg powder with small plant capacity in the Central Avian Research Institute (CARl), Izatnagar. Processing plant with modern technology will improve the product quality and food safety to consumers. More processing firms interested to enter into this sector for exploiting the domestic and export potentials in coming periods in the changing scenario of world export market. Many multinationals are investing in the projects in view of enormous growing potential in terms of population size of Indian market, changing eating habits and demand for hygienically produced safe products. The Venky's India Ltd planned to start Quick Service Restaurant (QSR). The plant for the boneless chicken, CfM (chicken-in-minutes) products and QSR products has a slaughtering capacity of 4,000 birds per hour. Agro Corpex India Ltd is to establish an egg washing, grading, packing and cold storage unit at a cost of Rs. 51.60 million at Hyderabad.

85 3.6.6.Poultry Technology Park The Punjab Agro Industries Corporation and private promoters have established India's first poultry technology park in the state of Punjab. The cost of the project is Rs.140 million and commenced the., operation by the end of the year 2002.. The poultry technology park have a hi-tech automatic feed mill with a capacity of 100 tonnes per day, a cold store with a storage capacity' of 50 million eggs, a poultry medicine unit, a hi-tech poultry equipment production unit, an egg grading and packing station. The parks has fully automatic feed mill with a capacity to produce 100 tons of poultry feed everyday. Liquid medicines, hi-tech poultry farming equipment, including automatic drinking nipples, feeding systems and environment control system are manufacturing in the poultry technology park. An exclusive focal point for poultry in the park is that it provides private entrepreneurs an opportunity to set up fully automated poultry farms. 3.6.7.Insurance Coverage on poultry In India, the Oriental Insurance Co. Ltd established insurance coverage on poultry in 1979. Diseases and natural calamities may affect poultry industrial growth, which may strike despite preventive measurers resulting in losses. A standardised comprehensive poultry insurance policy which provides indemnity against death of birds due to accident including fire, flood, cyclone/storm/earthquake, strike, riots or diseases contracted or occurring during the period of insurance. The insurance coverage is available to commercial layer, broiler chicks, parent stock and grandparent stock. However, the insurance scheme on poultry is not well established among the poultry farmers in the country.

86 3.7. Development of the Poultry Industry under the Five Year Plans In all the five year plans, efforts for the development of livestock was towards the qualitative and productivity improvement of cattle, sheep, pig and poultry to meet the requirement of milk, meat, eggs, etc; specific emphasis was given to build up infrastructure required for accelerating the production programmes adopting advanced techniques in animal husbandry practices. A modest beginning towards commercial poultry farming was made during the First Five Year Plan (1951-52 to 1955-56), in which Rs. 2.5 crores was spent on poultry development. For the purpose of supplying improved breeds of chicken to interested farmers, thirty-three Poultry Extension Centres were established during the period. During the Second Plan Period (1956-57 to 1960-61), projects were initiated to encourage both backyard poultry farming in rural areas and the commercial poultry farming in urban areas. Organised poultry development began during the Second Five year Plan, when systematic efforts were made to promote poultry farming on commercial lines in the country. To develop genetically the superior stocks imported from foreign countries, four Regional Poultry Breeding Farms were established during the period. As a result of these, poultry feed and equipment industries were getting established. Approximately Rs. 2.8 crores was spent on poultry development during the Second Five Year Plan.

87 During the Third Five Year Plan Period ( 1961-62 to 1965-66), Rs. 8 crores was allocated for poultry programmes, but only Rs.4.5 crore was spent. A favourable ground for launching bigger poultry plan was developed during the time and national and international agencies like the United States Agency for International Development (USAID), Applied Nutrition Programme, Freedom from Hunger Campaign, United Nations Development Programmes also helped to boost up the poultry development programmes in India. As, a result, four franchise hatcheries with foreign collaboration were set up. About 10,000 pure line chicks were imported from Australia. Large-scale poultry processing plants were set up in Poona and Chandigarh. All these developments led to a rapid increase in the number of commercial poultry farms with improved stock. During the Fourth Plan Period (1969-70 to 1973-74), major emphasis was laid on the expansion of poultry marketing facilities. Further, the Government permitted private sector to establish commercial hatcheries during this plan. An out lay of Rs. 115 million was provided in this plan for the development of industry. Agriculture Universities also played an important role by providing well-trained personnel for poultry extension and research work during this period. In the light of the above, during the Fifth and Sixth Five Year Plans (1975-76 to 1979-80 and 1981-81 to 1984-85), steps were taken to improve marketing facilities in order to raise egg production from 7,740 million eggs to 15,000 eggs through commercial poultry farming. The out lay for Fifth and Sixth Plan were Rs.355 million and 426 million respectively. During the fifth and sixth plan period, the egg production has made annual growth rate of 3.5 and 8.4 per cent.

88 During the Seventh Plan (1985-90) a sum of Rs. 602 million was provided, which shows an increase of 41.31 per cent than in the case of the Sixth Plans. During this period egg and broiler production registered a compound growth rate of 7.23 per cent and 18 per cent respectively. During the Eighth Five year plan (1992-97), the egg production which was at the level of 22 billion (Nos.) during 1991-92 increased to 28.2 billion (Nos.) during 1996-97.The p r capita availability of eggs increased from 25 to 30 eggs per annum for the same period. Poultry farming has been identified as one of the thrust areas for the Eighth Plan. The plan envisages an annual growth target of 7 per cent for eggs and 18-20 per cent for broilers. The actual annual growth rate of egg production was 4.58 per cent. The development of poultry farming on cooperative basis will be given priority to help small rural farmers in the unorganised sector. A number of poultry estates is also being planned to set up in collaboration with NCDC, NABARD, State Governments and Non-Government Organisations for providing all the necessary facilities, including inputs, credit and marketing. It is also proposed to set up a National Poultry Development Board to promote and coordinate various activities concerning poultry and export of its products. During the Ninth Plan (1997-2002), Animal Husbandry and Dairy development activities will receive greater attention, as this sector plays an important role in generating employment opportunities and supplementing the income of small and marginal farmers and land less labourers, especially in the rain fed and drought-prone areas. In order to achieve the objective of the Ninth Plan, the value of poultry products is targeted at annual growth rate of 7.5 per cent. The Plan for egg