Development milestones in poultry
Indian broiler industry
Indian poultry industry
Future prospects of egg industry
Poultry situation in India
Problems of poultry industry
WTO impact on poultry
Project details in poultry
Development Milestones In Poultry
Industry during 50S
- A cottage / rural enterprise
- Government backed massive grading
program with supply of exotic cocks.
- Establishment of Government commercial
farms, lunching of IPDP (Integrated Poultry Development
- Support from world food programmes through
supply of grains
- Emergence of private sector hatcheries
- Setting up of various institutes
in the field of breeding and health
70s & 80s
- Emergence of farms
in the line with SSIs
- Liberalized loans
from banking sector
- Emergence of support
industries e.g. feed pharmaceuticals
- A shift from government
to private sector with ever increasing dedicated entrepreneurial
- Beginning of integrated approach
with entry of foreign technology
- Emergence of corporate
- Achievement of self-sufficiency
in breeding operation
- Emphasis on cost control
& efficiency through automation in operation
- Era of full-scale vertical integration
coupled with entry into export world.
Indian Broiler Industry
- Indian poultry industry
is a gamble on market price.
- The problems faced
by the broiler producer are many. They include higher cost
of production than the sales price for most part of the
year, variable demand for meat products, attitude of the
- The frequent and severe
fluctuations in sales price of broilers do not reflect in
the price to the end users. The annual per capita consumption
of chicken meat in India is less than a kilogram. The demand
for broiler meat is increasing with the emergence of nuclear
families with increased purchasing price and the shift in
consumer preference for broiler meat.
- In India less than
2% of the total broiler production is sold as processed
and packed poultry meat. Consumers prefer broiler processed
before them due to the availability of fresh chicken, lack
of awareness of the quality of processed chicken meat, and
unable to realize the hidden costs of feathers and offal
while purchasing the live poultry for processing before
- Export of poultry meat has tremendous
potential. The problems in export are the inadequate support
from the Government, international price structure, and
improvements required in technology of packaging, transportation
- Indian economy depends
on agriculture as about three fourths of the Indian population
thrive on agriculture and related activities.
- A concept towards
sustainable agriculture is being developed now. All along,
the base of Indian agriculture has centered on crop production.
- Poultry production
utilizes the resideus or by-proeducts of Indian agriculture,
which are unfit f
- or human consumption
and converts them to good nutritional poultry meat. The
broiler industry, which came into prominene in early between
farmers and professionals have been developed for the sustainable
poultry rearing activities. It is estimated that for every
1000 broiler birds sold per week there is an employment
potential for 15 persons and actually there is an additional
opportunity for 10% growth annually.
- Though poultry rearing seems to have
developed into a boom in recent years why many producers
are thrown out of the business? Let us examine the issues
Fixing Price of Bird
- It is said that Indian
agriculture is a gamble on monsoon.
- Likewise the Indian
poultry industry is a gamble on the market price.
- The concerned broiler
co-ordination committee in the particular region fixes the
price of the bird. The market demand is the major point
considered while fixing the price.
- The cut off price
for the farmer is the cost of production plus a small margin.
Many a times for more than half of the year the price fixed
would be lower than the cost of production.
- This situation when
continued, all farmers who can not afford to supply birds
at the price lower than the cut off price as demanded by
the market will be thrown out of the business and it affects
- Thus after every time
the selling price goes below the cost of production many
farmers are wiped out of the industry. The supply thus will
be lower than the demand and the price increases.
- This will attract
fresh batch of farmers who would like to invest in poultry
business and try to reap profits in the shortest possible
- Those farmers who
are out of business will also try their luck by recentering
into business. This will again lead to surplus production
and result in unremunerative price and cycle will continue.
- Moreover the varied customs and cultures
prevailing in India readjust the consumption of meat products
during certain days in a month and certain months in a year.
But the producers are unable to restrict their production
capacities during such periods due to technical reasons
and also for fear of loss of market share.
Attitude of Bankers
- Though crores of rupees
are invested in the industry the banking sector is skeptical
about the future of the industry and they always have a
second though to finance a poultry unit.
- At the same time other high risk
avenues are under the shelter of priority sector. The members
of the industry should join hand to represent our case strongly
so the poultry rearing may be looked at as a profitable
Exploitation by middleman
- As described above
there are frequent and severe fluctuations of the selling
price of live bird in the market.
- But it is interesting
to note that the price to the end users is not affected
much. It remains almost static throughout the year.
- Thus it shows that the middlemen
are benefited out of the fluctuation and to be more precise
are responsible for the wiping out of farmers from the industry.
Future for broiler industry
- Broiler industry in
India has got a bright future. The per capita consumption
of chicken meat in India is less than a kilogram which when
compared to other developed and developing countries is
very much meager.
- Emergence of nuclear
families with higher per capita income and increased purchasing
power will help in increasing the consumption of chicken
- We have witnessed
a shift in preference towards broiler poultry meat from
meat of other species of livestock. Thus the potential for
increase in demand is always there.
- But then also the
integrators with financial back up and high production capacities
are not able to influence the selling price either during
the high demand periods are during the low demand period,
- hereas the middlemen always enjoy
a cost plus benefit throughout the year. As producers we
have to take steps to stabilize the market price in such
a way that the price is always at least marginally above
the cost of production for most part of the year so that
more and more entrepreneurs are attracted towards the industry
and make India to move up the ladder as one of the largest
producers of broiler poultry meat.
About Proceed Chicken
- Chicken business in
India at consumer level is still at primitive stages. Consumers
seem to prefer only live bird from live bird shops, dressed
in their presence. Processed and packed poultry meat as
a commodity is yet to be accepted by the consumers.
- In India only less than 2% of the
total broiler production is sold as processed and packed
poultry meat. There are several factors for this.
Preference for "Fresh materials"
- Consumers especially
from south India are blessed with the presence of fertile
land, availability of rain and water streams, and seashore.
- These aid them to
enjoy availability of fresh seafood, vegetables etc. from
time immemorial. Availability of livestock and the support
from government for various livestock development programs
had helped in producing milk also in large quantities.
- Thus people have an affinity for
fresh food. This affinity has developed into apartheid against
the frozen food, whether it is meat or fish or vegetables.
In this part of the country frozen food is accepted only
at those places where fresh and items are not available
due to geographical reasons.
Lack of Awareness
- In the minds of the
consumers meat means the chunk of slaughtered goat or bullock
hanging at the meat shop which might have been slaughtered
in a clandestine manner.
- Still the customer
is happy to buy meat from the place because the meat shop
owner "processes" the meat in their presence and
they see that the meat is good. It is true in the case of
chicken meat also.
- The customer goes to any live bird
trader and the trader dresses the bird in their presence
and sells to them. Whatever a meat technologist has to say
about the quality of meat such processed the customer so
believes strongly that the meat dressed in his presence
is safer than what is coming from an organized processing
- The customer when
goes to a live bird trader the trader weighs the bird, dresses
the same and releases the price of the live bird plus the
- But he compares it
with the price of the meat from any processing plant, which
requires no further dressing, and no hidden costs are there.
- In the first place the customer is
playing for the feathers and other inedible portions but
the poor customer does not know the same.
- Processed and packed poultry meat is slightly
highly period than the meat from live bird processed before
- The high price speaks about the quality
and the processing. First unlike the dressing done by the
trader, processing is carried out in modern plants and second
the materials are subjected to freezing for which additional
expenditure will have to be made.
- The final product to reach the customer
refrigerated, transport is required to maintain the cold
chain, and in retail shops deep freezers are required.
- At the processing plants back up power
supply by using diesel generators are required to ensure
the freezing. Due to heavy capital investment in the form
of equipment and freezing facility the processors have to
operate at 100% capacities so as to break even.
- Any reduction in capacity utilization due
to erratic demand, the cost of processing will go up disproportionately.
All this, add to the price of the processed poultry meat
vis-à-vis that of the live bird. The housewife who
decides to buy the chicken from a shop makes a calculation
to see how much she saves if she buys a live bird from a
trader or processed meat from a supermarket or cold store.
- If only the difference is about one to
two rupees, she will prefer to buy the processed meat but
if the difference is wider she will definitely opt the other
one. Thus price has become the most critical factor affecting
the purchase decision of an average chicken customer, and
naturally due to value addition the processed poultry meat
from organized processing plants are sold at a price higher
than the live bird.
- This limits the sale of processed
meat from organized processing plants and that is why most
of the modern poultry processing units in India are becoming
- A mirage dream Exporting
of poultry meat has tremendous potential.
- But the price has
to match with international market. However there is a need
to improve the packaging, cold chain transportation and
preservation to meet international standards.
- The domestic market
has to be strengthened to make a profitable export. Fiscal
relief and incentives should back this up.
Import duties on poultry processing equipment should be
waived, low interest loans should be offered to activities
related to poultry processing and marketing, duty drawback
for poultry export as in the case of marine export etc.
may be considered for promoting the chicken export.
- When India produce quality product,
Indian producer can not complete with producers from Brazil,
America etc., as they are offering much lower price an international
market. Without support from the Government export is still
a dream as a mirage for the Indian producers.
- The broiler producers
should maintain their level of broiler production at par
with the market needs only.
- The year average prices
per kilogram of live broiler chicken should be maintained
between Rs.28.00 to Rs.30.00 ex farm gate.
- There should not be
much variation in the price levels throughout the year.
- The broiler producers
should avoid the mediators.
As long term measures, the integrators should try and reduce
their production costs and only when the production cost
per kilogram is brought to below Rs.25.00, any producer
can think of exports.
- Without limiting the
production cannot survive.
An Overview of Indian Poultry Industry
- Highest rate of population
- Highest density of
population (3.1 persons per hectare)
- Highest number of
unproductive animals (more than 50%)
- According to F AO
1996 Report the percentage of annual growth in egg and poultry
meat production in most of the South Asian countries is
higher than the world average.
- In spite of this,
the per capita consumption of eggs and poultry in South
Asia is much lower than the other Asian nations and the
world averages, indicating a greater need for expansion
of poultry in South Asian region.
- In this context, poultry
which is recognised as one of the important segments in
animal agriculture has a high potential to improve rural
incomes particularly in areas where soil and climatic conditions
are not conducive for remunerative crops.
- India today is the
world's largest and fastest growing market.
- We have 30 crores
plus affluent middle class.
- India has,
- Infrastructural facilities
- Cheap labour
- Managers and trained
- Large resources of
raw materials, and
- An easy communication
due to widespread use of English language among the educated.
- No doubt we have made rapid progress, but
among the major constraints on our march forward are the
marketing and availability of poultry feed ingredients.
- On the one hand we say with pride that
our layers are equal to the best in the world laying 280-
300 eggs a year and our broilers grow upto 1500 gills in
about 6 weeks.
- But is the farmer getting the right price
of his stock? The answer is a definite no and it applies
to both eggs and broilers.
In northern India the egg market is in the hands of about
half a dozen people who decide the egg rates on daily basis.
The wholesale rates fluctuate between 30 and 40% in the
course of 3-4 weeks and that too during the peak season
- The situation is worst with broiler sales.
- Our well bred healthy stocks are sold by
the most outdated and primitive method of auction with 'Kori'
as the unit.
When poultry birds are sold allover India, say allover the
world; by weight there is no reason why we should not say
good-bye to the primitive auction systems.
- Furthermore the farmer is not made on the
spot payments for the stocks sold, but is issued a post-dated
With this 'parchi' in hand the farmer goes from shop to
shop to buy his needs of day old chick, feed, vaccines and
- Is this 'parchi' a legal tender? Under
what law or authority these 'parchis' are being issued?
,If for some reason, which should not become a practices,
immediate payment cannot be made, a proper post dated cheque
can be made out and given; atleast cheque is a legal tender.
- We have banking facilities in the urban
and semi-urban areas around which our poultry farms are
- In very special cases cash payments can
also be made on the spot.
- PFI have been struggling for the last ten
years to end these mal-practices but of no avail.
- Sometimes it is the vote bank politics,
some times it is the strong lobby against any change, corruption
in administration and/ or money power which is at play.
- The solution are deferred and put in cold
- Another bottleneck is the shortage of feed
- If poultry has to keep its growth rate
of 10%in the egg market and 15% in the broiler market, it
will require about 8.5 million tonnes of maize by the year
- In contrast the total production of maize.
- ln the country during 1994-95 was 7.8 million
tonnes and maize is the biggest single component- 40- 50
percent of the total poultry feed.
- Some long-term strategies will have to
be evolved to overcome these shortages.
- Concentration of poultry in certain States/
pockets is another bottleneck.
- Our efforts should be to produce egg and
chicken near the consumption centres.
- Having huge quantities of eggs and chicken
to long distances, thus adding to the costs by way of freight,
packing, breakages, etc is not conducive to healthy growth.
- Consumer must get egg and chicken at the
minimum price in any case cheaper than the vegetables throughout
- Another step forward to bring stability
in the poultry market will be establishment of egg powder
plants and broiler processing plants on top priority.
- Somehow the progress on this front has
- We have very few broiler processing plants
and even those existing are running much below their capacity
and running into huge losses.
- Instead of encouraging establishment of
processing plants, the Government has levied excise duty
on the branded poultry products.
- Whereas 'Sweets' and 'Namkeens' have been
taken out of the excise drag I)et, chicken which is a healthy
food item has not been spared.
- Government will not get much revenue by
this levy, but it will prove to be a great disincentive.
- Another issue, which needs govt. intervention,
is the high rate of interest being charged from poultry
- Poultry business on the small/ medium scale
cannot afford to pay 18-22% interest on bank loans.
- Govt. is coming out with Insurance Scheme
for agricultural farmers in case of failure of crops.
- Lastly we strongly feel that it will be
a step in the right direction if we have a National Poultry
Development Board on the lines of the National Dairy Development
- The paper work in connection with the formation
of the Board has been completed and it is time we implement
- The proposed Board should function
under the professional management and should have representations
from all segments of the poultry industry.
Future Prospects of Egg Industry
- The egg industry in India grew at 7-8%
during the last two decades.
- The present per capita availability of
eggs is about 35.
- The potential for Indian layer industry
The hurdles for this are
- Egg distribution and
availability in rural areas,
- Price fluctuations
due to the present transportation in open condition to long
- Gap in producer price
and consumer price for eggs,
- Factors reducing egg
- Under developed, unorganized,
under invested, short slighted distribution system
- Mismatch between feed
price and egg price and
- Inadequate government effort.
Some changes desired
to come in the next decade for the growth of layer industry
- Increasing the availability of maize,
- Setting up of National Poultry Development
- Increasing egg consumption through Government
- Provision of infrastructural facilities
at new poultry production centers,
- Reducing challenges and hardships for egg
- Education of egg producers,
- Provision of low cholesterol eggs,
- Availability of eggs at super markets under
- Supply of pasteurized eggs / poultry
to bulk consumers.
- The egg is industry, in India, grew at
an average of 7% to 8% during the last two decades.
- The present per capita egg consumption
is about 35, while in the neighbouring countries it is about
- The potential for growth of Indian layer
industry should be bright if the requirement of neighboring
countries is taken as indicative for future trend in our
- In India human population is over 1000
million and geographically it is ideally located to cater
to the Middle East and Far East.
With WTO likely to come into effect soon, the subsidies
offered by developed countries should be slowly phased out
- India could improve its share in
world market for poultry products.
Hurdles to over come
However, there are few hurdles that
the industry has to over come before the potential could
be converted to growth.
- The egg distribution and availability till
now has come up only around the urban centers and vast areas
in rural India still remain untapped where 70% of the country's
- Over the last three
decades, layer farms came up in concentrated pockets while
consumption is all over the country. As a result, every
day eggs have to be transported to long distances taking
4 to 8days of transit time.
- As it is in open condition
and the temperatures and climatic conditions vary from season
to season and region to region, the eggs are at least 10
to 12 days old by the time they reach the consumption center.
- As it is without any
refrigeration, the shelf life will be maximum one week and
therefore, price fluctuations are substantial with even
minor changes demand and supply.
Gap in producer price and consumer price
The typical egg purchase is mostly
in small number and near home by the consumer. There is
practically no cold chain and the number of retail outlets
is too many warranting many intermediary channels thereby,
widening the gap between the producer prices to the ultimate
Factors reducing egg consumption
India is more of a continent than
a country with many religious beliefs and taboos. Egg
consumption is affected by seasons and festivals, which
vary from region to region. All through the year, at one
center or the other there is some factor affecting consumption
i.e. Ramanavami, Shravan, Ayyappa, Pithru Paksh, Summer,
School vacations, fish catch, etc.
Due to low trade margins and no
value addition i.e. no processing or grading, the distribution
system remained under-developed, unorganized, under-invested
and very short sighted.
Mismatch between feed price and egg price
Once in every 3 years, the industry
witnesses a mismatch between feed prices and egg prices,
though the industry has grown steadily, the availability
of feed ingredients, especially energy sources, remained
static resulting in periodical shortage and an abnormal
increase of its prices.
- The growth of industry till now has been
solely through a private effort and there has been very
limited involvement or received from Government in marketing
- Certain agencies like NECC, ACIL, etc.,
have actively worked for promotion of eggs and have reduced
- However, the industry requires special
efforts for promotion of eggs and in developing distribution
networks in various states like Bihar, Northeast, UP, MP
- Private entrepreneurs as the cost will
not undertake this and risks are high. Instead, the Governmental
agencies that already have a network establishment like
PDS, Mid-day meal scheme, Anganwadi etc., should be motivated
to take-up eggs along with other products. In the short-term,
many of the above challenges would continue affecting the
- However, in the long-term, the industry
would have to take steps or motivate agencies like NECC,
BEPA or Government and accelerate the infrastructure changes
required for ensuring a sustained growth of the industry.
Changes to come in the next decade
Some changes that should come about in
the next decade listed below.
Increased availability of maize
- The availability of Maize has to be increased
i.e., through introduction of high-yielding varieties and
more acreage under Rabi season. The poultry industry should
in consultation with Universities promote use of substitute
energy sources to reduce pressure on Maize.
- Further, whenever parity permits, import
of poultry ingredients should also be undertaken so as to
stabilize the prices.
- Some form of contract between Maize
farmers and poultry associations could also be established
for reducing the role of middlemen and to obtain uniform
prices throughout the year.
Setting up of national poultry development
- An organization like National Poultry
Development Board (NPDB) has to be set-up which would be
entrusted the job of the market intelligence for feed ingredients,
co-ordinate with State and Central authorities for having
policies benefiting the industry, build the necessary infrastructure
for dry and cold storage facilities for exports and rural
distribution and for promotion of eggs.
Governmental efforts to increase egg
- The consumption of eggs in rural
areas may be increased through governmental programs like
Mid-day meals, Anganwadis, Public distribution system, Social
welfare hostels, etc.
Provision of infrastructural facilities
at new production centers
- New production centers nearer consumption,
especially in states like Utter Pradesh, Bihar etc., would
come up in the coming years as a result of ever increasing
freight and packing costs.
- Various agencies connected to development
of poultry have to plan for the requisite facilities to
meet the future demand i.e. Feed industry, hatcheries, banks,
- Further the existing surplus centers
would have to identify new centers close to production,
especially in villages for increasing consumption and farms
have to improve their efficiency so as to survive in the
- The egg processing industry is currently
facing lot of challenges and hardships. However, with WTO
coming into effect and subsidies phased out, there would
be scope to tap the world market for egg powder.
Future demand for quality eggs
- As the consumer is becoming health
conscious, some changes shall come-up specially in urban
centers, such as (a) Demand for low cholesterol eggs like
Omega-3 eggs, (b) Graded eggs and sale through Super markets
under refrigerated condition and (c) Demand for pasteurized
eggs / powders from bulk users like Star hotels, Bakeries,
Biscuit manufacturers etc.
- While there is scope for egg industry to
grow, the challenges are many, which shall affect cyclically
in the short-term.
- However, in the long-term, with the consolidation
of capacities the economies of scale would necessitate farmers
invest in market development.
- India with a population of over one
1000 million and low per capita of 35 shall only grow in
the coming few decades.
Poultry situation in India
- India's Present Low Per Capita Consumption
Holds Promise For Future Growth Howwever, despite this phenomenal
growth, the per capita consumption of poultry products is
lowest in India even as compared to selected Asian countries,
let alone the Western world, as is clean from the following
table: Per Capital Poultry Meat Consumption In Selected
- Likewise, the overall poultry scenario
in India is dismal as compared to the world situation. The
following data proves this:
- WORLD & INDIAN POULTRY SITUATION, 1998
World Poultry Production 54,916,000 Tonnes India's Poultry
Production 595,000 Tonnes World Poultry Exports 5,750,407
Tonnes India's Poultry Exports 407 Tonnes Main Producing
countries USA(27%), China(22%), EU(15%), Brazil(8%) Main
Consuming countries USA(23%), China(22%), EU(14%), Brazil(7%)
India's Poultry Consumption 595,000 Tonnes Main Importing
countries FSU(18%), Hongkong(17%), China (15%) India's Poultry
Imports Nil Nevertheless, it is gratifying to note that
over the years there has been a definite and pronounced
shift in the market share of poultry meat in India, vis-à-vis
other meat, which the following table illustrates:
- MARKET SHARE OF VARIOUS MEATS IN TOTAL
PRODUCTION IN INDIA: Year Beaf & Veal Buffalo Meat Mutton
& Lamb Goat Meat Pork Meat Poultry Meat 1978 34% 34%
6% 12% 10% 4% 1988 33% 32% 5% 13% 10% 7% 1998 31% 31% 4&
10% 10% 13% The overall growth in the Indian poultry sector
is propelled through a compounded, annual growth rate of
10% in the case of egg production and about 15% in the case
of broiler production.
- Besides, Indian poultry sector provides
for 5 million jobs in the semi-urban and urban centres.
The poultry house litter accumulated over a period of 9
- 12 months is an excellent organic fertilizer for crop
- On an average, 40 birds reared on deep
litter for a year produce one tonne of manure, adequate
for one hectare of paddy or maize cultivation or two hectares
- By this standard, the poultry sector contributes
as much as around 20 million tones to the pool of organic
fertilizer, the vital agri-input. That is not the all.
- The poultry industry in India has remarkably
grown also in respect of poultry health care products, poultry
hygiene and sanitation, poultry equipment and other areas
of infrastructure, as also up stream and down stream projects,
such as poultry breeding and feeding, poultry processing
and other areas. With all these, the stage is well-set for
a sustained and all-round, rapid growth of the poultry and
industry in India.
Problems of Poultry Industry
Cull bird marketing
- Andhra Pradesh stands
first in layer population with 4 crores which is 1/3rd of
country's population. Hyderabad zone has 1.2 crore layers.
- The layers start production
from 20th week and they are kept till 72 weeks of age for
egg production and they are sold as cull birds.
- These cull birds are
sold on piece basis and their cost vary from Rs. 25-45 depending
on the season and demand.
- These cull birds are
mostly consumed by middle-class people, labour in cold mines
and in the border districts of Karnataka, Maharashtra and
Tamilnadu. The consumption of cull bird is gradually coming
down as the people are preferring tender broiler meat.
- The marketing of cull
birds is not very well organized and their price is often
decided by the particular day's demand and number of birds
offered for sale by the farmer on that day.
- Further, the cull
bird rates are not declared in newspapers. Farmers are not
aware of the market price of the cull bird and it is often
observed that cull birds are sold on different corners of
the city on the same day with a price difference of Rs.
2-10 per bird.
- Except Hyderabad zone and other parts
of A.P. in India the cull birds are sold on kg. basis, by
which farmers get fairly reasonable price without much exploitation
- In the existing system, traders always
demand lesser price saying that the particular farm birds
are weigh less when compared to other farms.
- Trader often stops the lifting of birds
in the middle and lifts the birds of other farmer saying
that the second farmer has offered less price for cull bird
as he has some disease or financial crisis.
- Traders say that a big farmer is selling
the big farmer is selling the big batch of 1-2 lac birds
in the next ten days, that's why the prices are low. So,
in the existing system, trader is exploiting the farmer
saying that there are lot of birds in the market without
proportionate demand, and he quotes less price.
- In the light of the
above information, A.P. Poultry Federation has decided to
coordinate with the farmers and traders and try to fix the
cull bird rate depending on the demand and supply basis
and declare the prices on weight basis in the newspapers
as we are already doing in the case of egg prices.
- For declaration of
prices, Federation is planning to gather/collect the information
regarding availability of cull birds and assess the demand
in Hyderabad zone and in surrounding zones where our birds
are going on weekly basis and declare the price in paper
WTO and impact of removal of quantitative
Restrictions on Indian Poultry Sector
- The Uruguay rounds
of trade negotiations were aimed at liberalising the world
trade environment and thereby providing improved market
access to the member countries.
- The World Trade Organisation
(WTO) since its establishment in 1995 has been enforcing
various agreements that were concluded in the Uruguay rounds.
- As a part of the agreement
on the market access the member countries have made offers
of reductions in the tariff and non-tariff barriers to trade.
- The implications of
these offers of trade liberalisation depend on the nature
of the reduction in the barriers, in the scope of the coverage
of the goods included in the offer package.
- There are 135 nations
who are presently members of WTO.
- In the Uruguay rounds,
all the GAT of member countries agreed to
- provide tariff liberalisation
on large number of commodities / items.
- Remove all types of
prohibitions or restrictions other than duties (i.e. tariff)
- For the tariff liberalisation
submitted to the WTO "offer rates", also called
"bound level" or "bound rate of duty".
- The member countries
are required to maintain the applied rate at or below the
India has agreed to make adjustments in the tariff rates
to the level of bound rates for more than 3,300 commodities.
- It has also agreed
to phase out quantitative restrictions on all commodities
except for around 600 commodities for security, religion,
health and other reasons by 2002 -3 as per the mutual agreement
with her major trading partners and WTO.
- Other member countries
of WTO have also taken steps for tariff liberalisation and
removal of quantitative restrictions.
- In fact, developed
countries had made similar commitments in earlier rounds
of multi-lateral trading arrangements.
- It was for the first
time that the developing country like India took part in
the tariff negotiations in Uruguay rounds.
- The main objective
of the tariff negotiations has been to enhance the market
- The underlying principal
of Uruguay rounds of agreements was to create a fair and
equitable multi-lateral trading agreements that leads to
development and increased income.
- These principals are
amplified further through specific provisions in various
individual agreements under WTO.
- Unlike most of the
countries of the world, India's import has been subject
to different types of quantitative restrictions.
- These restrictions
are in the form of non-automatic licences, import through
canalised agencies, special import licence (SIL) 1 actual
user criteria etc.
- These restrictions
are imposed because India presumes that it has unfavourable
position of balance of payment (BOP).
- In the early 1990s
and even earlier to that, India had serious balance of payment
- However, this has
declined significantly during the recent years.
- The article relating
to balance of payment mentions that a member country has
to publicly announce a time schedule for elimination of
- India presented a
case of time schedule of nine (09) years where Australia,
Canada, Japan, EU, New Zealand, Switzerland and the US had
objections to this -time schedule and brought the dispute
settlement proceedings against India, which India ultimately
- The dispute settlement
body of the WTO had adopted the panel and the subsequent
appellant body reports ruled out that India was not justified
in maintaining the QRs on balance of payment ground and
advised India to bring its measures in conformity with the
obligations under WTO.
- The panel and the
appellant body reports were adopted by the dispute settlement
body on 22nd September 1999.
- Pursuant to this,
India and the US entered into a bilateral agreement on 28th
December 1999 on the reasonable period of time for India
to implement the rulings and recommendations of dispute
- According to this,
the reasonable period of time given to India would expire
on 1 st of Apri12001.
- Further, the bilateral
agreement envisages that, out of 1429 tariff lines (out
of total 2714), on which quantitative restrictions are still
being maintained as on date by India on balance of payment
ground, on 714 tariff lines quantitative restrictions are
to be removed by 1st of April, 2000 and on the remaining
715 tariff lines by 1st of April, 2001.
- At present, these
items fall under the categories of restricted list, SIL
list and the canalised list.
- The significant number
of items from which quantitative restrictions will be removed
belongs to agriculture sector and the items pertaining to
poultry i.e., frozen and cut chicken which falls in the
restricted list for which the tariff have to be removed
by April, 2001, in any case.
- Once these quantitative
restrictions are removed, it will have a more serious impact
on the poultry sector.
- There have been reports
that once the imports are free and on the OGL without any
bound rates of tariff the poultry industry in India which
has grown with the efforts of millions of farmers', scientists
and visionaries like Late Padmashree Dr. B. V. Rao will
be destroyed in few days time by the multinational companies
operating in the chicken business.
- I would like to quote
a report from poultry and egg marketing magazine of September-
October'99 issue published from Washington and the news
item which reads as under, "Russia has purchased 54524.6
MT of US chicken leg quarters under USDA Food Aid Programme
when the bids were opened on August 16th by USDA Export
- The bids were awarded
to companies like AJC International, AP USA, Gold Crist,
Koch Foods, Perdue Farms, Sanderson Farms, Cellary Enterprises
and Tyson Foods.
- These contracts were
given at a price of 22.43 cents per pound to 25.42 cents
per pound making an average of US$ 550.2 per ton or 24.96
- If we take this price
at even 25 cents per pound which would mean 50 cents per
kg. and if converted into Indian Rupees, this means Rs 22
per kg. landed in Russia duly frozen, packed and delivered.
- Can you imagine a
situation where chicken legs dressed, packed, frozen lands
in Bombay, Hyderabad, Delhi and Madras at Rs 22 per kg.
and you can well imagine what will happen to your broiler
- The threat is real
and not imaginative.
- The poultry sector
in India has developed over four decades from a backyard
poultry and is an integral segment of the agriculture economy
which contributes over 11,000 crores to the GNP.
- This sector provides
direct and indirect employment to over 1.5 million people
basically in the rural areas and also plays a significant
role in our national effort to improve the nutritional,
health standards especially the weaker sections of the society
and helps in combating the malnutrition.
- The per capita consumption
of the eggs in the country is 36 eggs per annum and that
of chicken meat is 700 gms per annum.
- The National Institute
of Nutrition, an organ of Indian Council of Medical Research
recommends that every Indian should eat half an egg per
day and 11 kgs of chicken meat per annum to meet their nutritional
- By increasing the
per capita consumption by just one egg alone results in
the generation of 25,000 additional jobs and similarly an
increase in the consumption of 50 gms. of chicken meat per
capita results in the generation of 20,000 additional job
opportunities predominantly in the rural areas.
- The day when we reach
a figure of consumption of 180 eggs and 11 kgs. of chicken
meat per annum, this sector has a potential to provide additional
job opportunities to 7 million persons in the rural areas.
- In US, Europe and
other developed countries, the poultry farming is controlled
by few hundred people and the processing and distribution
by half a dozen companies in each country.
- A single company in
US by the name of Tyson Foods slaughters around 50 million
chicken per week and they have market share of 26 per cent
in the us market.
- For their own fads
and other reasons, the US and other developed countries
have promoted the breast meat, which they call the white
or lean meat whereas for them the leg meat is dark meat
and a by-product.
- They load their complete
margins of profit on the breast meat which is sold for around
US$ 2.76 per pound which comes to US$ 5.52 per kg. or Rs.
250 per kg. whereas, legs or leg quarters being considered
as a dark meat is thrown away at any price sometimes at
even less than 25 cents per pound.
- In India we do not
differentiate between leg and breast meat.
- Chicken is sold as
chicken which is available currently anywhere from Rs. 60-
65 per kg.
- Similarly, while the
eggs in the local markets, in Europe and USA are sold at
anywhere from Rs. 4Cto Rs.6 per egg these are dumped in
places like Dubai at little over a rupee.
- In addition to this,
these countries are giving huge subsidies to their exporters
in the form of export enhancement scheme in US and restitution
refund money scheme in EU whereas there is no subsidy on
exports or otherwise in India.
- The developed countries
therefore are able to export their products at throwaway
prices because the products they export are either surplus
production or they are by-products or they have the advantage
of huge subsidy they get from their respective governments
in different garbs.
- Therefore, if the
import of chicken and chicken products and eggs is allowed
into India, the survival of the whole industry would be
at great risk.
- In such a situation
more than 1.5 million farmers and their dependant families
will be without any livelihood, more than 11,000 crores
of investment in this sector will be destroyed and the industry
which has grown on its own for four decades with its own
genetic base will be eroded.
- Under these circumstances,
the Government should negotiate for a maximum bound rate
of 300 per cent as applicable for agricultural products
- I would also like
to quote a report on poultry and egg marketing published
from Seattle which gives the views of Dr Paul Aho, an Economist
and expert on Agri-Business, where he says that poultry
industry in the rest of the world feels threatened by cheap
leg quarters and it creates barriers for importation.
- If leg quarters were
somewhat higher in prices they would be less threatening
other countries and they would enjoy greater access.
- He further adds that
even in the US, the cheap prices of leg quarters actually
hinders their own marketability.
- "Americans need
to be sold more dark meat", he said, ''as the demand
of the dark meat in the US rises it has a . possibility
of creating a virtuous cycle."
- Moreover, the Indian
poultry sector is going to face an uneven competition because
of several factors, which do not provide us a level playing
- It is also a reality
which we should not forget that all countries protect their
agriculture and allied sectors like poultry in the garb
of different agreements and their implications.
- In some places it
is the sanitary and phyto-sanitary measures and in other
places it is the technical barriers of trade which hamper
us to compete with the developed world.
- Though, it is clearly
mentioned in the SPS and TBT Agreements that members shall
take account of the special needs of the developing country
members and in particular of the least developed country
- Likewise, agreement
on technical barriers of trade also provides for a differential
and more favourable treatment to developing country members
and stipulates further that members shall in the preparation
of application of technical regulations, standards and conformity
assessment procedures, take account of special developments,
financial and trade needs of developing country members,
with a view to ensuring that such technical regulations,
standards and conformity assessment procedures do not create
unnecessary obstacles to exports from developing countries.
- But here again, we
continue to observe the impositions of standards by developed
countries, that are either beyond the technical competence
of the developing countries or do not take into account
the special developments, financial and trade needs of developing
countries or fundamental climate or geographical factors
or the fundamental technical problems of the developing
countries. We also do not see a corresponding willingness
on the part of the developed countries to transfer to the
developing countries better and more advanced technologies
at a fair reasonable cost.
- The agreements on
technical barriers of trade and sanitary and phyto-sanitary
measures are not implemented in their real sense and the
developing countries like India are put to disadvantage.
- Since ~standards are
emerging as one of the major long-tariff barriers to the
market access of the developing countries, it has become
the -light of the might to dictate to the others lOW they
can stop the other person from asking advantage of the market
access in the other countries.
- The whole egg powder
processing industry has faced these barriers and still are
facing because of the new standards being introduced or
upgraded, all of a sudden.
- It would not be out
of place to mention that some of the countries do not adhere
themselves to these standards what they have documented
- But in -reality their
strong point is that they have documented them so well and
their presentation is excellent whenever you question them.
- Under the TBT Agreement
the three basic needs should be kept in mind:
- Participation of the
developing :countries in the setting up of standards for
International Standard Setting Organisations.
- Technical cooperation
to upgrade conformity assessment procedures in developing
countries to gain their acceptance in the developed market.
- Mutual recognition
of agreements between the national standard setting bodies
and also providing equivalence of standards for each other.
- I would like to illustrate
this that if we have to export our egg powder or chicken
products to other countries, we first need to get the country
approved as such and also seek equivalence for our standards.
- Thereafter, the importing
country team will visit our plants and approve them whether
we really meet their standards or not.
- Why such a condition
cannot be placed on the countries which intend or would
export their poultry products to India ?
- Why we cannot put
a condition that our team will visit their plants and if
satisfied for scientific and technical reasons, only then
the import will be allowed into India.
- I think the Government
need to look very seriously in this direction because other
countries have been creating the barriers in the garb of
SPS and TBT Agreements.
- It is also a reality
that in developed countries the industry gets financial
support on 4 to 5 per cent interest rate and power is available
in plenty and at a cheaper rate as compared to India.
- I would not hesitate
to say that in India finance is extremely costly which you
get at a rate of 14 to 16 per cent for agriculture, power
first of all is scarcely available and if available is very
costly and same is the case with infrastructure facilities.
Now where is the level playing field for the Indian poultry
sector as compared to the developed countries.
Therefore, it is essential that while we frame our policies
the Government should give a serious thought before deciding
any policy on the removal of QR's by putting sufficient
bound rates for the products covered in poultry sector.
- It would be prudent
for the policy makers to defend the gains of the poultry
sector which it has made and the tremendous contributions
it is making to the rural development, employment generation
and providing nutritional food to millions of people.
The basic objective of the WTO agreement on agriculture
was to bring about a discipline in one of the most distorted
sectors of trade by disciplining the unrestricted use of
production and export subsidies as well as by reducing import
barriers including non- tariff barriers.
- At the same time,
as indicated in the preamble, the agreement recognised the
importance of non-trade concerns including that of food
security and rural employment.
- This is completely
true in India where 66 per cent of population of about one
billion is dependent on agriculture sector for its livelihood.
- Moreover, a population
of about 320 million is surviving just around the poverty
- Therefore, countries
like India where large population is dependant on agriculture
sector including poultry, need to exert its right of certain
degree of autonomy and flexibility in determining their
domestic agriculture policies.
- It must also be recognised
that in countries where the main source of assured and entitlement
to food is food production, these either in the form of
subsistence farming or through generation of farming comes,
the import of food cannot be an alternative to domestic
- Therefore, without
protecting the domestic sector, which is sensitive to fluctuations,
the opening up could have serious socio-economic ramifications
particularly on the rural farming community.
The developing countries with predominantly rural agrarian
economy should use appropriate measures and safeguard mechanism
to minimise the ill-effects of import which can destroy
our food security. It is, therefore, imperative that all
support wherein amber, blue or green box is brought out
to the common objective of present production value by the
developed nation apart from creating a level playing field.
- The huge amount of
export subsidy still continue to distort the world agriculture
trade which are given in the new garbs repeatedly by the
- It would be important
for Government to address issues related to circumvention
and rollover of export subsidies by the developed countries
during their negotiations.
- Last but not the least,
the Government has to give a very serious thought while
going for tariffication and bounding of poultry sector products.
- If the bound rates
are kept very low the poultry sector really faces a very
serious threat of its complete destruction.
- It would be, therefore,
prudent that while doing the tariffication maximum bound
rates should be worked out to protect this very important
rural based sector, which is very vital for the progress
of this nation.
- The project report
envisages 19758 commercial layers to be reared per year
- The rearing system is called 1+1+2 ·
- One brooding batch
of 10500 birds will be reared in deep litters for 9 weeks
- One growing batch
of 10185 birds will be reared in cages for 9 weeks ·
2 laying batches of 9879birds each I.E. total 19758 birds
will be reared in cages for 54 weeks.
- The starting date
of the layer farm is February, 98 · Statement No.
3 gives the sample flock schedule considered from the starting
date of purchase ·
- The egg production
is considered to be 300 per year and the average egg price
is assumed at 113 paise ·
- The culls will be
sold @ Rs. 34/- per bird ·
- The brooding period
mortality is 3%, the growing period mortality is 3% and
laying mortality is 7% ·
- The other income is
of gunny bags and manure ·
- The brooding feed
consumption is 0.30 kgs per bird @ Rs. 6.00 per kg ·
- The growing feed consumption
is 0.52 kgs per bird @ Rs. 5.25 per kg ·
- The laying feed consumption
is 0.80 kgs per bird @ Rs. 50.00 per kg ·
- Costs including the
purchase and sale prices are constant for preparation of
project report ·
- The project cost is Rs. 53.75 lakhs of
which Rs. 40.31 lakhs will be financed by the bank under
NABARD financing scheme ·
- The interest rate
on term loan is 16.50% ·
- Loan will be repaid
in 32 quarterly instalments starting from second year ·
- Administrative expenses
have been considered as 2% on total income ·
- 5% free chicks are
taken into consideration for calculating production of eggs,
feed and medicine cost, but are excluded in calculation
o chick cost.