India’s agriculture has been relatively spared during and now, the waning phase of the pandemic. With resilience and innovations stemming from private companies and timely support from the government the agri and allied industries have regained their economic foothold to a large extent. Yet, there are several gaps and inadequacies that continue to hold down the sector, more so, with regard to the poultry industry. While the industry is looking at scaling up domestic business and eyeing profitability of exports, the ground reality, unfortunately, seems to be out of sync with the expectations. We shall de-shell this conundrum faced by the poultry sector in India.
Poultry industry has been one of the fastest growing segments of the agriculture sector in India, providing livelihood to millions of citizens of the country. Between 2011 and 2020, the food grain output increased by 56 per cent, vegetable production increased by 104 percent, and egg production increased by 200 percent, whereas chicken production increased by five times.
The poultry industry has prospered owing to the unwavering resilience and persistence of the farmers and the industry; despite facing cycles of upheavals. Animal agriculture has provided 66 per cent of the GDP increase over the past decade. At the moment, agriculture accounts for 33 per cent of overall GDP, and this trend is estimated to witness further surge over the next decade.
Like any other sector, the poultry industry, too, has faced several challenges such as raw material price volatility, viruses, and so on. Some of these were successfully tackled with timely and concerted efforts of the industry and government. For instance, the Avian influenza, which has always been a cause for concern, causes morbidity and loss in poultry efficiency. Owing to this, the industry loses around 50-20,000 birds per year. This issue demands immediate intervention from the policymakers.
Unfortunately, only 5 per cent of the volume from the sector volumes value-added products which could, essentially, insulate the sector against the vagaries of costs, illnesses, among other limitations.
The Ministry of Food Processing Industries (MoFPI), at the central government level and food inspection authorities at the local level have started keeping track of eggs and chicken production in India, ensuring quality and nutrient value.
Poultry Production is divided into three segments; namely Layers, Broilers, and Backyard / Family Production (Both eggs and chicken).
Layers
Some 70 per cent of the layer birds are being raised in the states of Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Maharashtra in south and Haryana in the north of India.
Broilers
Feed 65 per cent and chicks 25 per cent account for 90 per cent of the broiler inputs and consolidation is being observed in the market. Smaller producers engage in ‘contract farming’.
Backyard production
At one time, 30 per cent of the eggs produced in India were produced in the backyards. Improved varieties of ‘Low technology input birds’, which are dual purpose, i.e., producing eggs and meat, are being bred in India for the purpose of backyard/family production.
Virus-free birds
Expressing concern on the absence of regulations and policy around livestock vaccination to save the poultry sector against viral disease and huge economic losses to poultry farmers, the All India Poultry Breeders Association (AIPBA) has recently urged the central government to allow manufacturing and vaccination of Low Pathogen Avian Influenza disease (LPAI H9N2) to the poultry livestock for safeguarding the economic losses and disease management of poultry birds. The association has written a letter to Union Minister of Fisheries, Animal Husbandry & Dairying Parshottam Rupala.
Low Pathogenic Avian Influenza (LPAI) Strain H9N2 was first observed in India in 2003 and has since then been prevalent. Many global companies are investing in research and development of poultry vaccines. Boehringer Ingelheim India has launched its poultry vaccine VAXXITEK HVT+IBD in May 2021. An innovative recombinant vaccine, VAXXITEK HVT+IBD is a single shot vaccine, ensuring life-long protection for all types of production chickens, namely broiler, layer and breeder.
Designed to build and strengthen a stronger immune foundation in poultry, the vaccine enables better flock health and performance. VAXXITEK HVT+IBD protects against two major immunosuppressive diseases – IBD (Infectious Bursal Disease) and Marek’s Disease, both of which are known to cause significant losses to poultry businesses. As the flagship poultry product of Boehringer Ingelheim, VAXXITEK HVT + IBD is the largest selling poultry vaccine globally in terms of revenue, contributing close to 26 per cent of sales in the poultry franchise globally. In India, the poultry vaccine market accounts for around $120 million.
Outdated tech
Poultry farmers in India are not following the international standards for production facilities and methodologies for poultry farming. A majority of the poultry farms in India are open buildings with no climate control or quarantine mechanisms in place, which exposes the birds to various climate variations as well as potential diseases and epidemics. Latest farming technologies such as climate controlled farm houses, automated feed lines, can help improve the productivity in Indian poultry farms.
