ANALYSIS - India's poultry industry is in need of a major overhaul and massive investment if it is to meet the challenges ahead to address the demands of a growing population, writes Jackie Linden.
In a recent article on ThePoultrySite, industry analyst, Terry Evans, reported that consumption of chicken per person in India in recent years has been held back by the growth of the human population. While rising purchasing power, changing eating habits and increasing urbanisation are likely to sustain continued growth in demand and consumption in the coming years but that lower overall economic well-being forecasts for this country may dampen growth somewhat.
FAO figures put India's population at 1.054 billion in 2000 and approaching 1.225 billion in 2012, with estimates of 1.308 billion in 2015 and 1.387 billion in 2020.
The same source puts per-capita poultry meat consumption there increasing from 900g in 2000 almost doubling to 1.7kg in 2009.
However, it is thought that uptake per person in India is 2013 is in the region of 2.8kg, according to Mr Evans. The transition from a predominantly live bird/wet market to a chilled/frozen trade is considered essential for future expansion. Hence, the development of a more efficient distribution system with investment in cold-chain infrastructure as the acceptability of frozen chicken rises, is considered to be a major driver to long-term growth.
A recent blog on Forbes India carries the title, 'How many poultry farmers do 1.2 billion people need?' and calls for a change in the structure of the industry to bring greater efficiencies and better career prospects for the country's young people.
Author of the blog, Anirudha Dutta, is former head of research at CLSA India Limited, a leading foreign brokerage house. He confirms the need for massive spending on the country's infrastructure. He says India will need to spend between US$800 billion and US$1.2 trillion in the country over the next 20 years to build the infrastructure necessary to meet the demands of urbanisation generally. However, he says, global firms are struggling to find people willing to re-locate to India.
The alternative is to continue the development of India's current trend for a growing informal economy based on small and medium-sized companies but Mr Dutta suggests this is not a model for sustainable growth in the poultry sector.
He cites a report by Neelkanth Mishra of Credit Suisse, showing that in 2005, India had 42 million enterprises with an average of just 2.4 employees. Almost 95 per cent of Indian businesses are categorised as 'microenterprises' in a recent economic survey and they account for 70 per cent of the work-force.
Growth in the number of people employed in poultry and fish production is "more like disguised unemployment than real job creation" and reveal "gross inefficiencies", according to Mr Dutta.
Supporting his assertion, he says that a national survey showed 11.1 million people employed in rural India in poultry and fish farming in 2005, which increased to 14.9 million in 2010 and 16.5 million in the latest survey.
"This means for every 72 people, there is one person engaged in animal farming. In China, the equivalent number is 155," writes Mr Dutta.
He concedes that per-capita chicken consumption has risen rapidly - by about 11 per cent over the last decade but says that this increase has been achieved by a growing number of small farms.
He argues that India’s largest poultry company, Suguna Poultry, has a decentralised model of supplying feed, day-old chicks and other services to farmers across 8,000 villages and then aggregating the supplies of broiler chickens and eggs into the market. In doing this, Suguna is involved with around 20,000 farmers across 8,000 villages.
This model does not explain the growth in the poultry sector, according to Mr Dutta. The growth has come instead from an increase in the number of very small farms, which, he alleges, are less efficient and do not offer attractive career prospects for the country's well-educated workforce, which increases at a rate of 13 million per year.
Top image via Shutterstock