EVALUATION STUDY SERIES : UTTAR PRADESH : N o - 9

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EX-POST EVALUATION STUDY ON

POULTRY (BROILERS) FARMING IN UTTAR PRADESH

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NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
U T T A R PRADESH REGIONAL OFFICE, L U C K N O W 2005

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FOREWORD
Poultry meat is the fastest growing component of global meat production, consumption and trade, with developing and transition economies playing a leading role in the expansion. India, the world's second largest developing economy, now has a large and rapidly expanding poultry sector. The share of poultry meat in total meat production has increased from 4.46 % in 1981 to 12.10 % in 2002 in India. In India, the poultry sector grovrth is being driven by rising incomes, together with the emergence of vertically integrated poultry producers that have reduced consumer prices by lowering production and marketing costs. However, the State of UP is a net importer of poultry meat as the per capita production and per capita consumption of poultry meat in the state are 100 gm and 300 gm respectively. The present Ex-post Evaluation Study on 'Poultry Farming (Broilers) in Uttar Pradesh' was undertaken to study the implementation of poultry schemes by the banks, besides assessing the economics of investment in selected districts of the State. The study observed that in Uttar Pradesh, the growth of the poultry sector in eastern part of the state is more pronounced than in western UP. The fluctuating price of broilers, high rate of mortality due to various diseases, faulty site selection, lack of proper heating and cooling systems, lack of proper awareness, under financing by banks, poor post loan disbursement follow-up by banks, etc., were the main reasons for closure of many units, particularly in the western part of the state. Keeping in view the vast consumer base as also the low level of availability of poultry meat in the state, banks have an alternative sector for challenging credit. SCARDB can professionalise its appraisal, sanction and monitoring systems to tap this sector for quality credit. I hope that the findings of the study will be useful to financing banks and the state government in formulating their future strategy for extending increased credit needs for supporting poultry activity, particularly the broiler activity. The findings of the present study would also be of interest to the academicians, researchers and to the corporate world having interest or engaged in the poultry sector.

Y.L. Sapra Chief General Manager

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ACKNOWLEDGEMENT

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CREDIT LIST O VERALL DIRECTION

HEAD OFFICE Department of Economic Analysis and Research REGIONAL OFFICE Shri Y. L. Sapra, Chief General Manager Shri Pankaj Pandit, General Manager Shri A. K. Panda, Deputy General Manager Dr. P. P. Desai, Deputy General Manager (A.H.)

FINALISATION OF REPORT Dr. P. P. Desai, Deputy General Manager (A.H.) Dr. Gyanendra Mani, Assistant General Manager (Agril. Economist)

ANALYSIS OF DATA AND DRAFTING OF REPORT Dr. Gyanendra Mani, Assistant General Manager (Agril. Economist)

FIELD VISITS Dr. P. P. Desai, Deputy General Manager (A.H.) Dr. Gyanendra Mani, Assistant General Manager (Agril. Economist) Shri K. Venugopal, Manager

\ | I

U. P. REGIONAL OFFICE, LUCKNOW

TABLE OF CONTENTS
PARTICULARS Abbreviations Basic Data Sheet Executive Summary & Action Point Chapters I. II. III. IV V. Introduction Objectives and Methodology Implementation of Poultry Financing Schemes Cost of Investment and Its Financing Economics, Financial Viability and Bankability of Poultry Units VI. VII VIII IX X. XI. Technical Soundness of poultry Units Backward and Forward linkages Repayment Performance of Poultry Units Corporatisation of Poultry Sector Macro Impact of Poultry Investment Summary and Conclusion Annexures 29 36 39 44 47 51 53 60 13 17 21 26 PAGE NO. 01 02 03

ABBREVIATIONS
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 CAR! C:D Ratio CSO CTO DGFT DOC FCR FRR GDP GDI IPDP IVRI LBR-2 MBM NPV SCARDB Ltd TRQ VH UPSGVB Ltd USDA : Central Avian Research Institute Credit: Deposit Ratio Central Statistical Organisation Chief Technical Officer Director General Foreign Trade Day Old Chicks Feed Conversion Ratio Financial Rate of Return Gross Domestic Product Government of India Intensive Poultry Development Programme Indian Veterinary Research Institute Lead Bank Return -2 Bone Meal Net Present Value State Cooperative and Rural Development Bank Ltd Tariff-rate Quota Venkateshw^ara Hatcheries Uttar Pradesh Sahkari Gram Vikas Bank Ltd. United States Development Agency

BASIC DATA SHEET

Name of the Study Ex-post Evaluation Study on Poultry Farming (Broilers) in Uttar Pradesh

2 3 4 5 6

Period of Implementation Financing Bank

2001-02 to 2003-04
Uttar Pradesh Sahkari Gram Vikas Bank Ltd. Bareilly and Gorakhpur districts 60 (30 each in Bareilly and Gorakhpur districts) 03 and 25 out of 30 units covered each in Bareilly and Gorakhpur districts respectively Bareilly district 460 (3 units) 725 (10 units) Loan disbursed 32,696/75,834/Avg. weight 1.79 kgs 1.83 kgs Gl Per bird Rs. 73.84/Rs. 72.32/Smaller units Rs. 6.69/Rs. 3.51/Rs. 1.54/Smaller units Rs. 15,966/Rs. 8,376/Rs. 3,666/Smaller units 14.10% (-) 2614/Gorakhpur district 398 (08 units) 885 (17 units) Investment Cost 63,381/121,087/Avg. price per kg Rs. 39.86/Rs. 37.77/Gl Per unit Rs. 29,400/Rs. 59,718/Larger units Rs. 7.26/Rs. 4.30/Rs. 2.41/Larger units Rs. 35.994/Rs. 21,306/Rs. 11,934/Larger units 23.57% (-)49C1/"

Study Area
Sample Size No. of units existing at the time of field visits Average number of birds per unit Smaller units (< 500 birds) Larger units (> 500 to 1200 birds) Average loan disbursed vis-a-vis Total investment Cost Rs.) Smaller units Larger units Average live weight average sale price at the time of sale Smaller units Larger units Gross income Smaller units < Larger units

10
(i: (ii (iii, 11

Net income per bird over Variable cost Gross cost excluding family labour Gross cost including family labour Net income per unit over per annum Variable cost Gross cost excluding family labour Gross cost including family labour Financial Analysis Financial Rate of return (%) Net Present Value (Rs.) Benefit: Cost Ratio Recovery percentage on sample Macro Impact Contribution to GDP Employment generated (recurring)

o:
(ii (iii 12 (i (ii (iii 13 14 (i) (ii)

Bareilly : 18.65%

Gorakhpur 27.80%

Rs. 653.76 lakh 79,764 mandays (equivalent to 284 man-years)

EXECUTIVE SUMMARY 1. The Gross Domestic Product (GDP) from the Livestock Sector in India is estimated at Rs. 120.94 thousand crore which accounts for 5.5% of country's total GDP. The share of poultry meat in total meat production has increased globally from 19.79% in 1981 to 30.14%

2. The share of India in world poultry meat consumption is quite low and has only increased from 0.85% during Trinnium Ending (TE) 1963 to 1.78% during TE 2002 in UP. As per the 1998 Livestock Census, the total poultry broilers and poultry layers in Uttar Pradesh was estimated at 32.32 lakh and 41.09 lakh respectively. The per capita per annum production of broiler meat in UP is estimated at 100 gm meat whereas per capita consumption is about 300 gm (All India avg. 786 gm) poultry meat. To meet this gap, about 2.20 lakh broilers are imported from the neighbouring states. 3. In Uttar Pradesh, the growth of the poultry sector in eastern part of the state is more pronounced than in western UP. 4. The State LDB (SCARDB) accounts for 99.8% of total refinance to the poultiy sector in the State and therefore, only State LDB (SCARDB) has been covered in the present study. Two branches in Bareilly and 04 branches of SCARDB in Gorakhpur district were selected for the study. 5. A total of 60 sample units ( 30 each in Bareilly and Gorakhpur districts) financed during 2001-02 to 2003-04 were covered in the present study. In addition to this, 10 other entrepreneurs in Bareilly district who had not availed loan from any bank were also covered as most of the units financed by SCARDB in Bareilly district were found to be inoperative at the time of the field visits. 6. The process of identification of borrowers by the banks was found to be faulty due to lack of knowledge/expertise amongst the officials of the financing branches. It was also observed that most of the borrowers were not having any experience in poultry rearing. 7. Although loans were to be advanced against hypothecation of poultry sheds, equipment, etc., in reality, the amount of bank loan was decided mainly upon the availability of land with the borrower which was taken as collateral security and not based on actual requirement of the beneficiary or on the size of the unit. 8. The loan sanctioned to poultry units by the bank was found to be ranging from Rs. 12,000/- to Rs. 1.50 lakhs in Gorakhpur district and from Rs. 25,000/- to Rs. 1.00 lakh in Bareilly district. Interest rate charged by UP Sahakari Gram Vikas Bank varied from 11 per cent to 14.5 per cent irrespective of the loan amount. 9. In Bareilly district, only 03 out of total 30 units were found to be existing at the time of field visits. However, in Gorakhpur district, 25 out of total 30 units covered in the districts were found to be existing at the time of field visits. 10. The fluctuating price of broilers, high rate of mortality due to various diseases, faulty site selection, lack of proper heating and cooling systems, lack of proper awareness etc., were

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the main reasons for closure of the units. The effect of bird ilu during 2002 had an adverse impact on the poultry industry in the State. 11. The total sample in each district was divided into two categories (i) smaller units -birds upto 500 and (ii) larger units -birds from 501 to 1200 in number. The average number of birds per unit in these two categories was found to be 460 and 725 in Bareilly district and 375 and 885 birds in Gorakhpur district respectively. The average amount of loan disbursed in case of these units was found to be Rs. 39,400/- and Rs. 65,000/- in Bareilly district and Rs. 32,158/- and Rs. 72,439/- in Gorakhpur district respectively. 12. The insurance of poultry sheds, equipment and birds was not done. Many of the insurance agencies were reluctant to insure the birds in view of the technicalities involved in it. There was a lack of awareness among the beneficiaries that even the shed can be insured. 13. The post disbursement follow-up by the bank officials was found to be lacking, particularly in Bareilly district. The financing bank officials in Bareilly district were not aware whether unit financed by them were exinting or not. The follow-up and understanding of the bankers with the borrowers was better in Gorakhpur district. 14. All the sample farmers in the study area were found to be following 'all in all out' system of broiler rearing. 15. The average investment cost was Rs. 63,381/-, Rs.121,087/- on total sample of 500 birds (11 units) and 1000 birds (27 units). The major items of investment cost included Shed Cost (51.9% of total investment cost). Feed Cost (29.5% of total investment cost) and cost of day old chicks (9.2% of total investment cost) over the entire sample size. 16. A considerable portion (43.1% on an average) of investment cost had to be met by the beneficiaries through their own contribution by way of margin money. The margin money was found to be more in case of smaller units as the entrepreneures did not have sufficient land to offer as security. 17. The average gain in body weight in Gorakhpur district was higher (1.85 kg) than that in Bareilly district (1.76 kg) although average number of days per cycle was higher in Bareilly district. 18. No significant difference was observed in average sale price of broilers in Bareilly and Gorakhpur districts and was found to be ranging from Rs. 37.04 per kg to Rs. 40.51 per kg. 19. The average gross income per bird in Gorakhpur district (Rs. 73.74 to Rs. 76.40) was found to be slightly higher than that in Bareilly district ((Rs. 68.27 to Rs. 69.38). 20. The net return over various cost items was found to be lower in Bareilly district as compared to that in Gorakhpur district. In Bareilly district, the smaller units were able to recover only variable cost and were found to be making losses when the value of their own labour (family labour) was taken into account.

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21. The average net return per bird over variable cost in case of smaller units and larger units was Rs. 6.69 and Rs. 7.26 respectively. The average net return per unit per annum over variable cost in case of smaller units and larger imits was Rs. 15,966/- and Rs. 35,994/respectively. 22. The financial Rate of Return worked out to 14.1 per cent and 23.57 per cent in case of 500 bird model and 1000 bird model respectively. The Net Present Values were estimated negative at Rs. (-)2614/-and Rs. 23. All the units covered in the study were found to have been managed by family members only. The smaller units were found to be managed by owners single handedly with occasional support from other family members. However, some larger units, were found to have engaged more than one person. 24. In both the districts, day old chicks (DOCs) are being supplied by hatchery units through network of dealers on demand from the farmers. The supply was not regular. It was found that DOCs are supplied without vaccination and it is done by the entrepreneurs at their cost. 25. Captive feed production was not practised due to the poor knowledge of the poultry rearers. The situation is being exploited by the feed manufacturers in terms of the quality and also the cost of the feed. A well knit trading activity for feeding ingredients is existing especially in Gorakhpur district. 26. Power supply in both the districts was irregular, with lack of power supply for long hours. Most of the beneficiaries were using gas cylinders for lighting and heating purposes in the sheds. Since, both the districts face extremes of climatic conditions, lack of regular power supply is a major constraint to the development of poultry. 27. Three marketing channels viz., (i) Producer- Wholesaler - Retailer - Consumer, (ii) Producer - Retailer - Consumer and (iii) Producer - Consumer were found to be working in Bareilly and Gorakhpur districts for the marketing of the broilers. The producer's share was found to be varying from 71% to 78% in case of 'Producer-Wholesaler-Retailer-Consumer' channel, from 77% to 81% in case of 'Producer Retailer - Consumer' channel. 28. Branch-wise recovery performance of selected borrowers indicates that the general recovery in the selected branches has been very poor (less than 15%), particularly in Bansgaon and Sahjanwa branches of Gorakhpur district and the Bareilly branch of Bareilly district. 29. In Bareilly district, the question of debt servicing from income generated from the units financed by banks to the borrowers establishing poultry imits does not arise as majority of units were either not established or had closed in the beginning itself In case of Gorakhpur district, on an average, farmers were generating sufficient net income (over variable cost) to repay the annual instalment of the bank loan. 30. The contribution of the broiler units to the Gross Domestic Product (GDP) was estimated at Rs. 43.83 lakh in Bareilly and Rs 609.93 lakh in Gorakhpur district. Total employment generation in Bareilly and Gorakhpur districts due to financing of broiler units (adjusted to proportionate success rate) was estimated at 4590 and 75,174 mandays respectively.

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ACTION POINTS 1. The state of poultry financing by SCARDB in Bareilly has to be viewed seriously as only 3 out of total 30 units covered in the study were found to be existing. The bank has to set in place an effective post-disbursement monitoring system. 2. The disbursement of entire sanctioned amount has to be divided into number of instalments depending upon the physical progress pertaining to establishment of units and the same has to be monitored strictly by the financing branches of SCARDB. 3. There is a need to evolve a system wherein all proposals for financing of poultry units received by SCARDBs should be scnitinised by the technical officer. The proposals should also be scrutinised for aspects like existence of backward and forward linkages. Only technically feasible and .financially viable proposals having backward and forward linkages should be recommended for sanction. 4. The bankers should try to finance the activity on a cluster basis as it helps attracting the traders to lift the produce from the farm itself on account of availability of broilers in sufficient quantity in order to minimise the cost of transportation. 5. There is need to establish a 'Poultry Board' which will prepare a master plan to develop the UP poultry market in an integrated manner. The backward and forward markets need to be integrated on the lines that has now started working in some of the south Indian State like Andhra Pradesh. The development of poultry chain will have to incorporate developing methods to improve the yields of major ingredients like soya and maize too. 6. Maize and soybean are the major ingredient of poultry feed. Any policy aimed at boosting the growth in broiler sector will not yield the desirable results unless policy to increase the production of maize and soybean is incorporated in the same. There is need to

7. The construction of 'poultry shed' was found to be the major cost item. There is need to develop low cost poultry sheds on scientific lines. This will reduce the total project cost of poultry unit and will help small farmers who have less land to offer as security, particularly to banks like SCARDB. There is also a need to review and revise the land valuation norms of SCARDB. 8. The 'moneylender-producer relafionship' which is existing in poultry sector, particularly in case of small farmers needs to be converted into 'contract farming' which will help the farmer to sell a contracted quantity of his produce to a particularly buyer, and in turn, help the buyer to buy from that particular farmer at the contracted price. This will also enable the farmers to escape exploitation in the hands of feed suppliers who charge high prices for feed and provide low prices for broilers sold through them. 9. Breeding farms, hatcheries, etc., require large tract of land. Therefore, to attract large investors in the state of UP, the Government will need to simplify the land identificafion and acquisition process.