Monumental gaps
More than 60 per cent of broiler birds produced in India are produced in 6 states (Andhra Pradesh, Telangana Karnataka, Maharashtra, Punjab and), similarly more than 60 per cent of eggs produced in India are produced in 6 states (Andhra Pradesh, Telangana Haryana, Maharashtra, Punjab and Tamil Nadu). Birds are currently transported alive between the states, which causes them to be transported in inhumane and sometimes unhygienic conditions. Many birds are killed during transport. Lack of dry processing and cold chain facilities make logistics difficult. In transportation of poultry produce there is no use of refrigerated trucks or specialized equipment for packing. Latest expertise in the field of cold chain can be of immense benefit to the Indian poultry farmer.
Vignesh Soundarajan, Executive Director, Suguna Foods, said, “Poultry industry is facing a lack of infrastructure for storage and transportation. With the broiler industry growing at 15 per cent per annum, there is a huge demand for broiler feed. Grain supply should be revamped to meet the demand. The waste disposal from the poultry market needs to be improved by introducing new waste management practices. There are very few trained professionals in the poultry sector. Some of the veterinary institutions can start special courses on poultry management to develop the interest among youngsters. This will encourage more people to understand the poultry farming methodologies and explore avenues that would be very beneficial.”
Volatile feed price
The Indian livestock sector currently contributes 25.6 per cent to the Agricultural GDP and 4.11 per cent to the National GDP which is far below the potential it holds. The poultry sector contributes Rs 1.3 lakh crore to the GDP. The poultry industry had run into losses of over Rs 26,000 crores in just three months in 2020 caused by wrongfully correlating spread of COVID-19 with the consumption of chicken. The nationwide supply chain and logistics logjam also contributed its fair share in this. This impacted not only the poultry industry but also other auxiliary industries, such as the livestock feed manufacturers. In addition, the prices of raw materials, primarily soya meal, have gone up in the past few months.
Soya meal, one of the main components of livestock feed having 30 per cent share in the feed composition, has witnessed a sudden hike in its price. The Indore market price of Soya meal 46 per cent protein during March 2020 was Rs 30,000 Ex-plant. The price currently has gone up to Rs 54,500 per MT Basic. As compared to previous year, the Soya meal price has increased by a whopping hike of 82 per cent. There is no particular reason for this type of abnormal price increase, as there are ample Soya stocks available in the market.
Taking note of the situation, the animal husbandry and Fisheries department, issued an office memorandum to the undersecretary of the Department of Commerce, recommending duty-free import of 12 lakh metric tonnes of soya meal to avoid further ramification of losses for the sector. This recommendation was in response to a request made by the industry, which had raised the issue early in April.
Amit Saraogi, Chairman, Managing Director, Anmol Feeds Pvt. Ltd. said, “The rising price of soya meal is impacting the price of the finished feed cost which has increased by 25 per cent overall for the past one year. The feed industry is unable to pass on this Soya price hike to the end consumer fearing loss of customer base and reduced feed demand which in turn is leading to loss for the feed manufacturers. The recommendation made by the Animal Husbandry and Fisheries department to import soya meal duty free is a welcome and much needed move. This will provide relief, not only to the poultry farmers and poultry industry at large, but also to other associated and auxiliary industries such as the feed manufacturers, and the end consumers. India’s poultry sector, valued at nearly Rs 90,000 crore, is going through a rough ride yet again, the third time in a space of 14 months. The duty free import of soya will bring down the price to nearly half of the current market rate.”
Upping the export game
The major input required for the growth of the poultry industry in India is the feed ingredients. Despite low labour costs, India is not a cost competitive market as we have one the highest feed cost per kg and in terms of poultry, approximately 80 per cent of the total cost accounts for the cost of feed. Because of this we are uncompetitive in the export market which is dominated by countries like Brazil, USA etc.
Suresh Chitturi, Chairman International Egg Commission and Managing Director, Srinivasa Farms said, “The cost of corn/ maize in Brazil and USA is 79 per cent and 48 per cent lower than that in India, respectively. Similarly, the cost of Soya in Brazil and USA is 67 per cent and 37 per cent lower than that in India, respectively. In view of this, the approval of the use of GM crops derived products as ingredients in poultry feed will go a long way in boosting the growth of poultry industry in India and make us competitive in the world market.”
The central government has initiated the profitable use of poultry waste under the Sustainable Alternative Towards Affordable Transportation (SATAT) scheme of the Ministry of Petroleum and Natural Gas (MoPNG). The production of poultry litter based Compressed Biogas (CBG), fertilizers and biodiesel are the ways to make poultry more profitable.
