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Financing Small Holder Poultry Units Through Producers Society: Part II

Poultry is the fastest growing component of global meat production, consumption and trade, with developing and transition economies playing a leading role in the expansion. In addition to providing opportunities to increase poultry exports, rising poultry production spurs growth in global import demand for feeds and other inputs and in investment opportunities in these sectors.

In the South Asian context, assessments of the USDA  (2005) recounts India’s remarkable growth in poultry meat production, which grew about 6 percent annually during the 1980s, accelerating to 11 percent annually in the 1990s and nearly 19 percent during 1997-2002 largely due to growth in commercial poultry within states like Andhra Pradesh, Maharashtra, Punjab and Tamil Nadu.

In this multi-part series the author discusses the various models for financing small holder poultry units to make the achievements sustainable. minilogo_green

The small holder poultry unit: The small scale dimension of the poultry sector also provides rare and extremely promising opportunities for poverty reduction and women’s empowerment. The two distinct trends in poultry production (commercial and small scale) showcase both opportunities and challenges in the South Asian context and thus require careful analysis. Countries like India which has a large industrial poultry sector also showcases household poultry, finding special favour with the poor (landless, marginal and small farmers) and tribals, scheduled castes and other backward caste communities. This fact coupled with examples of millions of rural households having near zero assets and high livelihood vulnerabilities relying on backyard poultry production establishes the pro poor potential of small holder poultry. 

The conflict: The market and production context of poultry production has shown trends in commercialization over the last two decades. Rapid economic growth and urbanization has resulted in fast expansion of industrial large scale, vertically integrated, poultry production units. While opportunities have expanded for small scale poultry enterprises as well, given their increased market orientation; the overall sector changes have brought large and small production systems in overlapping competitive spaces with each other. These changes have raised concerns about the sustainability of small scale poultry production systems due to i) intensified competition from large scale producers who can exercise significant control over the poultry value chain (including concentrated holding of genetic stock of industrial poultry by a few multinational corporations), and ii) the public perception that small units of production may be dangerous reservoirs of diseases, specially in the wake of recent outbreaks of HPAI

It is thus clear for example that despite India’s world ranking as 5th in egg production and 18th in broiler production, the significant contribution that poultry could have made to pro poor livelihood improvement has yet not been realised. minilogo_green

To be continued …

Financing Small Holder Poultry Units Through Producers Society: Part I

Poultry is the fastest growing component of global meat production, consumption and trade, with developing and transition economies playing a leading role in the expansion. In addition to providing opportunities to increase poultry exports, rising poultry production spurs growth in global import demand for feeds and other inputs and in investment opportunities in these sectors.

In the South Asian context, assessments of the USDA  (2005) recounts India’s remarkable growth in poultry meat production, which grew about 6 percent annually during the 1980s, accelerating to 11 percent annually in the 1990s and nearly 19 percent during 1997-2002 largely due to growth in commercial poultry within states like Andhra Pradesh, Maharashtra, Punjab and Tamil Nadu.

In this multi-part series the author discusses the various models for financing small holder poultry units to make the achievements sustainable. minilogo_green

The sector: India is the fifth largest producer of poultry meat in the world after USA, China, Brazil and Mexico (Executive guide, 2006). Poultry meat production increased from 81 thousand tonnes in 1961 to 1900 thousand tonnes in 2005. Poultry meat production increased by 8.7% and 6% per annum during the eighties and nineties (Mehta et al. loc cit.). In a recent study, a growth a rate of 13.9% for poultry meat for the period 1995 to 2005 has been reported.

Broilers are major source of poultry meat in the country. Broiler production, which was merely 4 million in 1971, increased to 1250 million in 2000 and 1400 million in 2002. Fairoze et al. reported production of 1563 million broilers during the year 2006, with the average production being 130.2 million per month. 

Private sector contract farming systems and the vertical integration of broiler enterprises have played a major role in this spectacular growth, especially in southern and western India. The expanding role of poultry integrators has contributed to declining poultry consumer prices by lowering production and marketing costs. Significant numbers of smallholder broiler producers are involved in contract farming and thus survive the competition from large farms.

India’s poultry production base is huge. However, the processing level is very low at around 6% for poultry meat. Hence, there is immense potential for investment in the food processing industry sector (GOI, 2008).

