<p> RLPS ASSIGNMENT </p><p>HOW FAT OUR CHICKENS ARE? A STATUS REPORT ON POULTRY INDUSTRY</p><p>SUBMITTED TO : PROF NIRAJ KUMAR</p><p>SUBMITTED BY : ANOOP JOHN PEERIS (09) & SUMANT DUBEY (45)</p><p>Contents</p><p>1. Indian Poultry Industry Through the ages</p><p>1 2. Present Scenario 3. Present Consumption 4. SWOT Analysis of Indian Poultry Industry</p><p>4.1. Strengths</p><p>4.2. Weaknesses</p><p>4.3. Opportunities of Growth</p><p>4.4. Threats</p><p>5. Latest Trends in Poultry Industry</p><p>5.1. Designer Eggs</p><p>5.1.a. Omega-3 eggs</p><p>5.1.b. Eggs with lower saturated fat and cholesterol</p><p>5.1.c. Cage-free or free-roaming eggs</p><p>5.1.d. Organic eggs</p><p>5.2. Computing poultry ration on day to day basis</p><p>6. Recommendations</p><p>7. References</p><p>8. Annexures</p><p>1. Indian Poultry Industry Through the ages:</p><p>2 Poultry is one of the fastest growing segments of the agricultural sector in India today. Driving this expansion are a combination of factors - growth in per capita income, a growing urban population and falling real poultry prices. Compared with meat, poultry industry has registered significant growth. India ranks fifth in the world with annual egg production of 1.61 million tones. Poultry exports are mostly to Maldives and Oman. Indian poultry meat products have good markets in Japan, Malaysia, Indonesia and Singapore.1</p><p>India has gifted the world the species Red jungle and Silver jungle fowls, out of whose progenies, domesticated and crossbreed have emerged the "Pure lines" of today. The history of poultry in India is about 5000 years old. But the strange paradox of this country is that although it introduced poultry to the world it itself remained indifferent to it for a long time. The main factor was religious taboo for poultry products in many Indian communities. But the total credit for developing the poultry in this country should go to the Christian Missionary Organization and some British people who brought some superior exotic breeds in beginning of 20th century. In 1950 the production of egg was only 1.8 billion eggs, in 1995 it was 27 billion eggs and in 2005 it is 42 billion eggs. The poultry industry can be classified into broiler industry and layer industry. Late Dr.B.V.Rao, called “Father of Modern Poultry in India”.Dr.B.V.Rao was instrumental in setting up the National Egg Coordination Committee in 1982,it is a charitable trust with 24 zones and 118 local committees has about 25,000 farmers as its members spread out all over India helping the layer farmers obtain reasonable, remunerative, viable price for eggs. Broiler industry is concerned with poultry meat and layer industry is concerned with egg production. BROMARK (Broiler marketing Cooperative Society): Bromark, also a brainchild of late Dr.B.V.Rao is an all India Broiler Farmers' Body registered under the Multi State Cooperative Societies Act in 1994. The objective of the Bromark is to ensure the gap between producers price and consumer price is reduced and promote the consumption of chicken meat by advertising on its nutritive value. </p><p>2. Present Scenario:</p><p>The poultry sector in India has undergone a paradigm shift in structure and operation. A significant feature of India's poultry industry has been its transformation from a mere backyard activity into a major commercial activity in just about four decades. This transformation has involved sizeable investments in breeding, hatching, rearing and processing. Farmers in India</p><p>1 http://www.agriculture-industry-india.com/agricultural-commodities/eggs.html</p><p>3 have moved from rearing non-descript birds to today rearing hybrids such as is Hyaline, lt is Shaver, ll and in Babcock, lt which ensure faster growth, good liveability, excellent feed conversion and high profits to the rearers. The industry has grown largely due to the initiative of private enterprise, minimal government intervention, considerable indigenous poultry genetics capabilities, and considerable support from the complementary veterinary health, poultry feed, poultry equipment, and poultry processing sectors. India is one of the few countries in the world that has put into place a sustained Specific Pathogen Free (SPF) egg production project.2</p><p>The output of eggs is increasing at the rate of 4-6 % and broiler at 8-10 % per annum. The per capita consumption is 36 eggs only and poultry meat is 850 gm against the recommended consumption of 180 eggs and 10.8 Kg poultry meat per person per annum as by the Nutritional Advisory Committee. More than 100 million people are employed in this industry. It accounts about 3 % of the total GNP and 10 % of the total GNP attributed to livestock products. This sector is growing rapidly at the rate of 15 to 20 % and it is about Rs 65 billion-mega industry. It accounts a turnover of more than Rs 95 billon at the retail level.3</p><p>But one very dark part of this industry is that it is dependent on imported pure-line and grand parents. The parents and commercial birds from these imported lines are multiplied in commercially run hatcheries.