1. 1 ^ oHiJcl # %^ fclcbW f g j gRT ^ ^5gcf 3 $*i^iii ^

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4. ^ Tifcrfgf^ g^r QjonHt^ui fg? g^ ^?p^ if WFU WI%?, foRT^ 3?iTg ^ QiMUH gt^ ^5cn3ft g^r g5q T T P i tS T O ^T ^^rf^ 3cqig G g 5^ F e F j T % 5rM ?t ^ 5. 3.5r. ^ ^ ? w f ^ c r ^ ^ ^ q T c H g 5 r g i 3 n T ^ ^ ^ " t f f c 5 t g ^ ^ ^ Ricbm ^ msm ^ f f e ^ TiggjT g ^ftr^^r ^ q^:frcr 3CMI<H %g JRTRT g^HT tnfetu. 6. giff ^ cn% ^ i^ggsr 3 ? k # ^ 5ry!i ^firofr ^^?i^ # ^Hln^cid ^ 3 n ^ t . ^meR^lggjra^ g^f^ ^frfcT era c T g ) 5iwgt ^ ^ ^?igxft j f i e r a ? fg? SRT ^Fgsif ^ "^TTsr-^arsi ^rg^ g # m ^
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^ 3WcT?itH f g j ^ g^r jrat^T fgsqr oTT^. 7. ^fTPj^t cmicT g^r srfera^M % ? ^ ^ ^ grt # c r n c T T t , S^CT: ^r? ^ 37Tg?^ra51 fgj %Tfqg5 S T T E T R ^T g5fr ^ gict grt gj PIHWI ^ dcwlch g^r fcjcbf^d fg5crr 3n<^. ? ^ ? T ^ fg^if c T F i c T # g5#r 311-^JTI C T 5 J T 3^ i5t& H, JiTMicichi g ^ T ^^jfgeiT ftift 3 T r ^ fgg5RT tg5 % wn ct^ "31?^ f ^T^ 3R^ qm g^^igj grg traf^ ^ q ^ t . 8. T^FT3R-3cmgg5^er, oft ^ mcR ^ srfeigj prarR ^ t , -ymdl^ % i ^ i*'^n1 ^ ^ ^?tfg^ f5i%# qf^gf^ gr^^ g#e fd^H^ scqigg^r g^r cgs Bt jnggi gtr ^^tlgfer 3cmg g^r t t i ^ ^ <m\ jn^gj g^r ^a^te^ # ^^hm i ^ . ? # ^ ^HTSI 3 ^ g ^ q^ ^ gsr gnr ^g^k^ cmi ^ gFir fg^^Tn?zrTT%g>frg>!:qT5TOcTTtcr^Tf ^ ? i f % ^ -dw^|gH|g)r^tg^^aIT?T^cTTt. 9. 3.F. #^mcT^t^^f^it^?Tg5ctf3trg5r3ng)f^g5^^%u^g5r^^
fH'UHi Tf >H<dlch><ui gy^^ t n f f g cwlfch ^ t l f r ^ #rf|7T qspf # 3Rftg> ^ ^ STig^^raScTT ?tc?r

10

IT

10. Initial working capital which is capitalised and given as part of the temi loan should be directly disbursed to small farmers to enable them to purchase and store feed ingredients when their prices are favourable in the market. 11. Since the small fanners also experience shortage of working capital in the subsequent periods, suitable tie up arrangement should be made by SCARDBs as per the existing provisions to meet the working capital requirement in subsequent seasons. 12. Extension machinery of the State Govt, needs to be geared up to educate the poultry rearer the importance of bio- security measures and other related rearing practices. The programmes like Integrated Poultry Development Programme should be provided with sufficient fund to carry out the developmental work in true spirit. 13. In order to make their presence felt in the international market, it is necessary to strictly adhere to bio - security measures and follow the recommended husbandry practices. The various schemes of the central Govt, for establishment of cold storage can be made use of in the state to strengthen the cold chain infrastructure vital to the development of poultry industry through public and private sector participation. 14. In India, meat consumers usually prefer fresh slaughtered birds over the frozen meat. If the required support system for frozen poultry meat is developed and are supplied at a competitive prices, the market opportunities may expand significantly which is limited to metro cities only at present. 15. Consistent with the Uruguay Round market access commitment, India eliminated its quantitative restrictions on poultry meat imports in April 2001. However, phytosanitary regulations and clearance procedures applicable to poultry meat need to be clearly defined and this could aim at keeping a check on imports. This will help to prepare the existing poultry units to face such challenges in future, once the production prospects of poultry sector improve in the State.

11

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12

CHAPTER! INTRODUCTION
1.1 The Value of Output and Gross Domestic Product from Livestock Sector in India is estimated at Rs. 156.08 thousand crore and Rs. 120.94 thousand crore respectively (Basic Animal Husbandry Statistics, 2004, GOI). The share of livestock sector in the country's GDP remained more or less constant at around 5.5%> since 1995-96. The share of meat (17.4%)) in total value of livestock in India has been found to be much less as compared to that of milk and milk product (66.9%)). In the state of Uttar Pradesh, the share of meat in total value of livestock has been found to be very low (less than national average) at 3.95%o. The share of milk products in total value of livestock in Uttar Pradesh is as high as 89.5%) (Central Statistical Organisation, GOI, 2004). The broiler production in the country is estimated at 1000 million number. 1.2 In the recent years, the poultry farming has made rapid strides from a family occupation to a progressive industry. The share of poultry meat in total meat production has increased from 19.79% in 1981 to 30.14% in 2002 at world level and from 4.46 %) in 1981 to 12.10 %) in 2002 in India. The growth rates in poultry meat production in India have been vQvy high as compared to that at the world level (see Table 1.1). Table 1.1: Compounded Annual Growth Rate ("/o) in Poultry Meat Production Period 1961-1970 1971-1980 1981-1990 1991-2002 India 2.10 3.16 10.42 11.13 World 5.94 5.56 4.75 5.18

7.25 1961 -2002 5.36 Source: Computed from data from web site WWW.FAOstat.org 1.3 Studies (Economic Research Service, USDA, 2004) indicate that the poultry meat is the fastest growing component of global meat demand. In India, the poultry sector growth is being driven by rising incomes, together with the emergence of vertically integrated poultry producers that have reduced consumer prices by lowering production and marketing costs. Integrated production by way of combining breeding, feed milling, contract rearing; a market transition from live birds to chilled and frozen products; and policies that help ensure supplies of competitively priced domestic or imported com and soybeans are keys to future poultry industry growth in India and in other developing countries. The level of consumption poultry meat in India as compared to that at the global level, Asia and Developed & Developing countries as a group and growth pattern in the same have been presented in Table 1.2 and 1.3. 1.4 The poultry meat has achieved significant positive growth rate in both developing and developed countries (see Tables 1.2 and 1.3). However, the developing countries as a group have shown a much higher growth rate in poultry meat consumption as compared to that in developed countries. The share of developing countries in world total poultry consumption has increased from 25% during TE 1963 to 54%) during TE 2002 and that of developed countries has come down from 75% to 46%o during the corresponding period. The
13

share of Asia in poultry meat consumption has increased from 17% to 36 period during the above said period. However, the share of India in world total poultry meat consumption is quite low and has increasedfrom0.85% during TE 1963 to 1.78% during TE 2002. Table 1.2: Consumption of Poultry Meat Period World Asia India Developing Countries Developed Countries

A. Total poult ry meat consumption (lakh Mt) 68.92 TE 1963 15.78 0.79 23.01 91.93 0.96 43.77 TE 1973 164.84 31.06 121.08 1.52 93.22 63.45 184.57 TE 1983 277.78 190.92 132.57 4.76 255.05 TE 1993 445.97 12.44 377.53 254.07 320.11 TE 2002 697.64 B. Per capita poultry mea t consumption (Supply/capita/Yr in kg) TE 1963 0.20 1.07 2.93 0.90 6.90 TE 1973 1.60 4.27 1.40 0.20 11.03 TE 1983 2.40 0.20 2.77 6.10 15.53 TE 1993 8.27 4.07 0.57 4.60 20.07 TE 2002 7.87 11.37 6.83 1.20 24.27 Source: Computed from data downloaded from web site WWW.FAOstat.org Table 1.3: Compounded Annual Growth Rate ("/o) in Poultry Meat Consumption Period World Asia India Developing Countries Developed Countries 3.99 2.51 3.24 2.09

A. Total poulltry meat consumption 7.54 7.52 7.25 1961 - 2002 5.31 7.87 1991-2002 7.49 11.13 5.06 B. Per capita poultry meat consumption 4.42 5.31 5.43 1961 - 2002 3.5 6.12 1991-2002 5.89 8.33 3.58 Source: Computed from data from web site WWW.FAOstat.org

1.5 Poultry meat is a rich source of high quality and balanced protein, vitamins and minerals. The poultry industry sources tend to minimise the significance of religious and cast practices as constraints on growth in poultry consumption, although the consumption of poultry meat is not much associated with religious sentiments as is the case of consumption of bovine (cow meat in particular) and pig meat (pork) is concerned. Poultry meat, which is showing a very high growth in consumption seems to have broad regional acceptance. Poultry meat cost is less compared to mutton and fish. 1.6 The demand of poultry and other meat show seasonal pattern across the states of India. Seasonal religious observances lead to significant fluctuations in demand. In some cases, religious practices e.g., Navaratri, Shivaratri, etc., in UP and other northern states; Ganesh Puja & other religious season in Maharashtra prohibit meat consumption in India. However, the consumption of meat has been found to have increased by Hindus during Durga Puja in West Bengal and North Eastern states and by Muslims during Ramjan, etc. In general, the poultry consumption is higher in urban areas, where both average income and the
14

number of high-income consumers are more. Low poultry prices in South India, due largely to the prevalence of poultry integrators in the region, are reported to have stimulated rapid growth in consumption. 1.7 Poultry is also a rich source of organic manure required to improve the texture and quality of soil. The nitrogen, phosphorus and potassium content of poultry manure is almost twice that of cow manure. It is estimated that the poultry industry provides about 2 million tonne of poultry manure annually. 1.8. The National Commission on Human Nutrition in India has recommended per capita consumption of 180 eggs (about half an egg every day) and 10.8 kg meat for balanced diet. To meet this target, it is estimated that by the year 2010, the requirements will be 180 billion eggs and 9.1 billion kg poultry meat while the estimated production is only around 46.2 billion eggs and 3.04 billion kg poultry meat. This shows that there is a tremendous potential for growth, rapid urbanisation, and increasing demand from growing population in India. This also highlights the importance of conducting studies on poultry sector at frequent intervals in order to identify strengths and weaknesses of the sector and take suitable

Status of Poultry in UP 1.9 The 1998 Animal Census had estimated the total poultry broilers and poultry layers in Uttar Pradesh at 32.32 lakh and 41.09 lakh respectively. The state of UP ranks at 8 in total egg production in the countiy. About 80% eggs come from private commercial poultry farms and the rest comes from backyard poultry. The per capita per annum production of eggs and meat in UP are estimated at 5 eggs and 100 gm meat respectively whereas per capital consumption of these two items in the state is estimated at 18 eggs and 300 gm meat respectively. To meet this gap, about 40 lakh eggs and 2.20 lakh broilers are imported from the neighbouring states. The large gap in per capita consumption and per capita production of eggs and poultry meat indicates that there exists a huge potential to grow in the State of Uttar Pradesh. 1.10. In order to give boost to the poultry sector, the poulti-y units of less than 10,000 birds have been accorded the status of'Agriculture' and the units of more than 10,000 birds have been accorded the status of 'Industry'. There are 5 Government poultry farms where parent stocks of layers and broilers are maintained with the fund being made available from State Plan. 1.11. The poultry development has been found to be concentrated in eastern UP and status of the poultry development in the western part of Uttar Pradesh has not been found to be very encouraging. Literature and the experience of many engaged in poultry sector indicate that the agro-climatic and marketing conditions in western Uttar Pradesh have not been very conducive for the development of the poultry sector. Low level of priority given by GOUP for development of poultry activity is another reason for poor growth of the sector. However, it has been gathered that easy availability of poultry meat at comparatively cheaper rate has on account of the closeness and better connectivity of western UP to major poultiy markets and producing centres like Delhi and Punjab respectively has adversely affected the growth of poultry sector in the western UP as the local producers are not to supply the eggs and poultry meat due to higher per unit cost of production.
15

1.12 The present study has been taken in respect of broiler activity in the districts of BareiUy and Gorakhpur in order to see the status and prospects of broiler activity in two different regions of the state. The selection of broiler activity for the present study was also based on the facts that (i) growth of broiler activity in the state of UP is around 20% as compared to that in case of layers which is growing at the rate of 7-8% at present (ii) comparatively less investment and fast income generation, etc., 1.13 The status of ground level credit flow in the selected districts of BareiUy and Gorakhpur is presented in Table 1.4. Table 1.4: Actual ground level credit flow to poultry sector in the selected districts
Particulars CBs BareiUy district 2001-02 5.000 2002-03 5.000 2003-04 131.000 Gorakhpur dist rict 2001-02 35.0 55.4 2002-03 2003-04 63.0 RRBs 3.0 2.0 11.0 10.0 65.0 75.8 Cooperatives 7.7 22.2 55.2 40.0 20.9 13.9 (Rs. lakh) Total 15.7 29.2 197.2 85.0 141.3 152.7

1.12. The agency-wise refinance to poultry sector and total refinance during last three years in the state of UP is given in Table 1.5. It may be observed from Table 1.5 that the share of refinance to poultry sector in total refinance in Uttar Pradesh has been less than one per cent. Table 1.5: Agency-wise refinance to poultry sector and share in total refinance in UP
Particulars CBs Poultry Sector fRs. lakli) 2001-02 2002-03 2003-04 Total Nil Total Refinance (Rs. lakh) 2001-02 17605.9 2002-03 6840.5 2003-04 17365.2 Total 41811.6 RRBs 1.8 3.3 0.8 6.0 19487.3 40113.1 27175.6 86776.1 SCBs SCARDBs 946.0 880.5 786.1 2612.6 67088.9 64254.7 62872.8 194216.3 PUCBs Total 947.8 883.8 787.0 2618.6 104736.9 117564.5 122178.4 344479.8

Nil 554.7 6356.2 14739.8 21650.7

Nil

25.1 25.1

Share of poultry

0.01%

1.35%

0.76%

16

CHAPTER-II OBJECTIVES AND METHODOLOGY

Scope of the Study 2.1 The overall objective of the study is to gain insights into the nature of production conditions of the broiler units, scheme implementations by various banks, economics and the financial viability of the investment, marketing network and linkages for both the input and the output, etc., in case of the poultry (broilers) sector. 2.2 The following specific objectives have been laid down for the present study:

i. To study the scheme implementation aspects including the technical soundness of investment in poultry units and deviations from stipulated scheme norms by the banking as well as government agencies. ii. To estimate the actual cost of investment by different components, assess the adequacy or otherwise of approved unit cost, analyse the sources of funds and the incidence of under-financing. iii. To examine the production under different types of technology adopted in two different regions, with high and low concentration of poultry farming. iv. To critically examine the management practices, availability of feed and their relationship with weight gains by the broilers. V. To examine and analyse the bird flock chart under different situations and compare them with stipulated norms. vi To estimate the costs and returns of/from maintenance of birds and compare the economics of investment in poultry units across different investment sizes, types of technology and regions. vii. To examine the financial viability of investment in different types of investment environment viz., zones of high and low concentration, investment sizes and types of technology adopted. viii. To examine the bankability of investment in poultry units under different conditions and their repayment behaviour. ix. To analyze price fluctuations, realization and spread and compare the average realized price with cost per unit of production. x. To examine the marketing network and linkages for both input and output and assess their adequacies/inadequacies. xi To examine the problems related to meeting the working capital requirement of poultry enterprise. 17

xii To examine the problem of erratic power supply and other inputs and the other inputs affecting the poultry enterprise. xiii. To examine the issue of corporatisation of poultry industry.

xiv. To estimate the macro benefits of investment in poultry units in terms of income and employment generation. Methodology Selection of Districts 2.3 The submission of LBR-2 is yet to be stabilised (only 35% submission) in the State of UP, it was difficult to know the exact number of units financed in the selected districts. However, based on the refinance figure, Gorakhpur district from Eastern Uttar Pradesh and Bereilly district from Western Uttar Pradesh were selected for the study. Selection of Banlcs/ Banic Branches 2.4 The State LDB (SCARDB) accounts for 99.24% of total refinance (not of investment) to the poultry sector in the State since most of the other banks are not availing refinance from NABARD although they are financing poultry units in the State. Therefore, only State LDB (SCARDB) has been covered in the present study. The SCARDB has 10 branches in Bareiily and 4 branches in Gorakhpur district. However, in Bareiily district, the financing to poultry units was made only by three branches. Based on the discussions with the LDM, AGM (DD), NABARD and the controlling offices of the SCARDB, the branches of Bareiily and Meerganj in Bareiily district and the branches of Bansgaon, Gorakhpur, Khajni and Sahjanwa in Gorakhpur district were selected for the study. 2.5 Apart from the analysis of the ground level data for poultry sector in the selected districts, the discussions with the Asst General Manager (District development), NABARD; Lead District Manager; Controlling offices of various banks located in the selected districts and the officials of Directorate of Animal Husbandry, Lucknow, District Veterinary Officers of Bareiily and Gorakhpur were held in order to finalise the banks branches to be visited for the study. In addition to this, visits to Central Avian Research Institute, Izatnagar, Bareiily, some hatcheries, traders, retailers were taken in order to study the various dimensions related to poultry sector. Sample Size and Stratification of Sample 2.6 A total of 60 sample units ( 30 each from Bareiily and Gorakhpur districts) financed during 2001-02 to 2003-04 were covered in the present study. As the unit size was found to be varying between 200 to 1000 (1300-1400 birds in two cases), only two categories, viz., small (units of birds upto 500) and large (units of birds more than 500) were made in the present study. In addition to this, 10 other entrepreneurs in Bareiily district who have not availed loan from any bank were also covered in order to see the economics of poultry units in the district as most of the units financed by SCARDB in Bareiily district were found to have been closed at the time of field visits. It was decided to cover equal number of sample units from the selected branches of SCARDB in both the districts. As the number of units to 18

be selected per branch was quite less (7 to 8) in Gorakhpur district and therefore, the number of poultry units financed during the study period (2001-02 to 2003-04) was not given any weight for sample selection. The branch-wise number of units covered in the present study is presented in Table 2.1 below:

SI No.

Bank branches

Number of units financed during 2001-02 to 2003-04 67 68 85 62 22 55

Number of units covered

1 2 1 2 3 4

Bareilly District Bareilly branch Meeranganj branch Gorakhpur District Bansgaon branch Gorakhpur branch Khajani branch Sahjanwa branch

15 15 7 8 8 7

Analytical Framework 7. The analytical framework is given as under:

(i) Information on implementation aspects of poultry financing was collected from record of the financing banks and the discussions with the officers of the bank branches were also held in order to get feedback on the investment environment. The information collected from the financing branches include adherence to terms and conditions laid down by the financing bank, systems and procedures adopted for sanction, disbursement and post sanction follow-up and supervision of loans, etc. Data/ Information pertaining to all other objectives was collected through a structured questionnaire from the selected borrowers. (ii) To analyse the costs and benefits of the scheme, detailed data on cost incurred into fixed and variable cost items, and receipts from sale of birds, sale of manure and gunny bags were collected from all the beneficiaries. Fixed costs included depreciation on building and equipment and interest on capital, while variable costs included all operational expenses like cost of day old chicks, feed, litter, medicine, maintenance of sheds, charges for electricity, water, disinfectant, transportation, etc., as well as cost of hired labour. Depreciation of shed and equipment was calculated at the rate of five percent and ten percent per annum on their original costs respectively under straight line method. Net income of the units were arrived at both with and without imputed value of family labour. (iii) The gross receipt, gross cost and net income were estimated both on 'per bird' basis and 'per batch' basis. The financial viability of the investment was assessed by finding the B:C Ratio and the Financial Rate of Return. Break-even analysis was attempted to estimate the number of birds required to be reared so as to even out the capital investment under given cost-price relation.

19

(iv) The units financed by the bank during 2001-02 to 2003-04 were selected for the study. However, only the units completed in all respect and the income of which has already been stabilised, were used for working out the economics of the broiler units. (iv) The Technical Officer (AH) posted in the RO was also involved fiw studying the technical soundness of the investment. Field visits to Collect Primary Data & Time Frame The field visits pertaining to the ex-post evaluation study on Poultry Farming' was taken up by a team of officers comprising Dr. Gyanendra Mani, AGM/AE and Shri K. Venugopal, Manager during the period 11 - 20 April 2005 and 25 April - 03 May 2005 in Bareilly and Gorakhpur Districts respectively. Dr. P.P.Desai, Deputy General Manager/ Technical Officer (Animal Husbandry) also associated with the study Team for the field visits during the period from 1 1 - 1 4 April 2005 and 25 April - 30 May 2005 in Bareilly and Gorakhpur Districts respectively. Reference Year 2.14"

20

CHAPTER-m IMPLEMENTATION OF POULTRY FINANCING SCHEMES

3.1 This chapter covers the profile of the selected districts, implementation aspects of the programme of financing broiler poultry units selected for the study with particular reference to appraisal of loan application loan amount sanctioned, security norms, time lag between sanction of loan and last date of disbursement, down payment, rate of interest, grace period, technical designs, post loan supervision by bank officials, problems pertaining to marketing of broilers, etc. District Profile 3.2 Bareilly district is situated between 280-20" to 280-54" north longitude and 780-58" to 790-49" east latitude. The six Tahsils are divided into 15 blocks. It is surrounded by the district of Udham Singh Nagar and Pilibhit in north, Budaun in South, Shahjahanpur m the Iiast and Rampur in the west respectively. Major income of the district is generated from agriculture, which nearly engages 88.2% of the total working force. 3.3 Gorakhpur district is situated in the north eastern part of the Uttar Pradesh. There are 19 blocks in the districts. It is surrounded by the district of Maharajganj in north, Azamgarh and Mau in the south, Deoria in the East and Sant Kabir Nagar in the west respectively. 3.4 The salient features of the selected districts vis-a-vis U.P. are presented as under: Table 3.1: Salient features of the selected districts vis-a-vis U.P SI. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 Particulars Area 2001 Population 2001 Literacy 2001 Population density 2001 Avg size of holding 1991-92 Gross irrigated area 2001-02 Fertilizer consumption 2001-02 Village electrified 1997-98 Road density 1995-96 Bank deposit per capita 2003-04 Bank credit per capita 2003-04 C:D Ratio 2003-04 Primary health centres 1994-95 Unit sq km lakh no. per cent per sq km ha. %ofGCA Kg./ha. no km per sq km Rs. Rs. per cent per lakh pop Bareilly 4,020 36 48 873.5 0.9 91.1 173.2 1,501 0.3 6,308 2,512 39.8 2.07 Uttar Pradesh 3,321 240,928 37.8 1,661.98 57.4 61 689.2 ^____Li3M_ 0.7 0.9 1 58^ 71.6 150.9 131.7 1,961 0.3 9,015 2,404 26.7 1.52 87,930 0.42 7,186 2,387 33.2 NA Gorakhpur

21

Appraisal of Loan Application and Security norms 3.5 The process of identification of borrowers was found to be inappropriate due to lack of knowledge/expertise among the officials of the financing branches. A simple appraisal/ scrutiny note (presented below) was found to have been attached with every loan application sanctioned by the UP Sahak^ Gram Vikas Bank in Bareilly and Gorakhpur districts. It was also observed that most of the borrowers were not having any experience/skill about the poultry rearing. All these problems resulted the appraisal into mere a formality to complete the paper requirement. The appraisal note did not have information on pre and post development income. 3.6 The sample appraisal note which was found attached with the loan application is given below: Table 3.2: Sample appraisal note of UP SGV Bank SI. No. A Particulars Expenditure (a) Block Capital (for 500 birds) -equipment, shed etc. (b) Working Capital (per cycle) (i) Cost of day old chicks (ii) Expenses on feed (iii) Insurance, vaccination, etc. Total working Capital Total working Capital per annum (4 cycles) Income (4 cycles per annum) 500 birds x 4 cycles @ Rs. 60/- per bird Net income (income -working Capital) Annual debt servicing Income left for consumption per annum Amount (Rs.)

30,000

7,350 11,025 2,500 20,875 83,500 120,000 36,500 13,000 23,500

B C D E

Security Norms 3.7 Although loans were to be advanced against hypothecation of poultry sheds, equipment, etc., in reality, the main consideration at the time of advancement of loan was mortgage of land. The bank accepted land as the collateral security. The amount of bank loan was decided mainly based on the collateral security and not based on actual requirement of the beneficiary or on the size of the unit. Loan Amount Sanctioned and Disbursed 3.8 The maximum loan sanctioned by UP Sahakari Gram Vikas Bank in Gorakhpur district under the scheme was Rs. 1.50 lakhs and the minimum Rs. 12000/-, whereas in Bareilly district the maximum was Rs.1.00 lakh and the minimum Rs.25000/-. It was observed that the amount sanctioned/disbursed by the banks had nothing to do with the financial norms like unit cost, etc. but it was purely based the amount of land available with the borrower to offer as security. The average loan amount applied by the borrowers, amount
22

sanctioned and amount disbursed in respect of the sample beneficiaries of both the districts is indicated in Table -3.3 below: Table 3.3: Loan Amount sanctioned and disbursed to the selected units (Rs.) Branch Sample size Average Loan Applied Average Loan Sanctioned 69,375 33,750 27,286 70,000 35,667 53,333 Average loan Disbursed 65,250 31,875 27,286 56,000 35,667 51,667

Goralchpur District Gorakhpur Khajani Bansgaon Shahajanwa Bareilly District Meerganj Bareilly

8 8 7 7 15 15

74,375 33,750 27,286 70,000 35,667 53,333

Time lag between Sanction of Loan and Date of Disbursement 3.9 Time lag between date of sanction of loan and date of disbursement has a bearing on the time taken for construction of shed and finally on profitability of the investment. The time lag between date of application and date of sanction varied from one day to 15 days in Gorakhpur district, the average time lag being 07 days. In Bareilly district it varied from 01 day to 37 days, the average being 10 days. The time- lag between sanction and first disbursement of loan for the purpose varied from two days to one month in both the districts, the average period being about 07 days. Due to involvement of longer period for construction of broiler sheds, instead of five batches, rearing of only three to four batches of birds was possible during the first year. This has affected the income generation as well as loan repayment performance. Rate of Interest 3.10 Interest rate charged by UP Sahakari Gram Vikas Bank varied from 11 percent to 14.5 percent irrespective of the loan amount. Margin money/ Down Payment 3.11 As the cost of construction of shed was much higher than what was esfimated at sanction, in the case of all categories of poultry units, the actual margin money, i.e., the amount contributed by the beneficiaries was much higher. However, the borrowers had to contribute 10% of the total loan disbursed as share capital which was treated as margin money. Grace Period 3.12 The loan was sancfioned with a repayment period of 5 to 7 years including grace period of six months to one year, irrespective of loan amount. Grace period of six months was sufficient since the beneficiaries were mainly following "all in all out" system of rearing
23

and after every 45 to 50 days one batch was ready for sale, with some beneficiaries repaying the loan even before the grace period was over. Existing Units 3.13 The districts of Bareilly and Goraldipur showed entirely opposite trend in the estabUshmait of units after availing the bank loan. In Bareilly district, only three units were found to be existing out of which two borrowers (brotiiiers) financed by Meerganj branch were having one common unit, and therefore, in true sense only two units out of 30 units covered in Bareilly districts were found to be existing at the time of field visits. However, in Gorakhpur district, 25 out of total 30 units covered in the district were found to be existing at the time of field visits. The branch-wise position of units existing is presented as under: Table 3.4: Number of units existing Branch Sample size Units existing Unit size (no of birds) as sanctioned Upto 500 Goralihpur District Gorakhpur Khajani Bansgaon Shahajanwa Bareilly District Meerganj Bareilly 8 8 7 7 15 15 8 6 6 5 1 2 3 6 7 3 15 10 >500 5 2 0 4 0 5 (Rs.) Avg size of units sanctioned (no. of birds) Upto 500 >500 500 350 315 425 500 500 920 600
-

933
-

1,000

3.14 In order to gain insight into the causes of failure of broiler units, the beneficiaries of non-functional units were also interviewed. It was reported that fluctuating price of broilers, high rate of mortality due to various diseases, faulty site selection, lack of proper heating and cooling systems, lack of proper awareness etc., were the main reasons for closure of the units. The effect of bird flue had a very negative impact on the poultry industry. 3.15 The number of birds sanctioned to different borrowers as an unit was found to be varying a lot and had no relation with the amount sanctioned against that many number of birds. Further, the break-up of different items of loan, e.g. shed cost, cost of equipment, working capital for the first cycle were not available in the appraisal/sanction note. The amount of loan sanctioned and disbursed per unit by different financing branches of UPSGV Bank was also varying irrespective of the size of the unit and there was literally no relation between the two. The average amount of loan sanctioned/ disbursed per category (500 birds and 1000 birds model) has been given in Table 3.5 below:

24

Table 3.5: Average amount of loan sanctioned/ disbursed per category (Rs.) Branch Sample Avg amount sanctioned Avg amount disbursed size per unit of birds per unit of birds Upto 500 , >500 Upto 500 >500 Gorakhpur District Gorakhpur 8 45,000 84,000 44,500 77,700 Khajani 8 32,500 37,500 30,000 37,500 Bansgaon 7 27,286 27,286 Shahajanwa 7 42,500 100,667 35,500 83,333 Avg, Gorakhpur 34,132 81,606 32,158 72,439 Bareilly District Meerganj 15 35,667 35,667 Bareilly 15 45,000 70,000 45,000 65,000 Avg. Bareilly 39,400 70,000 39,400 65,000 Insurance 3.16 The poultry sheds, equipment and birds were to be insured by the beneficiaries. It was observed that none of the sample beneficiaries had made any insurance. Many of the insurance agencies were reluctant to insure the birds in view of the technicalities involved. There was a lack of awareness among the beneficiaries that the shed can be insured. There is need on the part of financing bank to ensure that birds along with the sheds are adequately insured and renewal of insurance is done at regular intervals. Post-loan Supervision 3.17 The post disbursement follow-up by the bank officials was found to be lacking, particularly in Bareilly district. The bank officials were found to be worried only for their recovery of the loan. The bank officials in Bareilly were even not aware about the existence/non-existence of the units. The follow-up and understanding of the bankers with the bon'owers was slightly better in Gorakhpur district and usually the bankers were found to be aware about the units financed by them. There were no guidance from the financing branches to the borrowers regarding establishment of units including the construction of sheds. The status of poultry financing by the branches need to be seriously discussed at the Head Office level. Rearing System 3.18 There are two systems of rearing broilers viz., 'all in all ouf and 'relay' system. Under 'all in all out' system, one batch of birds is stocked and reared for six to seven weeks. Fresh chicks are introduced after disposing off the previous batch. Under 'relay' system batches are introduced weekly/ fortnightly/ monthly depending upon the demand as well as marketing ability. The sample farmers in the study area were mainly following 'all in all out' system of rearing, even though some of the bigger units were following the 'relay' system of rearing.

25

CHAPTER - IV COST OF INVESTMENT AND ITS FINANCING

4.1 The structure and cost of production in the Indian poultry .meat industry vary from region to region. While independent and relatively small scale producers still account for most production, relatively large scale integrated producers account for growing share of output in some region. The present study could cover only small broiler units which were established with the help of bank loans from UPSGVB Ltd. The loan amount was restricted to the value of land available with the borrowers for the mortgage. The investment cost in broiler farming consists of fixed cost incurred on construction of shed, purchase of equipment, installation of Tube well/ hand pump, electrification charges, etc., and the variable cost comprises of costs of day old chicks, cost of litter, feed, medicine, electricity, water, disinfection and cost of hired labour. 4.2 Cost of shed accounts for most of the non-recurring expenditure and constitutes a major component of initial investment and therefore, it affects/influences the profitability of the unit to a large extent not only during initial years of the establishment of the unit but in future also. A good shed is essential to provide an ideal environment where birds can express their genetic potential to the fiill capacity. The purpose of the shed is to confine the birds and protect them from predators and environmental extremes which would cause mortality and reduce growth, poor feed efficiency, etc. The conventional poultry houses are made of cement, steel and asbestos in India. Asbestos has low insulation value (R=0.03 with thickness of 0.3 cm) and cause heat stress to birds during summer, especially tropical environments. Besides, the use of asbestos is discouraged in many developed countries due to its pollution effects. The concept of low cost poultry sheds is yet to be understood by many including the financing banks, entrepreneurs and by the extension department of the state governments. The low cost houses reduce the cost of farming and increase the profitability as well as promote vast potentiality of the small commercial scale, rural poultry sector for improvement of the socio-economic condition of rural poor. 4.3 The low cost housing has not gained much attention in India as well as abroad. The literature on same has also been found to be touching on preliminary aspects of low cost technology for poultry houses. A design of different low cost houses include, (i) poultry shed made of polythene sheets attached to frame, (ii) aluminium roofing instead of concrete, (iii), use of compressed layer of sand (40 cm thickness) under litter with natural ventilation through the opening of walls instead of concrete floor, (iv) use of local materials such as bamboo for construction of house and feeders, bamboo mat, polythene sheet as roofing materials whereas empty oil container, earthen pot and aluminium discs for waterer for small scale commercial broiler units (v) use of a layer of ash of 5 cm on the earthen floor followed by mixture of mud, cow dung and molasses, then a layer of chip followed by thin covering of cement to prevent rat and erosion, increase durability and convenience of cleaning and management. The use of waste mineral oil and bituminous compounds to make mud more weather resistant can also be applied. The maximum research has been conducted in India about rice husk ash cement and found to be suitable for low cost houses. Similarly, several roofing materials such as thatch, tiles, asphalt sheets, aluminium, polythene sheets, etc. may be used for construction of low cost poultry house construction.

26

The Present Study 4.4 In this section, an attempt has been made to study the actual cost of investment vis-a-vis amount sanctioned/ disbursed by thefinancingbank. A total of 60 imits (30 each in Bareilly and Gorakhpur districts) were covered in the present study. In addition to this, 10 other entrepreneurs in Bareilly district who have not availed loan from bank were also covered in order to see the economics of poultry units in the district as most of the units (27 units) financed by SCARDB in Bareilly district were found to have been closed at the time of field visits. During the field visits, the size of the units (in terms of number of birds) was found to be varying fi-om 200 to 1000 birds except in one case where the unit was of 1400 birds. Therefore, the entire sample has been categorised into two groups, viz (i) units of 500 birds (200 to 500 birds) per batch and (ii) units of 1000 birds (more than 500 birds) per batch. Table 4.1: Actual Average cost of investment at historical prices
SI. No. A B C (i) (ii) (iii) (iv) (v) D (i) (ii) (iii) E F Particulars Bareill]J district 500 1000 birds birds 3 10 460 725 Gorakhpur district 500 1000 birds birds 8 17 375 885 (Rs.) Total Sample 500 1000 birds birds 11 27 398 826

Sample size (units covered) Average number of birds existing per unit per batch Items of investment Construction of Poultry Shed Equipments (Feeders, waterers, etc.) Handpump, pipeline/ buckets for water, etc Electricity connection/ lamp, etc Miscellaneous Capital cost Capitalisation of cost on Day old chicks Feed cost Other cost (medicine, electricity, hired labour, etc.,) Total capitalised cost Total Cost

31,313 3,856 525 680 370 36,744 5,938 21,152 1,363

64,816 5,540 1,630 1,126 425 73,537 9,085 31,781 1,569

33,648 3,970 478 730 280 39,106 5,550 16,751 1,294

61,524 5,838 1,330 1,364 510 70,566 12,587 39,260 1,682

33,011 3,939 491 716 305 38,462 5,655 17,952 1,312

62,743 5,728 1,441 1,276 479 71,667 11,290 36,490 1,640

28,453 65,197

42,436 115,973

23,595 62,701

53,529 124,095

24,919 63,381

49,420 121,087

4.5 The actual investment cost of sample units at historical prices has been analysed and presented in Table 4.1. The capital cost has been worked by taking average of actual expenditure incurred on the items of investment at the time of establishment of the units. The capitalised cost on day old chicks, feed and other cost items like medicine, electricity/gas and labour, etc. by taking the average of number of birds reared by the borrowers in different batches (6 batches) during the year 2004-05. 4.6 It may be observed from Table 4.1 that the average investment cost was Rs. 63,381/-, Rs.121,087/- on total sample of 500 birds (11 units) and 1000 birds (27 units). The average capital cost in either group of 500 birds and 1000 birds in Bareilly districts was found to be comparable in Gorakhpur district. The major items of investment cost included Shed Cost (approx 52% of total investment cost). Feed Cost (approx 29% of total investment cost) and
27

cost of day old chicks (9% of total investment cost) over the entire sample size. The investment in sheds was found to be directly related to that with the farm size as the most of the borrowers were found to be have some idea about the space to be required for the birds. As far as investment in equipment is concerned, most the borrowers were found to be following a thumb rule of keeping one feeder and one waterer per twenty birds. Most of the bigger units were found to have installed a hand pump for water purpose whereas the smaller units which were either quite close or within the house itself had not installed any new hand pump for these units. Adequacy of Bank loan 4.7 It may be observed from Table 4.2 that a considerable portion of investment cost had to be met by the beneficiary through their own contribution by way of margin money. The borrowers contribution in case of smaller units found to be more as most of these units were found to be owned by comparatively small fanners who had less land to offer as security and therefore, sanction of less loan as compared to that of large farmers. Table 4.2: Actual Average cost of Investment at historical prices vis-a-vis bank loan disbursed
(Rs.)

SI. No. A B C

Particulars

Total investment Cost Average Bank Loan Borrower's Contribution (% of total investment cost)

Barellly district 500 1000 birds birds 65,197 115,973 65,000 39,400 25,797 50,973 39.6%) (43.9%)

Gorakhpur district 1000 500 birds birds 62,701 124,095 32,158 72,439 30,543 51,656 (48.7%) (41.6%)

Total Sample 500 1000 birds birds 63,381 121,087 69.684 34,133 29,248 51,403 (46.1%) (42.5%)

Note: In case ofBareilly district, 10 units out of total 13 units considered for working out the economics of the poultry units had not availed loan from any bank. However, the total investment cost worked out in BareiUv district (13 units) has been compared with the actual amount disbursed by UPSGV Bank to the sample units (30 units) although most of them were not existing at the time of field visits.

Cost on Investment at Reference Year's Price (2004-05) 4.8 The total investment cost was estimated (see Table 4.3) at reference year (2004-05) prices to bring the costs and benefits to a common time frame for financial analysis on investment. It may be observed from table 4.3 that the capital cost had recorded comparatively more value appreciation as compared to that in case of capitalised cost. Table 4.3: Cost of investment at 2004-05 prices (total sample)
(Rs.)

SI. No. A B C

Particulars Total sample Capital Cost Capitalised Cost Total investment cost

Cost at historical prices 1000 birds 500 birds 11 27 71,667 38,462 49,420 24,919 121,087 63,381

Cost at 2004-05 prices 500 birds 1000 birds 11 27 42,385 79,836 26,739 53,719 69,124 133,555

28

CHAPTER - V ECONOMICS OF THE INVESTMENT

5.1 An attempt has been made in this chapter to estimate the gross return, net return. The Financial Rate of Return has also been analysed and presented in this chapter. The analysis has been made for two set of sample of 500 birds (11 units) and 1000 birds (27 units). Gross Receipts from Broiler Units 5.2 (i) (ii) (iii) Income in case of broiler units was from following three sources: Sale of birds Sale of manure Sale of gunny bags

As the production cycle in case of broiler units is very small (maximum 50 days), the income stabilises in a comparatively less time. Therefore, the units financed even in the year 2003-04 would have stabilised during the year 2004-05. In the present study, the units financed during the year 2001-02, 2002-03 and 2003-04 were covered. The year 2004-05 has been taken as the reference year for the study and the income and expenditure pertaining to the poultry units were collected at the 2004-05 prices. 5.3 As opined by the borrowers, the feed conversion ratio is usually highest in winter and the birds gain two Kgs of body weight in 32 - 35 days by feeding 4 Kgs of feed comprising starter, maize, concentrate and or finisher/developer. As per their version, in summer, it takes usually 40-45 days time to gain 2 Kgs of body weight and birds consume, on an average, 4 Kgs of feed. In rainy season, the birds, on an average, consume 5 Kgs of weight to gain 2 Kgs of body weight. However, the feed conversion ration as well as number of days taken to attain a certain body weight was found to be varying from farm to farm depending upon the quality of chicks, quality of feed, management practices being followed by the entrepreneurs including the hygienic conditions prevailing in the farm, etc. The average gain in body weight, average price realised (farm gate price), and number of days of rearing per cycle (life cycle) are presented in Table 5.1. Table 5.1: Average gain in body weight at the time of sale (Rs.)
SI. No. A B C Particulars Bareill> district 500 birds 1000 birds 1.72 1.79 46 38.12 44 37.04 Gorakhp ur district 500 1000 birds birds 1.81 1.86 43 40.51 41 38.20 Total s a m p l e 500 1000 birds birds 1.76 1.83 45 38.38 42 37.50

Average live weight at the time of sale (kg) Average period of life cycle (days) Average price per kg of live weight (kg)

5.4 It may be observed from Table 5.1 that average days of rearing in Gorakhpur district is less than that in Bareiily district. Better feed conversion ration, better management practices and probably better suitability of agro-climatic conditions in Gorakhpur district could be the possible reasons for better performance of broiler units in Gorakhpur district. It
29

may be observed from the above table that weight gain per bird in case of smaller units is less than that in case of larger units although smaller units were found to have reared the birds for a comparatively longer period. However, the smaller units are able to bargain better price as for as price (farm gate price) realised per kg of broiler is concerned. This is basically the smaller units sell most of their produce to daily hawkers whereas the larger units sell most of their produce to wholesalers who used to lift the entire product at a single point of time. 5.5 The gross return per unit and per broiler is presented in Table 5.2. It may be observed from Table 5.2 that no definite trend is visible as far as gross income per unit or gross income per bird is concerned. The gross income per bird in Gorakhpur district as well as on total sample has been found to be slightly higher on smaller units as compared to that on lager units. The number of birds sold as sown in Table 5.2 excludes the birds died (mortality) during rearing. Table 5.2: Gross receipts from broiler units per batch
SI. No. (i) (ii) (iii) (iv) A B Particulars BareilhV district 500 1000 birds birds 460 725 30,161 48,069 810 1,555 435 680 31,406 50,304 68.27 69.38 Gorakhipur district 500 1000 birds birds 375 885 27,496 62,881 632 1,410 520 965 28,648 65,256 76.40 73.74 (Rs.) Total sample 500 1000 birds birds 398 826 28,223 57,395 681 1,464 497 859 29,400 59,718 73.84 72.32

Actual no birds sold Sale of birds Sale of manure Sale of gunny bags Gross income Gross income per bird

Table 5.3: Break-up of Gross cost per batch

SI. No. Particulars Bareilly district 500 birds A (J) (ii) (iii) Sample size (units covered) Variable Cost Day old chicks Feed cost Other cost (medicine, electricity, interest on working capital, etc.,) Total Variable cost Variable cost per bird Fixed Cost Depreciation on shed Depreciation on equipment Interest on fixed Capital Total Fixed Cost Total Cost (Fixed + Variable) Total cost per bird Imputed value of family labour Gross cost per bird including value of family labour 3 6,371 22,696 1,463 30,530 66.37 522 91 712 1,325 31,855 68.25 736 69.85 1000 birds 10 9,875 34,546 1,706 46,127 63.62 1,080 145 1,076 2,302 48,429 66.80 1,480 68.84 Gorakhpur district 500 1000 birds birds 8 17 5,955 17,974 1,388 25,317 67.51 561 91 591 1,242 26,559 70.82 804 72.97 13,682 42,675 1,828 58,185 65.75 1,025 151 1,358 2,534 60,719 68.61 1,610 70.43 (Rs.) Total Sample 500 birds 11 6,068 19,262 1,408 26,739 67.15 550 91 624 1,265 28,004 70.33 785 72.30 1000 birds 27 12,272 39,664 1,783 53,719 65.06 1,046 149 1,253 2,448 56,167 68.02 1,562 69.91

B (i) (ii) (iii)

E F

30

Gross Cost per Batch 5.6 The gross cost per batch of the selected broiler units on total sample as well as separately for the selected districts has been presented in Table 5.3.It may be seen from Table 5.3 that the average variable cost per bird is more in case of smaller units as compared to that in case of larger units although no definite trend is visible in the prices of day old chicks and feed cost per bird per batch (Table 5.4). As observed in the field, on an average, the entrepreneurs were rearing six batches of broiler imits every year. Therefore, the items of fixed cost (depreciation on shed and other capital items and interest on fixed capital has been estimated for single batch assuming six batches per annum. Table 5.4: Average price of Day Old Chicks and the feed
SI. No. (i) (ii) Particulars Bareilly district 1000 500 birds birds 13.65 13.85 49.34 47.65 Goral(hpur district 1000 500 birds birds 15.46 15.88 48.22 47.93 (Rs.) . Total sample 500 birds 1000 birds 15.25 14.86 48.4 48.02

Day Old Chicks Value of total feed consumed per bird

5.7 The average price of Day Old Chicks (DOCs) in Bareilly district was found to be comparatively lower than that in Gorakhpur district which was primarily because of the fact Central Avian Research Institute (CARI), Izzatnagar (Bareilly) also supplies DOCs to farmers at Rs. 10.50/- whereas the prices of DOCs in market at the same time was found to be ranging between Rs. 14.00/- to Rs. 16.00/- per DOC. Therefore, average DOC prices was estimated to be lower in Bareilly district. Similarly, the combination of feeds viz., starter feed, grower/developer feed, concentrate feed and maize was found to be varying to a large extent even from farmer to farmer. However, value of total sum of all the feed, on an average, was found to be quite comparable across the selected districts of Bareilly and Gorakhpur. No significant difference in the average prices of various feed items was observed as almost all the entrepreneurs were found to be using only branded feeds either manufactured locally (particularly in Gorakhpur district) or by a company having presence in more than one state in country. The price of starter feed per bag of 70 kg, concentrate feed per bag of 70 kg, grower/developer per bag of 70 kg and maize per bag of 85 kg was found to be ranging between Rs. 835/- to Rs. 885/-, Rs. 935/- to Rs. 965/-, Rs. 815/- to Rs. 865/- and Rs. 550/- to Rs. 615/- respecfively. The prices of these feed mixtures was also varying from season to season depending upon the harvesting period of different ingredients of these feed mixtures. Net Return 5.8 The net return over variable cost, total cost excluding and including imputed value of family labour has been estimated and the same in presented in Table 5.5. It may be observed from Table 5.5 that net return over various cost items is lower in Bareilly district as compared to their respective net returns in Gorakhpur district and also on the total sample size. In Bareilly district, the farmers, particularly those who have smaller units, are able to recover only variable cost and have been found to be making losses when the value of their own labour (family labour) was taken into account. The results of the economic analysis of samples in Bareilly is quite discouraging, particularly when institutions like Central Avian Research Institute (CARI) is located at the district head quater itself which claims to be doing lot of work in the field of poultry sector. A discussion with officials of CARI reveals that the 31

*!

good being done by them is not being brought to the knowledge of the actual users due to poor extension support on account of lack of staff as well as sufficient budgetary provision for the same. Table 5.5: Net Return from broiler units
SI. No. A B (i) (ii) (iii) C (i) (ii) (iii) D (i) (ii) (iii) E (i) (ii) (iii) Particulars Bareilly district 1000 500 birds birds 68.27 69.38 63.62 66.8 68.84 Gorakhpur district 500 1000 birds birds 76.4 73.74 67.51 70.82 72.97 65.75 68.61 70.43 (Rs.) Total sample 500 1000 birds birds 73.84 72.32 67.15 70.33 72.3 65.06 68.02 69.91

Gross income per bird Gross cost Total variable cost per bird 66.37 Gross cost per bird excluding 68.25 family labour Gross cost per bird including 69.85 value of family labour (FL) Net return per bird over Variable cost 1.9 Gross cost excluding FL 0.02 Gross cost Including FL (-)1.58 Net return per unit per batcti Variable cost 876 Gross cost excluding FL (-)449 Gross cost Including FL (-)1185 Net return per unit per annuiti Variable cost 5256 (-)2694 Gross cost excluding FL (-)7110 Gross cost Including FL

5.76 2.58 0.54 4177 1875 395 25062 11250 2370

8.89 5.58 3.43 3331 2089 1286 19986 12534 7710

7.99 5.13 3.31 7071 4537 2927 42426 27222 17562

6.69 3.51 1.54 2661 1396 611 15966 8376 3666

7.26 4.3 2.41 5999 3551 1989 35994 21306 11934

5.9 The lower returns, particularly in Bareilly district was also found to be artificially suppressed by the traders who did not want the local entrepreneurs to grow and expand their business. The entire broiler market in Bareilly district was found to be in hands of only four traders who were procuring the majority of the broilers from Punjab & Haryana states through Delhi Mandi. As opined by many retailers, entrepreneurs, etc., these traders were paying less to the local broiler suppliers than the prevailing market prices. A similar situation to this was also observed in Gorakhpur district where some other four traders were controlling the entire Gorakhpur market. However, the local broiler units in Gorakhpur district were able to market their produce through sub-wholesalers and the retailers. As observed and gathered through different sources, the per capita poultry consumption in Gorakhpur district was higher . This coupled with comparatively higher population, had led to higher demand for poultry meat in the district and therefore, the most of poultry units were running in viable proposition even though the number of such units were comparatively more in Gorakhpur district. Financial viability of Investment 5.10 To examine the financial viability of investment in broiler units , Financial Rate of Return, (FRR), Net Present Value (NPV) and the Benefit: Cost Ratio have been worked out. On the basis of cost and benefits calculated in the previous sections, cash flow analysis has been carried out for the life of the project and cash flow statements are presented in Table 5.6 for total sample of 500 birds model (11 units) and in Table 5.7 for total sample of 1000 birds
32

model (27 units) of the present study. The following assumptions have been made in the cash flow analysis: (i) The economic life of the shed and other capital items have been assumed as 10 years and but the cash flow statement has been prepared for 15 years only. The residual value has been taken as 10% of the cost of the investment and has been taken into 10th year of the model. (ii) The cost incurred on chicks, feed and miscellaneous items was excluded from the capital cost and was included in the recurring cost. The interest on working capital and interest on fixed capital have also been included in variable cost and fixed cost respectively. (iii) The costs and returns used were those actually paid out and received by the beneficiaries under both the categories. 5.11 The financial Rate of Return worked out to 14.1 per cent and 23.57 per cent in case of 500 bird model and 1000 bird model. The Net Present Values were estimated negative at Rs. (-)2614/- and Rs. (-)4901/- in case of 500 birds model and 1000 birds model. In Bareilly district, most of the units covered (10 out of total 13 units) were those who had not availed any loan. The general feeling of poor prospect of broiler sector in the Bareilly district can be changed through effective extension network. Employment Generation 5.12 It was observed during the field visits, the units rearing birds less than 500 were being managed by the owners themselves single handedly with occasional help from the family members. However, in most of the cases, it was not a full day engagement of even one person. In case of larger units too, hired labour was not employed in any of the 27 units covered in the study. A total of 1.6 persons (all family labour) per unit were found to have been engaged in the units larger than 500 birds. The imputed value of family labour was calculated based on the prevailing wage rate in that village taking into account the total period of engagement in the poultry unit.

33

g^ .

Table 5.6 : Cash flow and FRR of 500 Units Broiler Sample Broiler In Bareilly & Gorakhpur districts 11 units Years 4

SI. No.

Particulars 0 1

I a) b) c)

Cash Outflow: Capital Cost Replacement cost of Shed & other capital items Recurring Cost Total outflow 42385

168024 168024 168024 168024 168024 168024 168024 168024 1 42385 168024 168024 168024 168024 168024 168024 168024 168024 1

II a) b)

Cash Inflow : Gross income Residual value of Shed & other capital iteriQs_ Total inflow Net cashflow FRR

176400 176400 176400 176400 176400 176400 176400 176400 1

0 176400 176400 176400 17640^ 176400 176400^ 176400 176400 1 -42385

14.10% -2614 1.02 ;1

III

83g^^^376 2 I J 3 7 6 3 8 3 7 ^

8376

8376

8376

8376

IV

NPV
BC RATIO

B^

Table 5.7 : Cash flow and PRR of 1000 Units Broiler Sample Broiler In Bareilly & Gorakhpur districts 27 units Years 4

SI. No.

Particulars

0
I a) b) c) Cash Outflow: Capital Cost Replacement cost of Shed & other capital items Recurring Cost Total outflow II a) b) Cash Inflow: Gross income Residual value of Shed & other capital items Total inflow Net cashflow FRR NPV 79836

337002 337002 337002 337002 337002 337002 337002 337002 3 79836 337002 337002 337002 337002 337002 337002 337002 337002 3

358308 358308 358308 358308 358308 358308 358308 358308 3

0 358308 358308 358308 358308 358308 358308 358308 358308 3 -79836 21306 21306 21306 21306 21306 21306 21306 21306

III

IV

EC RATIO

23.57% -4901 1.03 :1

35

rawMffirisnp~5(i3t^

CHAPTER - VI TECHNICAL SOUNDNESS OF POULTRY UNITS

6.1 In the two districts under study i.e. Bareilly and Gorakhpur, poultry development is being taken up as wage earning activity by the farmers besides other agriculture activities. In both the districts, the activity is yet to make commercial impact. Presently the activity is market driven. There is a gap in production depending on various factors like availability of chicks, availability of feed and the demand for the poultry produce which are being controlled by market forces. In absence of regulated market, the small farmers are exploited to the maximum extent. The role of bankers in financing the poultry units is not significant and pronounced over last three years. In view of the importance of the activity in terms of availability of quality protein, employment generation and diversification for the crop production, and also to ascertain bankers' views on the development of the activity through credit and also to find out the technical soundness of the units already financed by the various banks in above districts, the following observations are made during the course of the study. 6.2 The study was confined to broiler activity due to its low gestation period, better cash returns, and wage opportunities, low level of investments, financing of more number of broiler units as compared to layer units, etc. The technical soundness of the existing units financed by the banks are discussed under following major technical parameters : Construction of shed 6.2.1 Except in 8 cases where design and size of the sheds were found to be satisfactory, in rest of the cases the sheds were not constructed as per the recommended design and were found to have been constructed with locally available building materials as per the understanding of poultry rearer. The scientific approach for construction of shed for better production of healthy birds was not followed due to poor knowledge of the construction of the shed and also lack of advice from technically qualified staff in both the districts. This has resulted in over crowding of the birds, poor light and ventilation, high mortality, high incidence of diseases, low productivity, wastage of feed, water and higher feed conversion ratio. Poultry Equipments 6.2.2 Number of brooders, waterers and feeders varied from unit to unit. There was no standard followed. This affected growth of birds and resulted in wastage of water and feed, spillage of same soiling of litter and high mortality. The cost of equipments varied from Rs.75 to 165 depending on the size. The equipments were available in the local market through dealers. Availability of day old chicks (DOCs) 6.2.3 In both the districts, day old chicks (DOCs) are being supplied by hatchery units through network of dealers on demand from the farmers. In Bareilly district, DOCs are being supplied from Delhi, Punjab, Haryana, from different hatcheries with cost ranging from Rs.13.5- to Rs.l6/- depending on the supply and demand position. During summer days, cost of transportation is charged @ Re. 1/DOC. The supply is not regular and also erratic. It was
36

found that DOCs are supplied without vaccination iuid the vaccination cost has to be borne by the poultry rearers adding to the expenditure. 6.2.4 In Gorakhpur district, DOCs are being supplied from hatcheries existing in Gorakhpur district. It is reported that there are number of hatcheries existing in Gorakhpur district within a radius of 10 kms who are supplying day old chicks not only to Gorakhpur district but also being transported to various districts of the UP, Bihar and also to some extent to Nepal which is bordering the Gorakhpur district. It is estimated that about 30 lakh chicks are being supplied from these units every month. Almost all the hatcheries are confined to Cob breed. It was reported that the colour breeders are being supplied by one of the hatcheries naming Croiler for the backyard poultry imits which ranges from 20 to 200 birds per unit. In both the districts, there is no control of any agency in respect of quality of the chicks supplied. This has resulted into high rate of mortality ranging from 3 - 10% and also higher FCR ratio. Availability of feed 6.2.5 The feed is a major and important component for the economy of the units. In 95% of the units observed, feed was procured from feed manufacturers. Captive feed production was not practised due to the poor knowledge of the poultry rearers. The situation is being totally exploited by the feed manufacturers in terms of the quality and also the cost of the feed. In both the districts, feed is being manufactured and controlled by private feed mills. Majority of them are situated in Gorakhpur. It is reported that there are 13 feed mills in Gorakhpur manufacturing 1,25,000 tonnes of feed per month who are supplying feed to poultry units through a network of dealers. Usually three types of feed are being supplied, they are : Starter, Finisher, Concentrate. The common ingredients used are maize, rice bran, soya bean, groundnut cake, mustard cake, sunflower cake, MBM and in absence of fish meal, artificial Lysine is being used as a component. Due to the demand, the various ingredients are being procured from neighbouring districts depending upon availability of same in local areas. A well knit trading activity for feed ingredients is existing especially in Gorakhpur district. It is also reported that feed is also being supplied not only to the various districts of UP but also being exported largely to Bihar and Nepal. Farmers complained that due to poor quality of the feed, they are unable to produce birds at lower FCR which puts them into low economic returns of the birds. Health coverage 6.2.6 It was observed DOCs are not being vaccinated as per the norm resulting into high mortality. As there is lack of awareness about brooding, the body growth has been stunted. No instance of major poultry diseases are being reported in the sample units. But it was reported by the farmers, bankers as well as officials of Deptt. of Animal Husbandry that due to scare of Fowl fever during 2002, almost all the poultry rearers stopped rearing of birds and large number of poultry units incurred heavy financial losses due to crash in demand for the broilers. This has also resulted in low repayment to the banks and closure of large number of units. An impression has been created among bankers that the poultry activity is a loss making activity hence large units were not sanctioned during the last 2 to 3 years in both the districts. But some of the good entrepreneurs who sailed through the crisis of 2002 were found keeping their flocks with better economic returns. It could be seen if Govt, help would have been timely received by the poultry rearers in crisis time of 2002, in
37

terms of proper advice through various media, losses should have been averted in both the districts. There is a felt need of intervention of both public and private sector for better management of health of the poultry units. All needed vaccines and veterinary medicines are available to poultry units through network of dealers. Management of the Birds 6.2.7 The management of the units was found very poor in terms of hygiene, package of practices, quality of chicks, quality of feed and disposal of dead birds. This present state of affairs is largely attributed to non availability of required training facilities in both the districts. It is surprising to note that the contribution of Central Avian Research Institute (CARI), Bareilly has been found to be poor and is unable to make desirable impact on the poultry industry in the district. The probable reason attributed is poor extension and training facilities with the institute. The transfer of technologies has been also found very poor in both the districts. Training and skill of the borrowers 6.2.8 It was found all the sample borrowers had no formal training and skill in rearing the birds. They were found doing the activity as being told by their neighbour or being advised by the dealer of chicks or supplier. It was complained that people who are actually doing the poultry production activities are never being considered for training facilities. On discussion with the CARI and the Deptt. of AH, it was indicated that due to poor budgetary support and lack of the facilities they are unable to impart training to a large number of borrowers as per the demand. It is reported that 9 out of total 60 borrowers covered in the present study had undergone training in poultry management during last 2 years in both the districts. The poor knowledge of production activity resulted into economic losses and low repayment to the banks. Cleanliness and Hygienic Conditions 6.2.9 It was observed that general cleanliness was maintained in most cases. The sheds were cleaned and disinfected after disposal of one batch and before introduction of fresh batch.

38

CHAPTER-VII BACKWARD AND FORWARD LINKAGES

A: BACKWARD LINKAGES I. Government of Uttar Pradesh's Support to Development of Poultry sector 7.1 To develop the poultry sector, the government need to act on three fronts : formulate policies aimed at attracting large investment in the sector, provide infrastructure and extend help to promote the sector through linking the product to national and international market. The facilities/support being extended by the Government for the development of poultry sector in the state of UP are summarised below: 7.1.1 The Department of Animal Husbandry & Dairying, Govt of U.P. has established 6 hatcheries cum poultry farms which provide quality chicks to poultry farmers. These farms are located at (i) Chanpur in Varanasi district for broiler (ii) Bhojipura in Bareilly district for broiler, (iii) Babugarh in Ghaziabad district for broiler, (iv) Chak Ganjaria in Lucknow district for broiler/layer, (v) Bharari in Jhansi district for broiler/layer and (vi) Chargawan farm in Gorakhpur district for broiler/layer. With the objective of strengthening and making the Government farms self-sustainable, the Ministry of Agriculture and Dairying, Govt, of India has provided financial assistance under 80:20 (Centre:State) scheme to State Government farms. Recently, Centre has made available Rs. 68 lakh as its share to farms in Ghaziabad (Babugarh farm) and Lucknow (Chak Ganjaria farm) districts and Rs. 36 lakh as its share to Chargawan farm in Gorakhpur district. 7.1.2 A scheme of development of Backward poultry has been taken up in UP from the year 2003-04. In the scheme, 17 districts during 2003-04 and 23 districts during 2004-05 were covered where 160 units (50 birds each) @ Rs. 1600/- per beneficiary/unit were provided on 100% subsidy basis. The rest of the districts are proposed to be covered during 2005-06. 7.1.3 The Govt of Uttar Pradesh vide its notification No. 1021/12-P-2-2000 dated 20 April 2000 has provided the Status of 'Agriculture' to the poultry units and or hatcheries upto 10,000 broilers/layers being established in the state of U.P. Thereby, the activity of poultry farming will be eligible for all facilities and concessions being extended to the Agriculture Sector. 7.1.4 The Dept. has established 10 regional disease diagnostic labs at various places in the state and one Central Lab at Lucknow. In addition to this, two PoUurum disease diagnostic labs at Varanasi and Moradabad and three mobile poultry disease diagnostic labs attached to Gorakhpur, Moradabad and Lucknow regions have been established. The Biological Product institute, Lucknow is manufacturing quality poultry vaccines viz., Ranikhet disease. Fowl pox, Spiroketosis, etc. for the use of poultry farms in Uttar Pradesh. 7.1.5 Seven Intensive Poultry Development Projects (IPDPs) each headed by one Chief Technical Officer (CTO-Poultry) assisted by poultry Inspectors are under progress in Lucknow and Kanpur districts in Central UP, in Agra, Aligarh and Bareilly districts in Western UP and in Varanasi and Gorakhpur districts in Eastern UP. The projects aim at helping farmers to get loan under AVRY & other schemes and a 10 days training programme for youth and women having availed loan from banks. However, the interaction with the Chief Technical Officer (Poultry), Bareilly & its staff gives an impression that not much 39

progress could be made in these IPDPs due to non-availability of grant for developmental work even for stationery, etc. Further, the Poultry Inspectors do not even get any TA/DA for making visits in their service area although a total of 478 visits by Poultry Inspectors & 78 visits by CTO were made for extension of poultry sector in the district.. 7.1.6 The Department has constructed 11 poultry sheds of 20,000 birds capacity at Agra, Aligarh, Ghaziabad, Unnao, Etawah, Gonda, Varanasi, Sant Kabir Nagar, Malihabad and Chak Ganjaria (Lucknow) which are likely to be made operational soon. These centres will provide integrated poultry facilities like chicks, feed, medicine, vaccine and to some extent marketing also. 7.1.7 The Dept provides training programmes for the entrepreneurs interested in establishing poultry units at its own centre at Poultry Training Centre, Chak Ganjaria, Lucknow. In addition to this, the Dept also arranges to provide training to the needy entrepreneurs at Central Avian Research Institute, Izzatnagar, Bareilly. 7.2 It has been gathered that the Dept of A.H & Dairy is giving greater emphasis on the development of dairy sector in the state and it is not able to provide much attention on the development of poultry sector due to non-availability of separate budget for poultry development. Therefore, Dept is not able to do the justice with most of the activities listed above which require budgetary support from time to time. II Research & Development - Central Avian Research Institute (CARI)

7.3 Realising the importance of avian research, and to provide all round support to the progress of poultry production in the country, ICAR established the Central Avian Research Institute (CARI) at Izzatnagar, Bareilly on November 02, 1979 by combining Poultry Research Division of Indian Veterinary Research Institute and All India Co-ordinated Research Project on Poultry Breeding at IVRI campus. The CARI is doing lot of research on conservation and utilisation of indigenous fowl, genetic improvement of various avian species, development of economic feeding system for avian species, development of suitable management practices for shelter and reproduction, enhancement of shelf life of products and by-products. However, it was observed in the field that most of research output of CARI were not reaching to the farmers. The discussions with officials of the CARI, Extension Division including the Krishi Vigyan Kendra reveals that lack of poor extension network in terms of manpower, logistic and financial support, etc., has led to poor presence of CARI in the field. 7.4 As mentioned earlier, the Cobb 100 breed owned by Venkateswara Hatcheries is the most popular breed which account for 60-70 per cent of all the broilers produced in India. However, the 'Devendra' Breed of CARI has found some acceptance in the field but due to the short supply of DOCs to the farmers, the breed is not able to register a good share in the market. Design and Construction of Shed 7.5 As mentioned earlier, most of the sample beneficiaries had not constructed the sheds in accordance with the scientific parameters. These houses constructed by the entrepreneurs were found to have been exposed to unhygienic conditions.
40

Power Supply 7.6 One of the major problems faced by the sample beneficiaries was lack of proper power supply. Power supply in both the districts was irregular and lack of power supply for long hours was experienced. Most of the beneficiaries were using gas cylinders for lighting and heating purposes in the sheds. Since, both the districts face extremes of climatic conditions, lack of regular power supply is a major constraint to the development of poultry. Availability of Quality Chicks and Feed 7.7 It was gathered that the broiler units in Bareilly district were getting DOCs mainly from Venkateswara Hatcheries, Dehradun and some other hatcheries in Haldwani and Kashipur of Nainital district. However, most of the small units were getting the DOC through the dealers only located at urban centres like Bareilly, etc. Infact, the dealers were supplying both the feed as well as DOCs to the farmers. The payment for DOCs was found to be mainly in cash whereas credit for some period was allowed in case of feed. 7.8 The broiler units in Gorakhpur district were getting DOCs as well as feeds from Gorakhpur itself as there were about 24 Hatcheries (19 in Gorakhpur only) and 17 Feed manufacturing units (13 in Gorakhpur) in and around Gorakhpur district. The list of Feed Units and the list of Hatcheries in Gorakhpur division are given in Annexure I & Annexure -II. However, most of the hatcheries listed in annexure do not maintain parent stock and get the hatchable eggs from the Hatcheries maintaining parent stock, viz., M/s Kegg Farm and Eastern Hatcheries in Gorakhpur district and Western Hatcheries in Allahabad district. The feed from two reputed brands 'Godrej' feed and 'Gold mohar' from Hindustan Liver were found to be most popular brands amongst the broiler producers as they were maintaining the quality/standard of their feed although these brands were priced slightly higher. It was also reported that the brands were regularly changing the ingredient's combination depending upon the availability and price of these feed ingredients. Therefore, the reliability of most of the other brands were yet to be established although they were in the market for quite some time. It was reported that some of these producers were also changing the name of their brand once that particular brand failed in the market. 7.9 However, it was gathered that most of these hatcheries were supplying poor quality of DOC that too without proper vaccination. It was also gathered that the mortality was comparatively high than the prescribed norm of 2%. There is need on the part of Department of Animal Husbandry and Veterinary Services, Government of UP to initiate strict quality control measures for ensuring supply of good quality chicks to farmers. Management practices 7.10 The management practices in the study area were found to be varying from unit to unit based on the knowledge/skill, resource base and, feeding in terms of quality of feed, quantity and time of feeding, spacing, environment control measures, structure/ design of sheds, vaccination and other veterinary cares, etc. It was observed that the entrepreneurs were hardly getting any technical assistance from the supplier of DOCs, and government extension network.

41

B: FORWARD LINKAGES 7.11 The forward linkages in case of broiler units consist of processing and marketing of broilers being reared at the farms managed by the individual entrepreneurs. Marketing 7.12 The following three marketing channels were found to be working in the selected districts for the marketing of the broilers. (i) Producer- Wholesaler - Retailer - Consumer (ii) Producer - Retailer - Consumer (iii) Producer - Consumer 7.13 The share of these channels in the total marketed produce is given in Table 7.1. It may be observed from Table 7.1 that comparatively larger units sell major portion of their produce to wholesaler who used to lift the entire lot at a time but pay comparatively less to the producers. However, in case of small units, producers prefer selling the major chunk to retailers/ local vendors who pay slightly higher (Rs. 0.50/- to Rs. 1.50/- per kg) rate to the producer but purchase less quantity depending upon his average sale per day. Table 7.1 : Share of marketing channels in total sale
Channel Bareilly 500 birds 1000 birds (per cent) Gorakhpur 1000 birds 500 birds

Producer-Wholesaler-Retailer-Consume r Producer - Retailer - Consumer Producer - Consumer

35 56 9

69 28 3

41 53 6

61 34 5

Table 7.2 : Producer's share in Consumer's rupee

Channel Producers share Wholesaler's margin (per cent) Retailer's margin

Producer-Wholesaler-Retailer-Consum er Producer - Retailer - Consumer Producer - Consumer

71 -78% 77-81% 100%

7.5-13.0%
-

14-19% 19-23%
-

7.14 As gathered from different sources as well as ascertained from producers, wholesalers and retailers, the producer's share was found to be varying from 71% to 78% in case of 'Producer-Wholesaler-Retailer-Consumer' channel and from 77% to 81% in case of 'Producer - Retailer - Consumer' channel. The wholesaler's margin was found to be ranging between 7.5% to 13% in the only channel seen in the study area, i.e., 'Producer-Wholesaler-Retailer-Consumer' channel. The retailer's share was found to be ranging between 14-23% upon different channels available in the study area. It was reported that the margin of various players in the market was varying from season to season, lean period to festive seasons, etc. 7.15 It was observed that the broiler market of Bareilly district was being controlled by a group of 3-5 traders and that of Gorakhpur broiler market by another group of 3-4 traders. It
42

was gathered that the per day consumption of Broiler in Bareilly city itself was ranging between 7000-7500 birds including the supply to army cantt. Similarly, In Gorakhpur too, some 3-4 other traders were quite active who were reportedly selling a minimum of 10 quintals of broilers per day. Processing of Broiler Meat 7.16 Given that India is an attractive poultry destination due to its fast growing consumption, many global poultry companies have been trying to import their products into our country. However, since Indians prefer fresh poultry meat from the wet market, the imported frozen/chilled products are yet to find sufficient market share in Indian poultry market. Further, the Indian broiler market is dominated by a huge number of small private growers, integration of produce or the producers appears to be a distant reality in India, at present. Processing and marketing of poultry ranges from live bird markets or a very primitive on-site slaughter and sale in India to a highly sophisticated, fully automated and international Standard Organisation (ISO) certified facilities and ready-to-eat convenience products, in many parts of the world. However, in case of India, demand for processed poultry meat is itself a great obstacle in the development of processed poultry meat market. This can be addressed through suitable marketing strategy on the part of private/corporate sector. Establishment of a separate Poultry Board could be the right move on the part of Government, if it is serious to capture the huge poultry market at international level.

43

CHAPTER- VIII REPAYMENT PERFORMANCE OF BROILER UNITS

8.1 An attempt has been made in this chapter to examine the repayment performance of the sample beneficiaries. Although the share of poultry sector in total ground level credit flow in Bareilly and Gorakhpur districts has been negligible, a better recovery percentage, if achieved, may encourage the bankers to advance more loan under poultry sector. Sometimes, higher flow of credit is not matched with better recovery percentage but the bankers are forced to disburse more loan under a particular sector either under compulsion from their corporate decision or to comply to some specified government policy forced on them on political considerations. General Recovery Environment in the districts 8.2 The agency-wise overall recovery percentage in Bareilly and Gorakhpur districts is furnished in Table 8.1. The agenecy-wise recovery environment in Gorakhpur district is better than that in Bareilly district (Table 3.1), although district of Bareilly is comparatively more advance/progressive. The farmers in Bareilly district are able to divert more area to cash crops as the average size of agricultural land holding is higher in Bareilly district. Table 8.1 : District-wise recovery position District Bareillv June 2003 June 2004 June 2005 Gorakhpur June 2003 June 2004 June 2005 CCB 32.5% 45.8% 48.7% 15.2% 33.2% 44.3% LDB 34.0% 40.3% 37.4% 62.7% 45.1% 44.0% RRB 69% 71% 71% 63.5% 62% 63.4% CBs NA NA NA NA NA NA

Branch-wise Recovery performance and Reasons for default 8.3 Branch-wise recovery performance of selected borrowers is analysed and presented in Table 8.2. It may be observed from the above table that the general recoveiy in the selected branches has been very poor (less than 15%), particularly in Bansgaon and Sahjanwa branches of Gorakhpur district and the Bareilly branch of Bareilly district. In Bareilly district, since 27 out of total 30 units covered were not existing at the time of field visits, the recovery realised in the accounts of the sample borrowers was from other sources. In Gorakhpur district, the average recovery performance was better in Gorakhpur and Khajani Branches due to better follow-up by the bank officials. The reasons for poor recovery performance in case of Bansgaon and Sahjanwa branches were found to be different. In case of Bansgaon branch, poor recovery was mainly due to poor income generation on account of under financing (Rs. 27,286/- per unit) leading to establishment of smaller units. Whereas poor recovery in case of Sahjanwa branch was mainly because of poor follow-up by the bank officials for monitoring of units as well as recovery of loans.

44

Table-8.2: Branch-wise Recovery Performance of Sample Beneficiaries as on 31.3.2005

Name of branch. 1 Bareilly District Bareilly Branch Meerganj Branch Gorakhpur district Bansgaon Branch Gorakhpur Branch Khajni Branch Sahjanwa Branch Sample size 2 15 15 7 8 8 7 Avg. Loan disbursed Demand 3 53,333 35,667 27,286 65,250 31,870 56,000 25,977 10,533 12,466 18,017 6,688.5 21,278 Collection 4 3,741 3,067 546 9,562 3,887 2,252 Balance 5 22,236 7,466 10,318 8,655 3,773 19,026 1 0 2 3 3 1 NoofA/c regular Recovery % 6 14.4 29.1 4.4 53.1 58.1 10.6

Recovery Performance of Sample Borrowers 8.4 Data on recovery performance of beneficiaries financed by UP Sahakari Gram Vikas Bank in Gorakhpur district is presented in Table 8.3. In Gorakhpur district, out of total 30 sample units selected, 7, 14 and 9 units were found to have been financed during 2001-02, 2002-03 and 2003-04 respectively. The recovery performance of units financed during 2001-02 was 15 percent. The recovery percent of units financed during 2002-03 was better at 27.59 and was highest at 45.65% in case of units during 2003 - 04. The poor recovery of units financed in 2001 - 02 was mainly due to under financing, which led to non starting or closure of units. The better recovery performance of units financed during 2003-04 is mainly due to higher income generation from these units and also repayment from sources other than that from the units financed. Table-8.3: Recovery Performance of Sample Beneficiaries- Goralchpur
Year 1 2001-02 2002-03 2003-04 Sample No.of sample beneficiaries 2 7 14 9 30 Demand 3 105,551 286,407 54,788 446,746 Collection 4 15,858 79,022 25,014^ 119,894 Balance 5 89,693 207,385 29,774 326,852 Recovery % 6 15.00 27.59 45.65 26.84

Table-8.4 : Recovery Performance of Sample Beneficiaries- Bareilly

Year 1 2001-02 2002-03 2003-04 Sample No.of sample beneficiaries 2 9 9 12 30 Demand 3 512,035 386,193 502,665 1,400,893 Collection 4 213,693 84,371 172,408 470,472 Balance 5 298,342 301,822 330,257 930,421 Recovery % 6 41.73 21.85 34.30 33.58

8.5 Data on recovery performance of beneficiaries financed by UP Sahakari Gram Vikas Bank in Bareilly district is presented in Table 8.4. In case of Bareilly district, the recovery percent has shown a declining trend. In case of units financed during 2001-02, the recovery
45

percent was 41.73 percent, which declined to 21.85 percent in case of units financed during 2003-04. This was mainly due to closure of many units threatened by the fear of bird flu. The recovery percent improved to 34.3 percent in case of units financed during 2003-04 due to realisation of better returns. 8.6 Data on recovery performance of sample beneficiaries (8 units) who were financed below Rs. 30000/- by UP Sahakari Gram Vikas Bank indicates that 7 accounts out of total 8 such accounts were showing overdue of the entire demand amount. In these 8 accounts, the actual recovery was found to be only Rs. 3000/- (2.10% of the demand) against a demand of Rs. 47,033/-. These beneficiaries have not been able to meet the recovery demand mainly because they have either had closed down their units or had never set up the unit. The average loan disbursed in these accounts was found to be only Rs. 17,875/-. The discussions with these beneficiaries gave an impression that these beneficiaries had deliberately diverted the funds for other purposes, mainly for consumption. 8.7 The overall repayment performance of the sample beneficiaries in the two districts is found to be poor. One of the major reasons can be attributed to under financing, resulting in increased margin money contributed by the borrower or abandoning the project midway by the boiTower due to lack of funds. The banks will have to finance the units based on its size and the unit cost and not based on collateral security. Since the income level varied based on the market, the beneficiaries were facing lot of difficulty in repaying the loan instalment. This suggests the need for strengthening of extension services for ensuring adoption of better poultry management practices to economise on cost of rearing and also market intervention to enable the poultry farmers to receive remunerative prices for broilers. With the present level of income there is also urgent need on the part of the financing banks to streamline the

Debt Servicing Liability 8.9 In Bareilly district, the question of debt serving from income generated from the units financed by banks to the borrowers establishing poultry units does not arise as majority of units were either not established or had closed in the beginning itself. The fear of attack of bird flu was found to be the common excuse for closing down the poultry units by different borrowers in the district. In case of Gorakhpur district, on an average, farmers of 500 bird model and 1000 bird model were generafing a net income (over variable cost) of Rs. 19,986/and Rs. 42,426/- per annum per unit which were found to be sufficient enough to repay the annual instalment of the bank loan.

46

CHAPTER-IX CORPORATISATION OF POULTRY SECTOR

9.1 Various literature suggests that India is an internationally competitive producer of poultry meat. Producers prices of whole birds in India, while higher than that in Brazil, compare favourably with those in the United States and in other Asian countries. This indicates that Indian producers have generally benefited from improved poultry management practices and, particularly, from local surpluses of com and soybean meal at internationally competitive prices. 9.2 Consistent with its Umguay Round market access commitment, India eliminated its quantitative restrictions on poultry meat imports in April 2001. Imports of poultry meat and products, as well as poultry grandparent breeding stock, are now subject to tariffs ranging from 40 percent for grandparent stock, to 108 percent for poultry meat, to 141 percent for processed products (Table 9.1). However, phytosanitary regulations and clearance procedures applicable to poultry meat have not been clearly defined and this could aim at keeping a check on imports. Tariff levels, along with the poorly defined regulatory barriers, provide significant protection to the poultry industry. Table 9.1: Import policy for poultry and feed ingredients In India HTS Commodity Trade policy Tariff Poultry meat 207 108.00 Free 16.01 Sausages (including poultry) Free 141.28 16.02 Prepared/ preserved poultry meat Free 141.28 Eggs (table/hatching) Free 40.40 407 Egg yolks Free 40.40 408 Poultry grandparent stock Free 40.40 10,511 HTS = Harmonised tariff schedule 'Inclusive of special and additional tariff, as applicable. Source: India Poultry and Products Annual 2001, Gain Report No. IN 104 5, Foreign Agricultural Services, USDA 9.3 In India, the meat consumers usually prefer freshly slaughtered birds over the frozen meat. The poultry production is not much constrained by the seasonality and the agro-climatic conditions although south Indian climate is most suitable where average temperatures, though fairly high, tend to avoid the extremes of heat and cold. However, the availability of feed, particularly, the availability of com and soybean could affect the profitability of the units in area where production of these two crops are on a limited area and account for additional cost on transportation of these feed ingredients. Lack of cold chain facilities and specialised transport vehicles currently limit the feasibility of handling large volumes of chilled or frozen product. At present, the market for frozen poultry meat is limited to a relatively small number of urban based customers. However, if the required support system for frozen poultry meat is developed and are supplied at a competitive prices, the market opportunities may expand significantly. 9.4 In case of poultry production system, the feed cost is considered as a critical component of production cost as it accounts for about 60 to 70% of total cost of production. Reducing feed costs include steps to improve quality of food, captive feed preparation,
47

improve feed conversion ratio including innovations such as pelletization and automated feeding, as well as improvements in feed availability and logistics. The current feeding practices suggest that the role of com and soybean meal in broiler feed will increase with future spread of integrated poultry operations. Com and soybean meal are the major feeds used in the broiler industry, but feed composition varies somewhat by region and season. The com as a source of energy and soybean meal as a source of protein are considered as technically superior ingredients for raising broilers. However, these ingredients are sometimes changed by some available substitutes of energy and protein depending on the relative market prices. The most common com substitutes for energy are broken rice, millet, and wheat. Fish meal, sunflower meal (decoticated), and peanut meal are the most common protein substitutes for soybean meal. However, as on date, the availability of com and soybean meal at competitive prices, either through local production or imports, seems to hold the key to growth and competitiveness. The major poultry feed ingredients in India is given in Table 9.2 below. Table 9.2: Major poultry feed ingredients in India Protein Other Soybean meal Soy oil Fish meal Sunflower oil Sunflower meal Minerals (Decorticated) Peanut meal Rice bran Meat meal 60 - 65% Shares: 30 - 35% 5% Source: Economic Research Service Survey. In: India's Poultry Sector : Development and Prospects, USDA, WRS 04-03, January 2004, p 14. Inilndia's Poultry Sector : Development and Prospects, USDA, WRS 04-03, January 2004, p 14. 9.5 With the removal of quantitative restrictions on most imports as a result of the Uruguay Round Agreement on Agriculture, imports on most feeds and ingredients are unrestricted and subject only to import duties (Table 8.3). Imports of com for feed use are now administered by a tariff-rate quota (TRQ) regime that was introduced in June 2000. Importers of com under the TRQ are to be given quota allotments by the Exim Facilitation Committee within the Office of the Director General Foreign Trade (DGFT) in the Ministry of Commerce. Earlier, prior to TRQ regime, com was imported at a zero tariff but was subject to adhoc govemment decisions on whether com could be imported for feed or industrial use. Imports of Sorghum can be done by an agency appointed by the govemment, subject to a duty of 50 percent. 9.6 Oil meal and feed concentrates can be imported without quantitative restrictions, subject to tariff of 35-40 percent. Imports of oil meals and concentrates remain negligible because India has a large exportable surplus of oil meals, intemal prices are generally near or below world prices. Ingredient Source: Energy Com Broken rice Pearl millet Wheat Sorghum Rice bran

48

Table 9.3 Import policy for feed ingredients in India

HTS 100,590 100;700 2,306 230,120 230990-02

Commodity Com, for feed Sorghum Oil meals Fish meal Concentrate for compound feeds

Trade policy' Free; TRQ^ Free Free Free

Tariff 108.00 141.28 141.28 40.40 40.40

HTS = Harmonised tariff schedule 'Canalized and TRQ items require import licences. ^Inclusive of special and additional tariff, as applicable. ^TRQ is 400,OOO tonnes within quota tariff rate of 15% and above quota tariff of 50 %. Source: India Poultry and Products Annual 200 f Gain Report No. IN 104 5, Foreign Agricultural Services, USDA. In:India's Poultry Sector : Development and Prospects, USDA, WRS 04-03, Januaiy 2004, p 30. 9.7 Although a number of poultry breeds are available in India, the Cobb 100 breed owned by Venkateshwara Hatcheries (VH) currently accounts for 60-70 percent of all broilers in India. Cobb 100 is a relatively older breed based on breeding stock imported form USA and benefitting from a long period of adaptation to Indian climatic conditions. Venkateshwara Hatcheries has a nation-wide infrastructure that supplies its breed to broiler units, either as grandparents, parents or Day Old Chicks (DOCs), and also provides comprehensive veterinary services to its growers. A Cobb 500 line and Cobb 400 (cross of Cobb 500 & Cobb 100) are also under development. Other breeds like Ross (U.K.), Hybro (Netherlands), Hubbard (U.S.), Avian (U.S.) and Anak (Israel) are also being produced and marketed in India. Infact, the strong positioning of Cobb 100 in Indian market is due to government restrictions on imports of grandparent lines (till 1995) and better entrepreneurial skill of founder of VH. The Cobb 100 is now well established in Indian climate and it has proved to be a good 'breeder's bird'. However, it is primarily a layer breed and, therefore, provides a relatively less meat yield (75%) as compared to newly developed broiler breeds which yield upto 77-78% meat. Further, although Indian firms are importing breeding stocks and other breeding technology from foreign, particularly after removal of trade restriction in 1995, there is currently no Foreign Direct Investment in broiler breeding in India. 9.8 The Indian broiler sector operates completely as a live-bird market, with poultry sold as live-bird and slaughtered on retail shops. This practice is in accordance of low level of faith of customers in the retailer for quality of the broiler, lack of cold chain facilities and consumer preference. The preference for fresh food also extends to the belief that it is superior in taste in texture. It is expected that the live-bird market will likely continue to dominate in India for the next few years due to slow pace of demand for chilled/frozen meat from household sector. However, if a suitable strategy is drawn to increase the institutional demand for the.chilled/frQzen meat, the demonstration effect of the same may increase the

9.9 A regional comparison of the economics of broiler meat production in India reveals that the average variable cost, fixed cost, producer prices, retail prices are generally low in the southern and western states of the country as compared to those in northern and the eastern states on account of better integration of poultry production and marketing system in 49

the southern and western states. Under integration, farmers are generally unaffected from the volatility in producers in the regional live-bird market. In the southern and western regions, the standard grower's contract pays the grower a flat rate per live-weight kg of harvested bird plus a potential performance bonus (or penalty). The integrator provides the DOCs, feed, medicine, veterinary services and management guidance and is also responsible for removing and marketing of mature birds. The farmer provides the house and equipment to the integrator's specification, power, fiiel, labour and day-to-day management. Bonuses are most commonly awarded for exceeding contractual performance bench-marks for mortality and feed conversion ratio. 9.10 In the southern states, the contract growing is well established and there is high degree of loyalty. The contract farming in western states is a recent development and switching over to other partners even after contract with some one else is common. The contract farming is yet to be thought of in northern and eastern states. The concept of contract farming in northern and eastern states need to be formalised in order to develop the poultry sector to a large scale activity. A simple model of contract broiler farming is given as under:

Fig : Contract Broiler Farming

SMALL BROILER FARMS

LARGE BROILER FARMS

RETAIL SALES

TRADERS/ BULK PURCHASER

RETAIL SALES

BULK SALES

HOTELS

RETAILS

50

CHAPTER - X MACRO IMPACT OF POULTRY INVESTMENT

10.1 The estimate of benefits from poultry investment at micro- level has been discussed in chapter - 5. In this chapter, an attempt has been made to estimate the impact of the investment at the macro level. For this purpose, the estimate of benefits from the investment at unit level has been blown up to measure the macro level impact. The impact has been assessed in terms of broiler meat production, aggregate net income and employment generation in the study area. The total number of poultry units financed in the selected districts during the study period (2001-02 to 2003-04) is presented in Table 10.1. Table 10.1: Total Broiler units financed in the selected districts
District 2001-02 No of Loan units disbursed 2002-03 Loan No of units disbursed (Rs. lakh) 2003-04 No of Loan disbursed units

Bareilly Gorakhpur Total

10 128 138

7.65 39.08 46.73

33 52 85

22.21 21.52 43.73

128 44 172

55.17 19.34 74.51

10.2 It may be seen from Table 10.1 that during the study period (the years 2001-02 to 2003-04), a total of 395 poultry units were financed in Bareilly and Gorakhpur districts to which a loan amount of Rs. 164.97 lakh was disbursed. Out of this, 171 units with a bank loan of Rs. 85.03 lakh was financed in Bareilly district and the rest 224 units with a bank loan disbursement of Rs. 79.94 lakh was disbursed in Gorakhpur district. The average loan disbursement per account was found to be Rs. 49,725- and Rs. 35,688/- in Bareilly and Gorakhpur districts respectively. Addition to Gross domestic Product 10.3 The estimate of Gross Domestic Product (GDP) due to investment in poultry (broiler) sector is presented in Table 10.2. Table 10.2: Total Broiler units financed in the selected districts
District Units financed No of units Loan disbursed Proportionate number of successful units Loan No of disbursed units Gross income per annum (Rs. lakh) Contribution to GDP

Bareilly Gorakhpur Total

171 224 395

85.03 79.94 164.97

17 187 219

8.5 66.62 80.15

257,808 326,165

43.83 609.93 653.76

Employment Generation 10.4 The additional recurring employment opportunities created due to investment in broiler poultry in the study area has been estimated and presented in Table 10.2. The total number of days of enagement has been arrived at by adding 4 days per batch (on account of cleaning of poultry shed and making arrangements for arrival of fresh batch of broilers) to average number of days of rearing of birds in the selected districts of Bareilly and Gorakhpur. Total employment generation in Bareilly and Gorakhpur districts due to 51

financing of broiler units (adjusted to proportionate success rate) was estimated at 4590 and 75,174 mandays respectively which was equivalent to 16 and 268 manyears respectively assuming 280 days employment a year as full employment.
Table 10.2: Impact on Employment Generation
District No. of successful units Avg. No. of days of rearing No. of days of engagement per unit Per annum Per batch Total employment in mandays (Rs. in lakh) Engagement In equivalent manyears

Bareilly

Gorakhpur
Total

17 187 204

45 42

45 67

270 402

4,590 75,174

16 268 284

10.5 A perusal of the above table reveals that the impact of the investment was much higher in Gorakhpur district than in Bareilly district due to higher percentage of successful units financed in the former between 2001-02 to 2003-04. However, the overall impact of poultry financing in both districts does not seem to be considerable as the financing of broiler was low and most of these units were comparatively small which did not have scope of employing labour on hiring basis.

52

CHAPTER- XI SUMMARY AND CONCLUSIONS

1. The Value of Output from Livestock Sector in India is estimated at Rs. 156.08 thousand crore and Rs. 120.94 thousand crore respectively. The share of livestock sector in the country's GDP remained more or less constant at around 5.5% since 1995-96. The share of poultry meat in total meat production has increased globally from 19.79% in 1981 to 30.14% in 2002 and from 4.46 % in 1981 to 12.10 % in 2002 in India. (Para 1.1) 2. The poultry meat has achieved significant positive growth rate in both developing and developed countries. However, the share of India in world total poultry meat consumption is quite low and has increased from 0.85% during TE 1963 to 1.78% during TE 2002. (Para 1.4) 3. Poultry is also a rich source of organic manure required to improve the texture and quality of soil. The nitrogen, phosphorus and potassium content of poultry manure is almost twice that of cow manure. It is estimated that the poultry industry provides about 2 million tonnes of poultry manure annually. (Para 1.7) 4. In Uttar Pradesh, the growth of the poultry sector in eastern part of the state is more pronounced than in the western Uttar Pradesh. (Para 1.10) 5. The State LDB (SCARDB) accounts for 99.24% of total NABARD refinance to the poultry sector in the State since most of the other banks are not availing refinance from NABARD although they are financing poultry units in the State of UP. Therefore, only State LDB (SCARDB) has been covered in the present study. Based on the number of units financed by various branches, the branches of Bareilly and Meerganj in Bareilly district and the branches of Bansgaon, Gorakhpur, Khajni and Sahjanwa in Gorakhpur district were selected for the study. (Para 2.4) 6. A total of 60 sample units ( 30 each from Bareilly and Gorakhpur districts) financed during 2001-02 to 2003-04 representing various sizes of investment in terms of number of birds per cycle per unit were covered in the study. In addition to this, 10 other entrepreneurs in Bareilly district who have not availed loan from any bank were also covered in order to see the economics of poultry units in the district as most of the units financed by SCARDB in Bareilly district were found to be inoperative at the time of the field visits. The reference period of the study was Financial Year 2004-05. (Para 2.6 & 2.14) 7. The process of identification of borrowers by the banks was found to be faulty due to lack of knowledge/expertise among the officials of the financing branches. A simple appraisal/ scrutiny note circulated by the controlling office of the bank was found to have been attached with each loan applicafion sanctioned by the UP Sahakari Gram Vikas Bank in the selected districts. It was also observed that most of the borrowers were not having any experience in poultry rearing. (Para 3.5)
53

8. Although loans were to be advanced against hypothecation of poultry sheds, equipment, etc., in reality, the main consideration at the time of advancement of loan was mortgage of land. The bank accepted land as the collateral security. The amount of bank loan was decided mainly based on the collateral security and not based on actual requirement of the beneficiary or on the size of the unit. (Para 3.7) 9. The maximum loan sanctioned by UP Sahakari Gram Vikas Bank in Gorakhpur district under the scheme was Rs. 1.50 lakh and the minimum Rs. 12000/-, whereas in Bareilly district the maximum and the minimum were Rs. 1.00 lakh Rs.25000/- respectively. It was observed that the amount sanctioned/disbursed by the banks had nothing to do with the financial norms like unit cost, etc. but it was purely based on the amount of land available with the borrower to offer as security. (Para 3.8) 10. The time lag between date of application and date of sanction varied from one day to 15 days in Gorakhpur district, the average time lag being 07 days. In Bareilly district it varied from 01 day to 37 days, the average being 10 days. The time- lag between sanction and first disbursement of loan for the purpose varied between two days to one month in both the districts, the average period being about 07 days. (Para 3.9) 11. Interest rate charged by UP Sahakari Gram Vikas Bank varied from 11 percent to 14.5 percent irrespective of the loan amount. (Para 3.10) 12. The districts of Bareilly and Gorakhpur showed entirely opposite trend in the establishment of units after availing the bank loan. In Bareilly district, only three units were found to be existing out of 30 units at the time of field visits. However, in Gorakhpur district, 25 out of total 30 units covered were found to be existing at the time of field visits. (Para 3.13) 13. In order to gain insight into the causes of failure of broiler units, the beneficiaries of non-fiinctional units were also interviewed. It was reported that fluctuating price of broilers, high rate of mortality due to various diseases, faulty site selection, lack of proper heating and cooling systems, lack of proper awareness etc., were the main reasons for closure of the units. The effect of bird flu had an adverse impact on the poultry industry in the state. (Para 3.14) 14. The number of birds per unit sanctioned to different borrowers was found to be varying a lot and had no relation with the amount sanctioned against that many number of birds. The average amt of loan disbursed in case of units having birds upto 500 and 1000 (more than 500 to around 1000 birds) was found to be Rs. 32,158/- and Rs. 72,439/- in Gorakhpur district and Rs. 39,400/- and Rs. 65,000/- in Bareilly district. (Para 3.15) 15. The poultry sheds, equipment and birds were to be insured by the beneficiaries. It was observed that none of the sample beneficiaries had insured the same. Many of the insurance agencies were reluctant to insure the birds in view of the technicalities involved. There was a lack of awareness among the beneficiaries that even the shed can be insured. There is need on the part of financing bank to ensure that birds along with the sheds are adequately insured and renewal of insurance is done at regular intervals. (Para 3.16) 16. The post disbursement follow-up by the bank officials was found to be lacking, particularly in Bareilly district. The bank officials were found to be worried only for their recovery of the loan. The bank officials in Bareilly were not even aware of the current status
54

of the units. The follow-up and understanding of the bankers with the borrowers was slightly better in Gorakhpur district and usually the bankers were found to be aware about the units financed by them. (Para 3.17) 17. All the sample farmers in the study area were found to be following 'all in all out' system of broiler rearing. In the study area some of the other bigger units (non-sample units) were following the'relay'system of rearing. (Para 3.18) 18. During the field visits, the average size of the units (in terms of number of birds) was found to be varying from 200 to 1000 birds except in one case (unit size=1400 birds). Therefore, the entire sample has been categorised into two groups, viz (i) units of 500 birds (200 to 500 birds) per batch and (ii) units of 1000 birds (more than 500 birds to 1000 birds) per batch. (Para 4.4) 19. The average investment cost was Rs. 63,381/- and Rs.121,087/- on total sample of 500 birds (11 units) and 1000 birds (27 units). The major items of investment cost included Shed Cost (51.9% of total investment cost). Feed Cost (29.5% of total investment cost) and cost of day old chicks ( (Para 4.6) 20. A considerable portion (43.1% on an average) of investment cost had to be met by the beneficiaries through their own contribution by way of margin money. The borrowers contribution in case of smaller units was found to be more as most of these units were found to be owned by small farmers who had less land to offer as security and therefore, sanction of less loan as compared to that of large farmers. (Para 4.7) 21. The average gain in body weight per bird in Gorakhpur district (41 days to 43 days) was higher (1.85 kg) than that in Bareilly district (1.76 kg) although average number of days per cycle was higher in Bareilly district (44 to 46 days). Not much difference was observed in average sale price of broilers in Bareilly and Gorakhpur districts and was found to be ranging from Rs. 37.04 per kg to Rs. 40.51 per kg. (Para 5.3) 22. The weight gain per bird in case of smaller units was less than that in case of larger units although smaller units were found to have reared the birds for a comparatively longer period. However, the smaller units are able to bargain better as far as price (farm gate price) realised per kg of broiler is concerned. (Para 5.3) 23. The average gross income per bird in Gorakhpur district (Rs. 76.40 in case of smaller unit and Rs. 73.74 in case of larger units) was found to be slightly higher than that in Bareilly district ((Rs. 68.27 in case smaller unit and Rs. 69.38 in case of larger units). (Para 5.5) 24. The net return over various cost items was found to be lower in Bareilly district as compared to their respective net returns in Gorakhpur district. In Bareilly district, the farmers, particularly those who have smaller units, were able to recover only variable cost and have been found to be making losses when the value of their own labour (family labour) was taken into account. (Para 5.8) 25. The average net return per bird over variable cost in case of smaller units and larger units was Rs. 6.69 and Rs. 7.26 respectively. The average net return per unit per annum over variable cost in case of smaller units and larger units was Rs. 15,966/- and Rs. 35,994/55

respectively and the average net return per unit per annum over gross cost including family labour in case of smaller units and larger units was Rs. 3,666/- and Rs. 11,934/- respectively. (Table 5.5) 26. The financial Rate of Return worked out to 14.1 per cent and 23.57 per cent in case of 500 bird model and 1000 bird model. The Net Present Values were estimated negative at Rs. (-)2614/- and Rs. (-)4901/- in case of 500 birds model and 1000 birds model. In Bareilly district, most of the units covered (10 out of total 13 units) were those who had not availed any loan. (Para 5.11) 27. All the units covered in the study was found to have been managed by family members only. The smaller units were found to be managed by owners single handedly with occasional support from other family member. In case of some of the larger units, more than one person was engaged to manage the unit. (Para 5.12) 28. In the majority of the sample units visited by the team, it was observed that sheds are constructed with locally available building materials as per the understanding of poultry rearer. The scientific approach for construction of shed for better production of healthy birds was not followed due to poor knowledge of the construction of the shed and also lack of advice from technically qualified staff in both the districts. This has resulted in over crowding of the birds, poor light and ventilation, high mortality, (Para 6.2.1) 29. Number of brooders, waterers and feeders varied from unit to unit. There was no standard followed. This affected growth of birds, wastage of water and feed, spillage of same soiling of litter and high mortality. (Para 6.2.2) 30. In both the districts, day old chicks (DOCs) are being supplied by hatchery units through network of dealers on demand from the farmers. The supply was not regular. It was found that DOCs are supplied without vaccination and the vaccination cost has to be borne by the poultry rearers adding to their expenditure. (Para 6.2.3) 31. The feed is a major and important component for the economy of the units. Captive feed production was not practised due to the poor knowledge of the poultry rearers. The situation is being totally exploited by the feed manufacturers in terms of the quality and also the cost of the feed. Due to the demand, the various ingredients are being procured from neighbouring districts depending upon availability of same in local areas. A well knit trading activity for feed ingredients is existing in Gorakhpur district. (Para 6.2.5) 32. The management of the units was found very poor in terms of hygiene, package of practices, quality of chicks, quality of feed and disposal of dead birds. This present state of affairs is largely attributed to non availability of required training facilities in both the districts. It is surprising to note that the contribution of Central Avian Research Institute (CARI), Bareilly has been found to be poor and the institute is unable to make desirable impact on the poultry industry in the district. The probable reason attributed is poor extension and training facilities with the institute. The transfer of technologies has been also found very poor in both the districts. (Para 6.2.7)

56

33. It was observed that general cleanliness was maintained in most cases in Gorakhpur district. The sheds were cleaned and disinfected after disposal of one batch and before introduction of fresh batch. (Para 6.2.9) 34. It was gathered that the Dept of A.H & Dairy was giving greater emphasis on the development of dairy sector in the state and it was not able to provide much attention on the development of poultry sector due to non-availability of separate budget for poultry development. Therefore, Dept has not been able to do the justice with most of the activities listed above which require budgetary support from time to time. (Para7.2) 35. Power supply in both the districts was irregular, with lack of power supply for long hours. Most of the beneficiaries were using gas cylinders for lighting and heating purposes in the sheds. Since, both the districts face extremes of climatic conditions, lack of regular power supply is a major constraint to the development of poultry. (Para7.6) 36. It was gathered that the broiler units in Bareilly district were getting DOCs mainly from Venkateswara Hatcheries, Dehradun and some other hatcheries in Haldwani and Kashipur in Nainital district. The broiler units in Gorakhpur district were getting DOCs as well as feeds from Gorakhpur itself as there were about 24 Hatcheries (19 in Gorakhpur only) and 17 Feed manufacturing units (13 in Gorakhpur) in and around Gorakhpur district. (Para7.7 & 7.8) 37. The feed from two reputed brands 'Godrej' feed and 'Gold mohar' from Hindustan Liver were found to be most popular brands amongst the broiler producers as they were maintaining the quality/standard of their feed although these brands were priced slightly higher. It was also reported that the manufacturers were regularly changing the composition of the feed depending upon the price of different ingredients of the feed. (Para7.8) 38. Three marketing channel viz., (i) Producer- Wholesaler - Retailer - Consumer, (ii) Producer - Retailer - Consumer and (iii) Producer - Consumer were found to be working in Bareilly and Gorakhpur districts for the marketing of the broilers. (Para7.12) 39. As gathered from different sources as well as ascertained from producers, wholesalers and retailers, the producer's share was found to be varying from 71% to 78% in case of 'Producer-Wholesaler-Retailer-Consumer' channel and from 77% to 81% in case of Producer - Retailer - Consumer' channel. The wholesaler's margin was found to be ranging between 7.5% to 13% in the only channel seen in the study area, i.e., 'Producer- WholesalerRetailer- Consumer' channel. The retailer's share was found to be ranging from 14-23% depending upon different channels available in the study area. (Para7.14) 40. Branch-wise recovery performance of selected borrowers indicates that the general recovery in the selected branches has been very poor (less than 15%), particularly in Bansgaon and Sahjanwa branches of Gorakhpur district and the Bareilly branch of Bareilly district. (Para8.3) 41. Data of recovery performance of sample beneficiaries (8 units) who were financed below Rs. 30000/- by UP Sahakari Gram Vikas Bank indicates that 7 accounts out of total 8 such accounts were showing overdue of the entire demand amount. In these 8 accounts, the actual recovery was found to be only Rs. 3000/- (2.10% of the demand) against a demand of
57

Rs. 47,033/-. These beneficiaries have not been able to meet the recovery demand mainly because they have either had closed down their units Or had never set up the unit. The average loan disbursed in these accounts was found to be only Rs. 17,875/-. The discussions with these beneficiaries gave an impression that these beneficiaries had deliberately diverted the funds for other purposes, mainly for consumption. (Para8.6) 42. In Bareilly district, the question of debt serving from income generated from the units financed by banks to the borrowers establishing poultry units does not arise as majority of units were either not established or had closed in the beginning itself. In case of Gorakhpur district, on an average, farmers were generating sufficient net income (over variable cost) to repay the annual instalment of the bank loan. (Para8.9) 43. Various literature suggests that India is an internationally competitive producer of poultry meat. Producers prices of whole birds in India, while higher than that in Brazil, compare favourably with those in the United States and in other Asian countries. This indicates that Indian producers have generally benefitted from improved poultry management practices and, particularly, from local surpluses of com and soybean meal at internationally competitive prices. (Para 9.1) 44. Consistent with its Uruguay Round market access commitment, India eliminated its quantitative restrictions on poultry meat imports in April 2001. Imports of poultry meat and products, as well as poultry grandparent breeding stock, are now subject to tariffs ranging from 40 percent for grandparent stock, to 108 percent for poultry meat, to 141 percent for processed products. However, phytosanitary regulations and clearance procedures applicable to poultry meat have not been clearly defined and this could aim at keeping a check on imports. (Para 9.2) 45. In India, the meat consumers usually prefer freshly slaughtered birds over the frozen meat. The poultry production is not much constrained by the seasonality and the agro-climatic conditions although south Indian climate is most suitable where average temperatures, though fairly high, tend to avoid the extremes of heat and cold. At present, the market for frozen poultry meat is limited to a relatively small number of urban based customers. However, if the required support system for frozen poultry meat is developed and/ the meat is sold at competitive prices, the market opportunities may expand significantly. (Para9.3) 46. In case of poultry production system, the feed cost is considered as a critical component of production cost as it accounts for about 55 to 65% of total cost of production. Reducing feed cost includes steps to improve feed conversion ratio including innovations such as pelletization and automated feeding, as well as improvements in feed purchasing and logistics. The current feeding practices suggest that the role of corn and soybean meal in broiler feed will increase with future spread of integrated poultry operations. (Para 9.4) 47. With the removal of quantitative restrictions on most imports as a result of the Uruguay Round Agreement on Agriculture, imports on most feeds and ingredients are unrestricted and subject only to import duties. Importers of com under the TRQ are to be given quota allotments by the Exim Facilitation Committee within the Office of the Director General Foreign Trade (DGFT) in the Ministry of Commerce. Imports of Sorghum can be done by an agency appointed by the govemment, subject to a duty of 50 percent. (Para 9.5)
58

48. Oil meal and feed concentrates can be imported without quantitative restrictions, subject to tariff of 35-40 percent. Imports of oil meals and concentrates remain negligible because India has a large exportable surplus of oil meals and internal prices are generally near or below world prices. (Para 9.6) 49. Although a number of poultry breeds are available in India, the Cobb 100 breed developed by Venkateshwara Hatcheries (VH) currently accounts for 60-70 percent of all broilers in India. Cobb 100 is a relatively older breed based on breeding stock imported from USA. Other breeds like Ross (U.K.), Hybro (Netherlands), Hubbard (U.S.), Avian (U.S.) and Anak (Israel) are also being produced and marketed in India. (Para 9.7) 50. During the study period (the years 2001-02 to 2003-04), a total of 395 units of poultry units were financed in Bareilly and Gorakhpur districts to which a loan amount of Rs. 164.97 lakh was disbursed. Out of this, 171 units with a bank loan of Rs. 85.03 lakh was financed in Bareilly district and the rest 224 units with a bank loan disbursement of Rs. 79.94 lakh was disbursed in Gorakhpur district. The contribution of the broiler units to the Gross Domestic Product (GDP) was estimated at Rs. 43.83 lakh in Bareilly and Rs 609.93 lakh in Gorakhpur district. (Para 10.2) 51. Total employment generation in Bareilly and Gorakhpur districts due to financing of broiler units (adjusted to proportionate success rate) was estimated at 4,590 and 75,174 mandays respectively which was equivalent to 16 and 268 manyears respectively. (Para 10.4)

59

Tl

ANNEXUREI LIST OF FEED MANUFACTURING UNITS IN AND AROUND GORAKHPUR

SI no 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Name of Factory M/s Agvet Foods & Feeds (Gorakhpur) M/s Naveen Feed Industries (Gorakhpur) M/s Pooja Agro Feed Mills (Gorakhpur) M/s S.RAssociate (Gorakhpur) M/s Asian Agro Products (Gorakhpur) M/s Star Feed (Gorakhpur) M/s Om Fees Industries (Gorakhpur) M/s Soni Feed (Padrauna) M/s Novratan Agro (Gorakhpur) M/s Usana Feed Mills (Gorakhpur) M/s Hi-Tech Agro Product (Gorakhpur) M/s Akash Feed (Gorakhpur) M/s Shree Ram Feed Industries (GIDA, Gorakhpur) M/s Durga Agro Farms Ltd. (Gorakhpur) M/s Gold Star Feed Mills (Gonda) M/s Deepak Feed (Deoria) M/s M/s Aman Feed Industries (Padrauna) Name of contact person Shri P.K.Mall Shri S.P.Singh Yadav Office phone no. 2,345,151 2,260,009 2,204,168 2,200,446 2,266,791 2,250,185 2,506,100 244,455 2,280,801 2,260,176 2,260,810 2,682,350 . 2,209,121 2,500,926 223,915 229,008 246,755

Shri Raj Kumar Gupta Shri Vinod Pandey Shri S.B.Mishra. Shri Shamsejoha Shri Ashutosh Mishra Shri Pradeep Jaiswal Shri Kapil Dodhi. Shri Rajnesh Dewadi Shri Mohan Jaiswal Shri Ravindra Jaiswal Shri Jitendra Yadav. Shri Anuj Poddar Shri Jalaludden Shri Dr. K.P.Gupta Shri Mumtaj Ahajjiad

60

ANNEXURE II LIST OF HATCHERIES IN AND AROUND GORAKHPUR SI no. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Name of Factory M/s Kegg Farms (P) Ltd. (Gorakhpur) M/s Hena Hatcheries (Gorakhpur) M/s Shivam Hatcheries (Deoria) M/s Shree Hatcheries (Gorakhpur) M/s Hi - Tech Hatcheries (Gorakhpur) M/s Harayana Hatcheries (Gorakhpur) M/s Laxmi Hatcheries (Gorakhpur) M/s Rathi Hatcheries (Gorakhpur) M/s Kissan Hatcheries (Gorakhpur) M/s Eastern Hatcheries (Gorakhpur) M/s Golden Hatcheries (Gorakhpur) M/s Agro Poultry Product (Gorakhpur) M/s Pooja Hatcheries (Gorakhpur) M/s Siddharth Hatcheries (Gorakhpur) M/s Raj Shree Hatcheries (Gorakhpur) M/s Agvet Breeding Forms & Hatcheries (Gorakhpur) M/s Durga Forms Products Limited (Gorakhpur) M/s S.B. Hatcheries (Gorakhpur) M/s United Poultry (Gonda) M/s Avadh Hatcheries (Gonda) M/s Akash Hatcheries ( Gorakhpur) M/s Soni Hatcheries (Padrauna) M/s Aman Hatcheries (Padrauna) M/s Saba Hatcheries (Gorakhpur) Name of Contact Person. Shri A.K.Singh Shri N.P.Singh Shri Uma Shankar Gupta Shri S.P.Singh Yadav. Shri Mohan Jaiswal Shri Mohd. Azim. Shri Balraj Shri Krishna Rathi Shri Tej Singh Shri S.B.Mishra Shri Sanjay Gupta Shri Om Prakash Jaiswal Shri Raj Kumar Gupta Shri Satish Singh Shri Rajendra K.C.Mishra Shri P.K.Mall Shri Anuj Poddar Shri P.K.Singh Shri Mohmood Shri Jalajudden Shri Ravindra Jaiswal Shri Pradeep Jaiswal Shri Mumtaj Ahmed Shri A.H.Khan Office Phone no. 2,338,233 2,260,486 241,745 2,260,009 2,260,810 226,133 2,260,851 2,260,850 2,261,954 2,256,791 2,203,809 2,726,351 2,204,168 2,201,743 2,339,077 2,345,151 2,500,926 2,282,681 223,560 223,915 2,682,350 244,455 246,755 2,251,073

61

illl

REPORTS PUBLISHED UNDER EVALUATION STUDY SERIES OF NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT A: Reports Published by the Head Office of NABARD Series Title of Evaluation Study Reports Year of No. Publication 1 Minor Irrigation scheme - Construction of New Wells and installation of 1977 Pumpsets thereon in Sholapur District, Maharastra 2 Minor Irrigation Scheme - Installation of shallow Tubewells in Kamal 197^District, Haryana 3 Bhadra Land Development Project - Scheme for Reclamation,and 1977 Development of Land, Kamataka 4 Land Development under Nagarjuna Sagar Project, Miryalaguda Taluka, 1977 Andhra Pradesh 5 Dairy Development Scheme in Jagadhri Block of Ambala District, 1978 Haryana 6 Dairy Development Scheme in Moga Area of Faridcot District, Punjab 1978 7 Poultry Development Scheme in Mulkanoor, Karimnagar District, 1979 Andhra Pradesh 8 Mechanised Fishing Boats in South Canara District, Kamataka 1979 9 Development of Acid Gardens in Nef lore District, Andhra Pradesh 1981 10 Groundwater Irrigation in Kota District, Rajasthan 1982 11 Minor Irrigation in Bhojpur District, Bihar 1982 12 Development of Grape Cultivation in Bijapur District, Kamataka 1982 13 River Lift Irrigation Scheme in Pune District, Maharastra 1982 14 Dairy Development Scheme in Westem Uttar Pradesh 1982 15 River Lift Irrigation Scheme in Kolhapur District, Maharashtra 1982 16 Sheep Rearing in Nalgonda District, Andhra Pradesh 1982 17 Development of Coffee Plantation in Lower Palnis Area, Madurai 1983 District, Tamil Nadu 18 Public Tubewells and River Lifts in Orissa 1984 19 Power Tillers in Hooghly District, West Bengal 1985 20 Commercial Poultry in Krishna District, Andhra Pradesh 1986 21 Dugwelllrrigation in Palghat District, Kerala 1986 22 Tractors in North Bihar 1986 23 Dairy Development in Darjeeling District, West Bengal 1986 24 Tractors in Varanasi, Ghazipur and Jaunpur Districts, Uttar Pradesh 1987 25 Tractors and Power Tillers in Tamil Nadu '^^'^

^%.

IF

26 Minor Irrigation in Muzaffar Nagar District, Uttar Pradesh 27 Dairy Development in Quilon District, Kerala 28 . Dugwell Irrigation in Dhenkanal District, Orissa 29 Bamboo and Shallow Tubewells in Pumea District, