Sustained consumer demand continues to drive the poultry meat sector, while there is a need to step up investment in infrastructure in the value chain as well as ensuring reliable feed supplies.

Livestock sector plays a critical role as a subsector of agriculture in the Indian economy. The sector has huge potential in terms of its contribution in total economy, employment generation and world trade. The sector comprising poultry meat, eggs, dairy and fisheries witnessed a compound annual growth rate (CAGR) of 8.15% . As per the estimates of National Accounts Statistics, 2020 for sector wise Gross Value Added (GVA) of agriculture and allied sectors, the contribution of livestock in total agriculture and allied sector GVA (at constant prices) has increased from 24.32% (2014-15) to 29.35% (2019-20). Livestock sector contributed 4.35% of total GVA in 2019-20. Development of the livestock sector has led to improvement in per capita availability of milk, eggs and meat.

According to FAOSTAT production data for 2020-2021, India ranks 3rd in egg production and 6th in broiler production in the world. Egg production in the country has increased from 78.48 billion in 2014-15 to 122.11 billion 2020-21. The per capita availability of eggs is at 91 eggs per annum in 2020-21. Meat production in the country has increased from 6.69 million tons in 2014-15 to 8.80 million tons in 2020-21. The average per capita consumption of meat in the country is around 5.7 kg per annum.

As per the Department of Animal Husbandry and Dairying, more than 85% of India’s poultry meat is produced by organised commercial farms and the rest is produced by backyard poultry, mostly in the rural areas. Out of commercial broiler production, major poultry companies who follow vertically integrated operations have a share of around 60-65%. The poultry sector at present provides employment opportunities to around 6 million small and medium farmers (who own farms with 5,000-10,000 broiler size).

Driving demand of Poultry Meat

In the last three decades, the India poultry market has undergone significant transformation, and the region has emerged as one of the major sectors of the economy. The poultry market in the country is being largely driven by the rising disposable incomes and changing consumer food habits. In the post Covid19 pandemic phase also the demand for the protein rich food like poultry meat and eggs have increased sharply. The growing awareness regarding health and wellness is further driving the demand for a protein-rich diet.

According to industry estimates, the Indian poultry industry in 2022 was valued at around $28 billion. Aided by the increasing popularity of online services and growing online food delivery channels, the market is expected to witness a further growth in the next 5 to 10 years with a growth in CAGR of 8.1%.

As per Agricultural and Processed Food Products Development Authority (APEDA) data, in 2021-22, India exported 3,20,240 tons of poultry products valued at Rs 529 crore ($ 71 million). Traditional export destinations have been Oman, Maldives, Indonesia, Vietnam and Russia. Malaysia for the first commenced importing eggs from Namakkal (Tamil Nadu) recently. Though both the quantity and value of the exported processed poultry products have increased during the last few years and further efforts are being made to increase poultry exports from India, the trade is very small in comparison to the global trade.

To support the livestock sector, the government has initiated several measures. The Animal Husbandry Infrastructure Development Fund (AHIDF) of Rs 15000 crore is being implemented from June 2020. The key objectives of the scheme is to fulfill the objective of protein enriched quality food requirement of the growing population of the country and prevent malnutrition. As far as poultry development is concerned the fund has provisions for technologically assisted layer farms with environmentally controlled systems, broiler breeder farms with environmentally controlled systems and hatcheries with environmentally controlled facilities. The support is also provided for Meat processing and value addition infrastructure and establishment of animal feed plants including poultry feed.

Under AHIDF, farmer producer organizations (FPOs), Micro Small and Medium Enterprises, Section 8 Companies, Private Companies and individual entrepreneur availing credit facilities will get 90% loan for which 3% interest subvention is provided by the Central Government. The Central Government is also providing Credit Guarantee of 25% of total borrowings for those projects which are fulfilling the definition of MSME projects.

The National Livestock Mission has been revised and realigned with an outlay of Rs.2300 crore for the five years commencing from 2021-22. The mission aims at development of entrepreneurs in rural poultry. The central Government is currently providing 50% subsidy up to Rs 25 Lacs to establish parent farm, rural hatchery, brooder cum mother unit for production of hatching eggs with minimum 1000 parent layers and chicks and rearing of the said chick up to four weeks in the mother unit.

The Self Help Group, Farmers Producer Organizations organization’s (FPO)/Farmers Cooperatives organization’s (FCOs) /Joint Liability Groups (JLGs) and Section 8 companies can avail financial assistance under the mission. Department of Animal Husbandry and Dairying has developed an online portal for a completely digitized Process with all the important documents to be uploaded on the portal nlm.udyamimitra.in.