Tamil Nadu, Andhra Pradesh, West Bengal, Maharastra, Karnataka and Punjab are the major broiler producing states of the country. The Coimbatore-Salem belt of Tamil Nadu is in the forefront of broiler production of the country. 75% of the broilers produced and consumed in this region come from integrated farms. The Pune-Nasik-Mumbai belt in Maharastra is another prominent area in broiler production through integrated farming. 

Integration and contract growing of broilers is spreading rapidly in Hyderabad and Bangalore. Only 10% of the total broilers in north and eastern region are produced through contract farming.

There have been major changes in the structure and size of broiler farms during last two and half decades. Not only has the numbers of farms raising broilers increased, but there has also been a significant increase in sizes. A typical broiler farmer used to raise only a few hundred broilers per cycle; whereas now it has increased to 10 to 20 thousand for a weekly cycle as a result of which the total capacity has increased. Production practices have also modernized. The body weight which was achieved at 8 weeks of age during the eighties is now realized in 35 to 40 days of age and the FCR has improved from 2.5 to less than 2.0. minilogo_green

To be continued …

Freshwater Ornamental Fisheries – A Viable Economic Activity in India | Part 3: Way Forward

Ornamental fishery is an emerging sector and can well be a world-scale opportunity area for fish farmers & traders in India. There are approximately 187 species / breeds of fishes which are at present traded in the country. Large numbers of fishes are of indigenous origin which includes Loaches, Gouramis, Barbs, Danios, Eels, Catfishes, air breathing fishes, glass fishes. The commonly grown species include exotic species like Molly, Guppy, Platy, Swordtail, Gouramis, Barbs, Danios, Chiclids, Angels, Siamese fighter, Tetras, Gold fish, Manila carp, Sharks etc.

The ornamental fish varieties can be broadly grouped into  four categories -  Tropical Fresh Water,  Tropical Cold Water , Marine Tropical and Marine Cold Water. The managements of these four categories are different in nature. However, most of the species under consideration of the model schemes belong to the first category barring Gold fish and Koi carps.

With concerted efforts from the concerned quarters, the author envisages in this three-part series that this sector can be a vibrant industry with India playing a significant role in global ornamental fish trade. minilogo_green

Solutions: Considering the present scenario of the industry and the constraints, the following suggestions are made in order to mitigate the pitfalls and unleash the potentials of the sector.

  1. Research: Creation of newer variety, controlled breeding of indigenous species, production of indigenous feed and problems related to disease control etc. would require focused attention of our research agencies and necessary research back up from the State Agriculture University, ICAR and MPEDA. Suitable proposals in this regard could attract funding support from various international as well as domestic funding agencies.
  2. Setting up of mother hatchery: To maintain the purity of germplasm and its characters, the breeding units may be separated from the rearing units. The breeding units may be conceived of as the mother hatchery maintaining the brood stock (exotic as well as indigenous) and multiply the same for distribution to the nucleus seed farms on regional basis, which would in turn supply seed of desired quality to the backyard hatcheries within a region for supply to the rearing units (Fig.1). The mother hatchery unit  could be set-up either in the private sector as in the case of poultry sector wherein M/S Venkateswara Hatchery is maintaining the brood stock of exotic birds and supplying the day old chicks to the grower units or under the structure of a society as in the cases of shrimp hatcheries viz. TASPARC and OSPARC.
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  4. Technology for rearing of exotics: As may be evident from the observations, the present natures of operations are non-scientific and not following proper water quality management. Water exchange of 50 percent over a week may suggest a very low level of stocking and hence the unit area productivity is very low, resulting in higher cost of production. This could be overcome with appropriate technology involving proper water quality management followed by proper feeding technology involving dry feed of proper quality as against the present practice involving live food. Such scientific management may call for refinement of technology.
  5. Seed certification agency: For the purpose of certification of seed we need to create a Certification Agency, which would certify the quality of imported seed / brood stock as well as the finished products for export and domestic market. The M.P.E.D.A may be having the necessary mandate to organise such seed certification bodies.
  6. Marketing:  The viability of the units would depend considerably on the strength of its marketing infrastructure. Whether it is marketing in the weekly market or marketing through wholesaler at the farm gate would require basic marketing infrastructure. The growers coming from interior rural places would definitely require holding facilities at the marketing site failing which at the end of the day he will be forced into distress sale of the unsold stock. Similarly, unless the volume of produce is sizable, the growers cannot get proper price from the wholesaler as there is always a risk of price cut by ill-informed competitors in the trade. Formation of a syndicate of growers could help them to withstand such vagaries. Availability of regular cargo space at affordable tariff by rail and air are a must to ensure smooth conduct of the trade. Since it involves transport of live cargo and that too a sensitive live form, any transport bottleneck could prove to be disastrous and hence would require all the support from the railway and airline authorities. Market research is another important component for smooth operation in this highly competitive market. The present breeding and rearing operations are not backed by market related information pertaining demand-supply and price trend of various species/breeds. This could be vital input for any business decision, which our farmers are not equipped with. This service could be outsourced by the growers in case a marketing federation or such a set-up is created with involvement of the growers and exporters.
  7. Training: This is a major bottleneck towards promotion of the activity on an organised, scientific and sustainable manner. Adequate knowledge of technology, species selection, economics, market requirements, quality aspects related to the sector, hazards of indiscriminate breeding, disease control, conservation of natural fauna, method of proper packing and transport of live aquarium fishes etc. is essential pre-requisites for attaining the projected growth of the sector. Capacity building of the beneficiaries through various Government sponsored programmes, civil society organisations and research institutions needs to be planned.
  8. Infrastructure: Considering the need for close cooperation between the growers and the ancillary units and the common facilities required for their operation involving developed site for erecting poly-shed structures, water supply of desired quality, compressed air etc., setting up of Aquaculture Parks could help in promoting the activity on a large scale. Such common infrastructure could be created as Technology Parks under EPZ schemes. Setting up community deep tube wells in areas where the activity is taken up in clusters could help the smaller units not able to afford the cost. Live cargo holding facility for ornamental fish near airports involving re-oxygen packing, temporary holding facilities, forwarding, clearing and transportation facilities are long felt needs of the sector. Setting up of disease diagnostic laboratory in pockets where clusters of units are coming up could help the growers considerably. The various infrastructures as discussed could be considered for finance by NABARD to the state governments and state run corporations under its Rural Infrastructure Fund (RIDF).
  9. Information base for project formulation : The information base in respect of technical and financial parameters relating project finance is highly limited and the same is not readily accessible.

Technical: Realizing the gap in information in respect of the ornamental fish species, NABARD had initiated the task of building a database starting in 1999 and the database could be made operational as regard freshwater exotic species are concerned, with appropriate software support. The work regarding indigenous fauna may be carried out by a suitable research institute and information made available for large scale adoption. Cooperation of all agencies engaged in fisheries research pertaining to ornamental fishes may be required to strengthen the data base on a continuing basis. On completion, the same could be put up on a website for the benefit of the end users. A brochure may also be prepared for speedy dissemination of information.

Financial: A package for analysis of financial parameters of ornamental fishery schemes may be developed by a suitable agency, which may provide the requisite technical information towards scheme formulation involving combination of species ranging from soft water to hard water, adjusting for the variation of breeding periods. This is an unique requirement of the sector considering large number of species involved and the number of technical parameters. The package should be very user friendly. Thus a software would simplify the planning process and make investment decision easy through rapid and diverse combination of species to study the impact on economics. The software would also enable designing of hatchery as well as rearing units of varying capacities.

Conclusions: A blue print for development of the ornamental fishery sector needs to be developed at the GoI level and the state level.  The role of the Directorate of Fisheries, Govt. of West Bengal towards infrastructural development including setting up of technology parks; the role of financial Institutions  towards financing of the individual units, cluster development, ancillary units and that of the research institutions toward R&D support in applied research needs to be defined and action plan towards bridging the gaps in respect of policy planning, finance, research, infrastructure, organizational set up, quality inputs and technology chalked out. 

With a holistic  program in place and a commitment of all agencies to develop the sector, including the industry engaged in export of ornamental fishes, the unorganized sector could be transformed into a vibrant industry given the domestic as well as export demands of ornamental fishes. With concerted efforts, it may be possible to put India on the world map of ornamental fish trade given a time frame of five years. minilogo_green