Profitable use of Poultry waste
December 2020, Hyderabad-based Solika Energy, a compressed Biogas company, backed by Srinivasa Hatcheries, has started its first poultry litter based Compressed Biogas (CBG) Project at Udityal Village, near Balanagar, Telangana.This 2.4 tonne per day capacity compressed biogas (CBG) project exclusively uses poultry litter as the raw material and is located next to a large commercial poultry farm with over 4.5 Lakh birds and all the raw material from the poultry sheds will be collected to generate biogas. In addition to CBG, this plant will also generate around 15 tonne of good quality organic manure as a by-product on a daily basis.
Professor A B Pandit, Vice-Chancellor, Institute of Chemical Technology Mumbai, along with his students, has developed a technology to convert the keratin waste to food for pets and fertilisers for plants. The novel technology is patented, easily scalable, environment-friendly, energy-efficient, and it will make amino acid-rich liquid fertilisers more economical as compared to currently marketed products. These wastes are dumped, buried, used for landfill, or incinerated, increasing environmental hazards, pollution, and threat to public health and increasing greenhouse gas emissions. These wastes are inexpensive sources of amino acids and protein, underlining their potential to be used as animal feed and fertiliser. Scientists are currently implementing this technology on a large scale in collaboration with Revoltech Technologies, Gujarat.
Woeful farm management
There are no quality standards in farm management in India, prescribed either by the Government or by self-regulating industry bodies. For the export market, APEDA has imposed strict quality standards and regular audits to ensure quality is maintained up to international standards. However, in the domestic market, there is a lack of comprehensive regulating authority to maintain hygiene in farms, processing and transportation. Licensing of farms is done on municipality level, who often lack the knowledge, expertise and human resources to strictly enforce quality standards. Europeans and the USA poultry industry have a lot to contribute to the Indian poultry industry in the form of training, best practices, skill development, among others.
Another issue is the absence of automation. Despite the fact that it is very cost-effective, collectively there are still implementation gaps which warrant attention.
While these shortcomings have persisted for a long time, the pandemic has served as an eye-opener for most of the industries, and poultry wasn’t deprived of it either. The greatest challenge at present is to its image. Poultry sector has faced onslaughts of various natures and has been engulfed in fear-mongering propaganda every time the country faces an epidemic — irrespective of the source and lack of a direct linkage to the business. Even before the country was affected by the first wave of the pandemic, the sector was hit with cases of bird-flu. While the sector was on a recovery path, it was hit by avian influenza, and then again due to the second wave of the pandemic. This has been a recurring pattern that has left farmers and industry stakeholders not only financially drained, but also with dwindling faith in their sustenance and dependence on their means of livelihoods.
It’s important not to be myopic while addressing these issues. And most definitely, it can’t be resolved through actions by a few players. In addition to the various measures to arrest the impact of such cyclical impediments, it is necessary to also launch a larger awareness campaign that quells all misinformation circling the sector.
Prashant Vatkar, CEO, Godrej Tyson Foods Ltd, opined, “The poultry industry has received a much-needed boost during the pandemic, and it needs to make judicious use of it. While chicken sales were suffering, demand for value-added goods such as processed, heat-and-eat chicken soared. People’s trust switched from out of home to in-home consumption. A major reason for the same was these products are prepared with the highest quality standards. To ensure the highest quality standards in taste, hygiene and health, reputed brands offered products which are frozen with the IQF or individually quick frozen technology. With IQF, there is minimal formation of ice crystals, which helps the product keep its texture until the first defrost. Thus, making frozen one of the best form of fresh.”
Moreover, as regulations have eased for home deliveries in various parts of the country, consumers have become more receptive to the idea of home-delivered poultry and meat products. This shift in preference will be beneficial to the industry. As delivery platforms and cloud kitchens gain market prominence, the consumption in the HoReCa segment too is expected to pick up. The industry is on the cusp of transformation. Chicken processors will shift their business focus towards becoming value-added processors before supplying to these platforms for delivery.
As a result, there are several opportunities in the poultry industry, which will continue to develop in the next ten years. Experts estimate that the poultry output will double by the next decade.
That said, the poultry industry’s exponential growth rests on multiple factors including – favourable polices, intervention for disease surveillance, drug residue and vaccine quality control, high grade poultry feed, Good Manufacturing Practices for compliance to WTO norms, and value addition, among others.
Dipti Barve
dipti.barve@mmactiv.com