Key future challenges

Rising consumption of poultry meat, supply of feed in the coming years has to be sustained to avoid volatility in the feed prices. Poultry feed comprises mainly maize and soya meal and the country needs to increase supplies of feed in the coming years. Another key challenge is that soybean productivity has largely stagnated in the last few years. In August 2021, as an exception due to domestic supply constraint, the government had allowed import of 1.2 million tons of genetically modified (GM) soybean meal to help the poultry industry tide over higher feed prices.

The government must take steps to increase feed supplies and allow cultivation of GM hybrid soybean so that future feed supplies could be assured. For the future demand of poultry meat, the government must liberalize imports of GM soybean meal and maize.

Trust on creating infrastructure of Poultry Processing

Processing and marketing of poultry range from live bird markets to highly sophisticated, fully automated, adhere to International Standards Organization (ISO) certified facilities and ready-to-eat convenience products. Lack or inadequacy of refrigeration is probably the biggest challenge poultry industry faces.

The poultry industry in the country is consistently growing due to the use of modern technology and there has been a gradual shift in demand from live bird to fresh chilled and frozen poultry product market. The government must step in supporting the sector in creating infrastructure for reducing losses in the poultry value chain. The better transportation infrastructure for live birds and more cold storage facilities for the processed meat will go a long way in modernizing the industry while sustaining the future growth prospects of poultry meat. Although the wet market continues to dominate the poultry industry, there has been a significant increase in e-commerce with the expansion of home delivery of various poultry meats and processed meat. Now there is an urgent need for setting up of modern poultry processing plants to cater to both domestic as well as export markets.

Previous article by author: Indian Poultry Exports – It’s Time To Be Competitive

Indian Poultry Exports need to be competitive in terms of costs as well as quality to capture sizeable share in Global Poultry Trade

India’s poultry industry is today one of the fastest growing poultry producers in the world with production having grown four-fold over the last two decades. The shift has been gradually to large-scale commercialization, overcoming several challenges on the way. According to the National Action Plan for egg and poultry – 2022 prepared by Department of Animal Husbandry, Dairying and Fisheries, more than 80% of poultry output, particularly in the broiler segment, is today produced by organized commercial farms. Major poultry companies have vertically integrated operations which comprise 60-70% of the total poultry meat production. Thus, India has emerged as the world’s third largest egg producer and sixth largest producer of broiler meat.

The poultry sector is growing at a compounded annual growth rate (CAGR) of 10.5% and playing a critical role in promoting livelihood options in rural India. Instead of rearing country birds, farmers are now increasingly rearing hybrids which yield better operating parameters and sustainable profits. Rising urban population, changing eating habits and growing penetration of quick service restaurants have all played a big role in sustaining growing demand for poultry meat. According to Basic Animal Husbandry Statistics, 2020, India’s poultry meat production was 4.34 million tons, contributing more than 50% of the total meat production in 2019-20. The egg production stood at 114.38 billion in 2019-20. The global poultry market is expected to grow at a compounded annual growth rate (CAGR) of 10.1% to touch $350.87 billion in 2022 from $318.58 billion in 2021. By 2026, it is expected to touch $493.21 billion, growing at a CAGR of 8.9%.

Poultry consumption is expected to grow maximum in the coming years. However we need to acknowledge that poultry processing and value addition is still at a very nascent stage in India. The share of processed chicken meat industry is only around10% of the overall industry. This is due to the consumer preference for the live bird. This dominance of wet or live bird market limits geographical movement of output given the perishable nature of the product and limited cold storage and transportation infrastructure. The impact of our limited processing capacity is also reflected in our poultry meat exports.

As per Agricultural and Processed Food Products Development Authority (APEDA) data, in 2020-21, India exported 2,55,686 tons of poultry products valued at Rs 435 crore ($ 58.7 million). Traditional export destinations have been Oman, Maldives, Indonesia and Vietnam. Though both the quantity and value of the exported processed poultry products have increased during the last few years and efforts have been made to increase poultry exports from India, the trade is very small in comparison to the global trade. The global poultry market is expected to grow to $493.21 billion in 2026 at a CAGR of 8.9%. Exports are not equitable across the globe and are concentrated in certain clusters like Middle-East and South-East Asia.