</p><p>3. Present Consumption:</p><p>In the domestic market the consumption of poultry meat is low due to many reasons; the main reason is the low purchasing power of people. Just just 25% population living in urban areas consumes about 75-80 % of eggs and poultry meat. The per capita consumption of egg is100 and poultry meat is 1.2 Kg per person per annum in urban areas. In rural area it is only 15 eggs and 0.15 Kg poultry meat.</p><p>Another important aspect of poultry development in India is the significant variation in the industry across regions. The four southern states - Andhra Pradesh, Karnataka, Kerala and Tamil</p><p>2 http://www.fao.org/WAIRDOCS/LEAD/X6170E/x6170e2k.htm 3http://www.poultrysolutions.com/knowledg/about/i_poultry.htm</p><p>4 Nadu - account for about 45 percent of the country's egg production, with a per capita consumption of 57 eggs and 0.5 kg. of broiler meat. The eastern and central regions of India account for about 20 percent of egg production, with a per capita consumption of 18 eggs and 0.13 kg. of broiler meat. The northern and western regions of the country record much higher figures than the eastern and central regions with respect to per capita availability of eggs and broiler meat. Graph 3[ see Annexure] shows egg production in India by region during 1992-93.</p><p>4. SWOT Analysis of Poultry Industry in India:</p><p>4.1 STRENGTHS</p><p>1. Fresh, chilled chicken availability in whole, cutups, de-boned, formed or in processed, further processed, ready to cook, ready to eat form. Product sales will expand but it is unlikely that the frozen segment will see big expansion. Contribute to promotion of consumption. This will widen the end product markets; take new concepts to existing consumption centers and lower consumer prices. 2. Increasing use of enzymes formulations and pro-biotic, higher off take and lower margins in vitamin formulations for feed use are very likely. 3. Costs will mean user prices will not be lower, perhaps marginally higher. 4. We will see surprisingly more successes than failures in end product distribution. 5. Rationalized pricing of breeder and commercial stock 6. From now and through the years up to 2010, India will see major changes in the way chicken is sold. Live chicken sales at retail level will continue to thrive, but the entry of bigger players in this segment will give it a big lift. Cleaner outlets, with emphasis on sanitation and hygiene, reduced contamination, and the use of small feathering plucking machines, accurate weighing machines will help cut out the image of chicken shops as dangerously dirty places to buy food. As more outlets of this type open, existing retailers will see sense and improve conditions of their own outlets. 7. Improved FCRs due to quality controls, upgraded, more efficient feed production by feed commoners. New feed milling technologies and equipment, bigger capacity mills (500 tones/day) and many more small feed mills (200 tones/day) will become necessary </p><p>5 8. Manufacturers in a single area may initially have to operate at below capacity, but in a short term will be able to gain business strengths and become viable. In the 5 years from 1999, feed manufacturing units will handle bigger than current volumes 9. Purchase terms of feed raw materials will ease and supply of better quality materials will be easier. No significant rise in commodity prices will occur in the months up to end March 1999, except for very brief periods if supply lines are interrupted. The first 10 years will be marked by steady (if not falling ) prices of cereals and oilseed extractions. Any short term prices rises that occur in 1999 will not translate into significant annual increase over average 1998 prices 10. Better breeding stock performance, improvements triggered by competition. 11. Broilers will reach newer consumption centers, either through food stores in chilled form or through superior, cleaner and hygienically-maintained live bird outlets. Such developments will reduce pressure on existing markets in the metros and improve trade relations. 12. Important for the layer segment would be emergence of competition in the breeder and commercial layer markets. 13. Stabilisation and re-emergence of the fledgling egg processing industry and resumption of egg product exports. 14. Feed units will open in areas where there are none, in existing poultry production regions and in upcoming ones. This will mean total feed output will go up. 15. Pelleted feeds will gain increasing market shares. 16. Restricted credit and better screening of feed distributors customers' credit worthiness will improve collections for feed sold and recovery of outstanding. 17. The feed additives and poultry health products business will register a steady growth. Lower tariffs will benefit importers but higher marketing Increasing use of enzymes and probiotics, higher offtake and lower margins in vitamin formulations for feed use are very likely for manufacturers and repackers. 18. Marketing of branded eggs in consumer packs would bring value addition and promote consumption. 19. Fewer players in the pharma-vet products and feed additives business will come with "me- too" products. 20. More utilization of eggs and chicken by catering establishments and by those manufacturing convenience foods. 21. Industry's ability to operate on even lower margins, bigger volumes, narrowing the farmer-to- consumer price gap. </p><p>6 22. Widening reach of wholesale egg trade and distribution network and retail sales. 23. Positive role of integrators and corporates in promoting live and fresh chilled chicken sales at retail and institutional levels will give more strength to the industry. </p><p>4.2 WEAKNESSES</p><p>1. Lower feeding stuffs prices and improved availability consequent to higher domestic production, falling exports and imports of raw materials 2. Lower bad debts and write-offs will offset higher energy and labor costs 3. Positive and negative impact of fewer but bigger operators at breeder and commercial levels </p><p>4.3 OPPORTUNITIES OF GROWTH</p><p>The first opportunity that was created in July 1991 when devaluation of the rupee and subsequently full conversion of rupee was done, which put India on a relatively competitive front. </p><p>1. Eighty percent of Indian population is non-vegetarian as per a survey by Anthropology Survey of India. Moreover poultry has no religious sentiments. 2. Government policies relating to investments in poultry and ancillary industries, taxation, import duties, excise levies are positive 3. Increase in income generation vis-à-vis purchasing power in the rural poor and marginal farmers. Thus increase of demand in domestic market and also due to conversion from vegetarianism. 4. Consumer awareness, perception and acceptability of eggs and chicken as healthy food is increasing 5. As per experts the value added poultry products will have high demand and also increase consumer acceptance in coming days. 6. The National Egg Coordination Committee has plans to raise the per capita consumption of eggs in India to180 by 2015. 7. The country has developed strong research and development network to provide necessary support. The Indian Council of Agricultural Research is the nodal organization for agricultural research in the country is playing vital role. It undertakes research in its own institutes Central Avian Research Institute, Izatnagar and Project Directorate on</p><p>7 Poultry Hyderabad and also in state agricultural universities through All India Coordinated Research Projects and Cess Fund Projects. 8. Many countries, which are non-traditional poultry growers, are giving incentives to their poultry industry thus the global demand is increasing. 9. Concept of organic chicken – as in India chicken is traditionally raised in backyards and is called "free range birds". 10. We export about 24 million tons of soybean cake to Europe. So instead of exporting cake we can export eggs there. 11. Indian eggs are cheapest in the world market 50cents a Kg. 12. India is gifted with natural sunshine, cultivable land and sufficient rains. Even by providing water to the land we can make poultry feed for the whole world. 13. A study on Indian Food Industry done by the CII and McKinsey predicted that Indian poultry sector has growth potential of 20% per annum and has set a target of Rs 4,80,000 crores a year by 2005. 14. The potential is so huge that if the per capita consumption is increased by one egg or about 50 gm of poultry meat can create employment for about 25000 people. (Source: The Hindu Survey of Indian Agriculture, 2000). 15. The poultry business gives quick turnover the growth cycle is very fast only 45 days. It generates fast cash. So farmers can take interest in the business. 16. The cost of production of both eggs and chicken meat in India is less than the international prices. Thus it can get the chance of establishing itself in the world market. 17. The productivity is also as per USA (305 eggs per bird per year). In Namakkal region of Tamil Nadu it is 300per bird per year. 18. The pesticide and antibiotic residues in Indian poultry products are 0.15 ppm while the Global acceptance is only 0.3 ppm. 19. Although the global players are trying to import their products in India but Indians prefer fresh poultry products than imported frozen and chilled products. So imported products will find few takers. 20. Eggs and chicken meat are the cheapest sources of animal protein as compared to any other source. 21. General economic conditions and available disposable incomes. 22. Demand generated in the 12 to 24 age group has increased. </p><p>8 23. Competition following lifting of import trade controls and import duties under WTO obligations, arrival of bigger quantities of imported chicken and table eggs in the Indian market. 24. Increasing use of information technology, websites, and hot news via e-mail. </p><p>4.4 THREATS</p><p>1. Poor infrastructure for export is hindering the export of poultry products. 2. Competition from international players on opening up duty-free imports, lifting of trade barriers. 3. Lack of FDI in India in this sector and very less number of state of art processing plants and post harvest technology are available. 4. Increasing propaganda and demonstrations by organizations on promoting vegetarianism and Animal rights. 5. Occurrence of Salmonella and Cholesterol in poultry meat. 6. Many countries are dumping their poultry products i.e. exporting eggs at prices lower than production cost. 7. Many countries are protecting their poultry industry from foreign competition by protective measures like restricting imports, keeping egg prices at lower level etc. 8. Unavailability of breed, lack of integration, no link between consumer demand and need and leakage value are some limiting factors of poultry industry today. 9. Stiff competition from Sri Lanka, Pakistan, Brazil and France, all these countries provide subsidies, export incentives to exporters, and keep their price low. </p><p>5. Latest Trends in Poultry Sector:</p><p>5.1) Designer eggs: </p><p>One of the ways to market a new product is to change the old product. The contents of the chicken egg can be changed in such ways as to be more healthful and appealing to a segment of our consumers who are willing to pay for those changes in the egg. "Designer eggs" are those in which the content has been modified from the standard egg. There are various types of Designer eggs which are highly popular in western countries and in certain cities in India like Banglore (KOOL KOMESTIBLES PVT LTD).</p><p>9 5.1.a. Omega-3 eggs: The types of fatty acids found in the yolk of an egg are directly related to the types of fat fed to the chicken. Thus, adding products high in omega-3 fatty acids, such as flaxseed, marine algae, fish and fish oil, to chicken feed can increase the omega-3 fatty acid content in the egg yolk. Omega-3 fatty acids are important for optimal development of an infant's brain and eyes. These fats also have many other important benefits, including helping reduce one's risk of arteriosclerosis and stroke. Omega-3 fatty acid-enriched eggs taste and cook like other eggs, but typically have a darker yolk color</p><p>5.1.b. Eggs with lower saturated fat and cholesterol: Some designer egg manufacturers have focused on lowering the cholesterol and ratio of saturated to unsaturated fat in their eggs. This is generally done by feeding the chickens an all-vegetarian diet high in canola oil. To market a product as being lower in cholesterol or saturated fat, the product must have 25 percent less of the nutrient in question than the standard product. A large egg contains approximately 200-220 milligrams of cholesterol. </p><p>5.1.c. Cage-free or free-roaming eggs: The majority of commercial egg-laying chickens around the world are housed in cages. Caging hens reduces the spread of disease by separating birds from their feces, reduces that amount of dust and ammonia present in the hen house and reduces the amount of physical labor required to manage chickens and collect the eggs. However, this system can be viewed as being less humane to the chicken; therefore, there is a niche market for eggs produced by chickens raised in a cage-free or free-roaming system. Typically, birds raised in a cage-free or free-roaming system are kept inside and maintained on the floor of the poultry house. Only if the label says "free-range" can you expect that the chickens were allowed to graze or roam outdoors. India can trap this market since most of the poultry in India are free roaming birds.