Introduction:
India’s poultry industry has witnessed substantial growth, ranking 8th in meat production and 3rd in egg production globally for the year 2022-23. Key players like Suguna Foods Limited and Venky’s India Limited, coupled with advancements in research from various institutions, have fuelled a 6.67% increase in egg production and a 5.13% growth in meat production. However, the gap between current production levels and the nutritional needs of the population reveals a significant opportunity for contractual poultry farming to address issues of malnutrition, unemployment, poverty, and food scarcity
Economics of Contractual Poultry Farming:
Contractual poultry farming operates on two levels. Companies such as Suguna Foods and Venky’s provide chicks, feed, and technical expertise, while farmers contribute land, equipment, management, and labour. Both free-range and conventional methods are employed, with chickens delivered as day-old chicks and grown for approximately 42 days. Horizontal integration involves the acquisition of companies within the same business line, fostering synergy and controlling market competition. Vertical integration sees firms merging and operating at different supply chain stages, promoting self-sufficiency. Parallel integration, or diversification, allows integrators to venture into allied industries, reducing production costs and generating additional revenue. The initial capital investment for poultry sheds varies based on size, with small, medium, and large units costing Rs. 4.1 lakh, Rs. 6.4 lakh, and Rs. 10.1 lakh, respectively. Companies bear the costs of chicks, feed, medicine, and vaccines, amounting to Rs. 3.9 lakh, Rs. 5.7 lakh, and Rs. 10.6 lakh for small, medium, and large units. Farmers cover variable and fixed costs, with the total cost for small, medium, and large units reaching Rs. 32,000, Rs. 43,200, and Rs. 75,400, respectively.
Advantages of Contractual Poultry Farming:
Contractual farmers receive proper nutrition, disease control programs, and transportation facilities. It contributes to poverty alleviation, increased family income, and food security, enabling India to export poultry products globally. Access to high-value supply chains benefits smallholders, providing specialized inputs and market outlets. Cold storage facilities create a domestic market for processed and value-added poultry products. Contracting mitigates production and price risks, with integrators sharing risks with farmers. Internal insurance mechanisms protect contract farmers from losses, fostering financial stability. NGOs leverage contractual farming to alleviate poverty among smallholders. Vertically integrated contract farming yields 1.7 times higher net returns compared to independent farming.
Disadvantages of Contractual Poultry Farming:
Delay in market age lifting increases feed consumption, impacting profit margins. Profit percentage is affected by payment delays, low prices, and quality-related rejections. Delays in input supply and high feed prices pose challenges. Delayed chick supply results in fewer batches per year, reducing income. High charges for veterinary services and tax deductions affect farmer profits.
Conclusion:
Contractual poultry farming in India presents a promising solution to poverty, malnutrition, and unemployment. While farmers benefit from financial stability, reduced risks, and assured income, challenges such as formalities, poor service, and high initial costs persist. Success in the poultry business lies in addressing feed costs, ensuring proper training, and promoting government initiatives like the National Egg Coordination Committee and NAFED. Contractual poultry farming has the potential to be a transformative force, bridging the gap between production and nutritional needs while uplifting farmers and communities across India.
(Courtesy: www.statista.com)