Recently rise in demand for chicken from Singapore following the ban on exports by Malaysia could not be utilized for promotion of exports from India. Given that Singapore imports 34% was met by Malaysia alone, this can be a godsend opportunity to make further inroads into the Singapore market. Frozen chicken from the South American nation accounts for 48% of the total imports by Singapore. The US supplies 8%, while a few smaller exporting nations make up the rest 10%.

While there is a good scope of export of dressed chicken to Singapore from India and a few companies from South India which have poultry processing plants, are already in the process of exports to the island nation, we need to step up our export capacity. Value-wise, our current chicken exports are much lower compared with exports from Brazil and the US.

To do this, Indian exports need to be competitive in terms of costs as well as quality. Export viability depends on competitive cost of production and proximity to international markets. Indian chicken exports have faced difficulty in the international market because there is no low pathogenic avian influenza (LPA) vaccination.

Only in December last year, the United Arab Emirates lifted a ban on importing eggs and other poultry products from India after the Indian government gave an assurance that Indian poultry meat exports would adhere to bio-safety norms prescribed by the World Organization for Animal Health to prevent infection from bird flu.

We need to create infrastructure for slaughter house for boosting out exports. We need to have adequate processing facilities which meet international standards. The cost of the production for poultry bird is expensive compared to other countries such as Indonesia, Philippines and China. The high input costs are a major reason for this. Cost of production of our feed is higher compared to other countries such as the US, China or Brazil. Feed price constitutes around 70% of the total production cost. This apart, the seasonal nature of consumption leads to volatile demand supply trends across regions, making all calculations go awry.

Developing efficient distribution with large investments in cold chain infrastructure and proper high-capacity processing plants of international standards is the need of the hour. Integrated production, market transition from live birds to chilled and frozen products and policies that ensure supplies of competitively priced corn and soybean are keys to future poultry industry growth in India. Within the processed poultry segment, the share of frozen products is minimal compared to chilled products. Integrated poultry processing plants have hatcheries, feed mills, and primary processing facilities. This integration model ensures that farms with 5000 – 10,000 broilers capacity are insulated against fluctuations in market prices as they are assured of getting predetermined fixed prices as per the contracts.

There are a number of small poultry dressing plants in the country. These plants are producing dressed chickens. In addition to these plants, there are a handful of modern integrated poultry processing plants producing dressed chicken, chicken cut parts and other chicken products. Therefore, industry-wide, a shift towards integrated processing plants would be advantageous. Farming technologies such as climate-controlled farm houses and automated feeding lines can help improve farm productivity. Feeding, water supply, temperature and humidity control are some of the variables that require automation in poultry farming. Automatic feeding systems could reduce labour cost and improve farming level and Feed Conversion Ratio (FCR) efficiency, thus reducing overall production costs. The environmentally controlled (EC) sheds ensure bigger harvests, better feed conversion and economy both on capital and revenue investments.

The government had announced Special Livestock sector package. The poultry meat as well as egg sectors must take advantage of this financial assistance to boost infrastructure. A capital subsidy should be there on setting up EC sheds with improvement in infrastructure in the wet market that would boost demand as well as consumption.

The domestic demand for poultry and processed poultry products has shot up since the middle of 2020. There has been a huge increase in e-commerce with expansion of home delivery as a response to the Covid-19 lockdowns and change in consumer buying behavior. The Russia-Ukraine war and supply chain turmoil since the pandemic have upset many old trade links and thrown up new export opportunities. Hence, there is an urgent need for setting up of modern poultry processing plants to cater to both domestic as well as export markets.

Author: Mr. Ricky Thaper, Treasurer, Poultry Federation of India

Title Image Source: FreePik

Similar article by author: Automation In Indian Poultry Production And Dressed Chicken Marketing

After achieving a healthy growth in India’s poultry sector in the last many years, time has come for the sector for adoption of automation and infrastructure creation at the marketing point for ensuring that quality meat is supplied to consumers.

India’s poultry sector, despite the challenging times of 2020 and 2021, has been one of the fastest growing segments of Indian agriculture and allied sector. In fact, while the agricultural production has been growing at around two percent, in the last decade, the production of eggs and broilers has been rising in the range of around 8-10% on an annual basis. The Poultry sector especially is growing at a compounded annual growth rate (CAGR) at a constant 10.5% and playing critical role in promoting livelihood options in the rural economy. Due to this steady growth, India has emerged as the world’s third largest egg producer and sixth largest producer of broiler meat. Economic growth, rise in urbanization and stress on consumption of protein rich food have contributed to steady growth in demand for poultry meat and eggs.