</p><p>5.1.d. Organic eggs: To be label as organically produced eggs, the eggs must be produced from hens that have been fed certified-organic feed produced without synthetic pesticides or herbicides, antibiotics or genetically-modified crops. In addition, synthetic pesticides cannot be used to control parasites that may affect the chicken. Typically, organic eggs also are produced from hens in cage-free systems .This market can also be tapped by Indian farmers.The cost incurred will be for labor and cost of labeling in India labor is cheap and Labeling can be done at a price of 5% of the total output by the nodal agency. </p><p>5.2) Computing poultry ration on day to day basis:</p><p>10 The feed cost constitutes about 80% of the total cost of production. Prices of feed have increased 40 % whereas the price of produce has increased only by 2-4 %. So in order to lower the price there is a unique method devised by Namakkal Hatcheries in Tamil Nadu .They compute the poultry feed by calculating DCP and TDN using the most cheaply available feed ingredients on day to day basis. So the cost of feed can be reduced drastically .For example if the relative price of maize has increased compared to yesterday they will replace maize with a comparatively cheaper cereal, but the final protein (DCP) and total nutrients (TDN)will be the same.</p><p>6. Recommendations:</p><p>1. As the poultry industry is among the fastest growing in the world, its potential to attract to big-time foreign investment is negligible and that is why it is necessary to change – it needs greater integration, better cost-effectiveness and improvement in the distribution. 2. There should be proper storage facility for maize as it is produced as rain-fed crop and therefore subjects to vagaries of monsoon. Maize production has not been able to keep pace with its consumption by animal feed sector. 3. The poultry companies have to encourage direct procurement of maize from the farmers by using contract farming, models that are currently use in oilseeds and wheat. 4. Indian poultry industry needs good branding system in order to increase the consumption of chicken. 5. More retail outlets, mass gathering and creating awareness home to home about the nutrient values of chicken and egg. 6. Reduce the feed cost by integration and even 50-paisa reduction per Kg of feed can make all the difference in the net realization. 7. Collection of reliable, updated statistics necessary for immediate and long term planning and thus help preventing surplus, shortages etc. 8. Develop mechanism to counter anti-meat lobbies. 9. Developing efficient, independent, authority for disease monitoring, biological quality control. </p><p>11 7. References:</p><p>1. http://www.poultrysolutions.com/knowledg/about/i_poultry.htm</p><p>2. www.mhr-viandes.com</p><p>3. www.poultrytimesofindia.com</p><p>4. www.financialexpress.com</p><p>5. www.thehindubusinessline.com</p><p>6. Chakrabarti, A. 2003. Hand Book Of Animal Husbandry, Kalyani Publishers.</p><p>7. http://www.poultrysolutions.com/knowledg/about/swot.htm#Strength</p><p>8. http://www.fao.org/WAIRDOCS/LEAD/X6170E/x6170e2k.htm</p><p>9. http://www.agriculture-industry-india.com/agricultural-commodities/eggs.html</p><p>10. www.blonnet.com/2004/02/06/stories/2004020600211100.htm</p><p>11. www.aponline.gov.in/quick%20links/vision2020/c12.pdf</p><p>12. www.ers.usda.gov/publications/WRS0403/WRS0403i.pdf</p><p>13. www.indiaagronet.com/indiaagronet/ poultry_management/Poultry_3.htm</p><p>8. Annexure:</p><p>Table 1 Future Projections (Source www.poultrysoutions.com)</p><p>Human Population in India 2000 2005 2010 00,000 00,000 00,000 1006,8 1082,2 1152,3 Table Egg Production (tones) 1,845,250 2,355,000 3,151,520</p><p>12 Table Egg Production (million no) 33,550 42,818 57,300 Per Capita Annual Egg Consumption(Kg / person) 1,833 2,176 2,735 Per Capita Annual Egg Consumption (No. of eggs) 33.32 39.56 49.73 Broiler Chicken Meat Production (000 tons)</p><p>Graph 1</p><p>Poultry sector size in major countries (2001)</p><p>18,000 16,000 14,000</p><p> s 12,000 n o t</p><p>10,000 0 0</p><p>0 8,000 , 1 6,000 4,000 2,000 0 United China EU-15 Brazil Mexico Thailand India Japan States</p><p>Production Consumption Imports Exports</p><p>Graph 2</p><p>Poultry sector growth rates in major countries</p><p>14%</p><p>) 12% 0 0</p><p>0 10% 2 - 0</p><p>9 8% 9 1 (</p><p>6% e t a r</p><p>4% h t</p><p> w 2% o r</p><p>G 0% United China EU-15 Brazil Mexico Thailand India Japan -2% States -4%</p><p>Production Consumption</p><p>Graph 3</p><p>13 Egg Production and Poultry in India 1998 – 2000</p><p>[ S o u r c e: .</p><p> http://www.fao.org/WAIRDOCS/LEAD/X6170E/x6170e2k.htm]</p><p>14</p>