Despite several field and raw material rates challenges, the business-to-consumer demand for poultry remains good. Consumers are looking for additional sources of protein rich foods and poultry meat is preferred over other meat products as it is considered more hygienic and supplies are uninterrupted throughout the year in relatively economical prices compared to prices of mutton and fish. According to Basic Animal Husbandry Statistics, 2020, India’s poultry meat production was 4.34 million tonnes, contributing more than 50% of the total meat production in 2019-20. The egg production stood at 114.38 billion in 2019-20.

According to the National Action Plan for egg and poultry – 2022 prepared by Department of Animal Husbandry, Dairying and Fisheries, Govt. of India, more than 80% of India’s poultry output is produced by organized commercial farms. Major poultry companies have vertically integrated operations which comprise approximately 60-70 % of the total poultry meat production.

The broiler meat industry is witnessing growth because of adoption of the backward integration system. The companies, which are integrators, have hatcheries, feed mills, and primary processing facilities. The integration model ensures that farmers (who own farms with 5000 – 10,000 broilers capacity) are insulated against fluctuations in market prices as under the contract they remain assured of getting predetermined fixed prices. Directly and indirectly this poultry sector provides employment to around six million small and medium farmers.

However, for meeting rising demand for poultry products in the coming years, the poultry farmers need to adopt automation for ensuring efficient production system and improving infrastructure at the existing wet market.

A large chunk of the broiler and layer farms in India do not have climate control system, which exposes the broilers or layers to various climate changes, which could adversely impact productivity. Latest farming technologies such as climate-controlled farm houses, automated feeding lines etc. can help improve the productivity in farms. Feeding, water supply, temperature and humidity control are some of the variables that require automation in poultry farming.

With rising cost of labour as well as reduction in supplies of workforce in parts of the country, the automation at farm level has to be installed for bringing in efficiency in the production at broilers and layers farms. According to industry sources, automatic feeding system could reduce the labour cost and improve farming level and Feed Conversion Ratio (FCR) efficiency. With automation, FCR is bound to improve further thus making India’s poultry meat production more efficient. The broiler and layer farmers usually refer to feed costs as the critical component of controlling and lowering production costs.

There has been gradual adoption of environmentally controlled (EC) sheds by commercial broiler farmers. The EC sheds ensure bigger harvests, better feed conversion and economy both on capital and revenue investments. Keeping air and floor temperature in the house fully under regulation are essential during brooding. Some of the elements of EC sheds include temperature and humidity maintenance, supplementary levels of heating and cooling at all times, increase of biomass in the shed and floors are prepared for keeping the even heat distribution.

The Commercial production of eggs and chicken meat on scientific principles has been well standardized, while the marketing system of eggs and broiler meat are not fully organized. Eggs are sold mostly from retailer next door for meeting the daily needs of consumers. Eggs go through the value chain of wholesale dealers, sub-dealers, retailers etc.

Broilers are sold live or slaughtered openly in the live market and according estimates around 90% of broiler meat is sold through wet market. There is need for creating infrastructure for hygienic slaughter. There is need for investment in improving marketing infrastructure for both broiler birds and eggs for attracting more health-conscious consumers especially in the post-COVID phase. Hence, there is a need for setting up of broiler meat processing plants in the near future and sale of processed chicken to increase both to cater domestic as well as export markets.

The demand supply situations witness significant seasonal fluctuation in broiler and eggs prices. The prices as well as demand mostly decline during religious festivals. The major industry players attempt to support prices by reducing chick placements when demand falls. However, the industry needs to put in place robust market information in advances by assessing demand pattern.

The demand for poultry and processed poultry products has seen an expansion especially since middle of 2020. There has been huge increase in e-commerce with expansion of home delivery as a response to COVID-19 lockdowns and the fear of exposure by shopping in traditional wet markets.

The online segment is expected to continue to drive broiler and eggs consumption in the coming years thus by pushing increasing per capita consumption of poultry meat and eggs.

Recently the Government had announced Special Livestock sector package amounting to Rs.9,800 crore over the next five years starting 2021-22. The poultry meat as well as egg sectors must take advantage of this financial assistance to boost infrastructure. A capital subsidy should be there on setting up EC sheds with improvement in infrastructure in the wet market that would boost demand as well as consumption.

Article by Author: Indian Poultry Industry – Lessons From Covid

Title image Credit IStock

Bird-flu scare during the initial weeks of January, 2021 had adverse impact on poultry meat & eggs consumption. Swift action by the government in collaboration with state governments in dismissing rumours relating to consumption of poultry meat & eggs, helped to an extent in restoring consumer confidence. Concrete measures are needed to ensure that rumours against consumption of poultry meat & eggs circulated at frequent interval are dealt with firmly through sharing of scientific information so that livelihood of millions of farmers and other stakeholders associated with the industry are not hit and poultry industry continues to contribute significantly towards India’s economic growth – Ricky Thaper, Treasurer, Poultry Federation of India.

India has been reporting a few cases of Avian Influenza (AI) commonly known as ‘bird flu’ since 2006. In the first week of January, 2021, the Ministry of Animal Husbandry, Dairying and Fisheries had stated that ‘bird flu’ cases have been reported mostly in bird populations such as crow, migratory birds, ducks and goose birds.

While reports of ‘bird flu’ not only impacted poultry meat & eggs industry in terms reduction in consumption, it also adversely hit other stakeholders like farmers growing maize and soya (used as poultry feed ingredients) as prices of these commodities declined because of lack of meat demand. Keeping in mind its impact on the poultry business, Ministry of Animal Husbandry, Dairying and Fisheries, Government of India took prompt actions and urged state governments to raise awareness amongst the consumers of poultry meat & eggs that its safe for consumption so that people are influenced by mostly fake news or rumours.

“The AI is a virus that can infect birds. India has been reporting the disease since 2006 and till date there is no report of human infection. The country had controlled the disease effectively through culling. There is no scientific report available all over the globe that the infection of H5N1 or any other strain of Avian Influenza viruses spread through the processed products,” Dr. OP Chaudhary, Joint Secretary, Ministry of Animal Husbandry, Dairying and Fisheries, GOI, stated in his letter to all Principal Secretaries, Animal Husbandry from States and other officials. These are most welcome steps.

In a bid to convey the message about safety of poultry meat & eggs consumption, Animal Husbandry and Dairying Minister Shree Giriraj Singh Ji organized press conferences and made the statement that there have been no scientific reports on transmission of bird flu to humans and consumers should not be scared. This confidence building communications by Honorable Minister, Shree Giriraj Singh Ji was very much appreciated by the entire poultry industry.

The Ministry of Animal Husbandry and Dairying requested state administration to issue instructions to concern State authorities and local administration against imposing a ban and allow selling of poultry products sources from one state to other state. However, the government in collaboration with industry must ensure that unfounded rumours as well as fake news against consumption of poultry meat & eggs is countered periodically with scientific studies. Even if bird flu incidents are not reported amongst poultry birds, its impacts consumption of meat & eggs because of unfounded or fake news circulated in the media. Millions of people are engaged in the poultry value chain and such news impacts livelihood as well as impacts overall economic growth of the country as poultry sector contributes significantly to the contribute India’s GDP.

The World Health Organization also states that it is safe to consume poultry meat and eggs. According to the WHO website, there is no epidemiological data which suggests that the disease can be transmitted to humans through cooked food. The virus is destroyed at 70°C if held for about 3 seconds. Also, properly cooking meat or eggs to achieve a temperature of 74°C in eggs or all parts of meat will inactivate the virus. FSSAI urges the FBOs and consumers not to panic and ensure proper handling and cooking of poultry meat and eggs for its safe consumption.

In a welcome step, the Food Safety and Standards Authority of India (FSSAI) had issued a guidance document (on January 21, 2021) on “Safe handling, processing and consumption of poultry meat and eggs during bird flu Pandemic” for creating awareness amongst Food Business Operators and consumers. Such communications create confidence amongst the consumers of poultry meat and prevent unnecessary panic created on the basis of false information about the poultry industry.

In India, the disease spreads mainly by migratory birds coming into India during winter months. However, it’s the poultry industry which is adversely impacted as consumers reduce consumption of poultry meat & eggs notwithstanding that there are several studies which state that meat & eggs consumption is safe. Poultry industry, which is witnessing a healthy growth rate especially in the last two decades, faces a slump in the demand for meat & eggs because of false information being spread during the bird flu outbreak, which virtually disrupts the value chain adversely impacting the industry.

Thus, all the stakeholders in the value chain from poultry farmer owners to sellers along with the government agencies must ensure continuous awareness creation about the safety protocols being followed by the industry to dispel any doubts in the minds of consumers. This would prevent frequent volatility in the demand for meat & eggs because of few reports about bird flu and shall save livelihood of farmers as well as other stakeholders in the value chain.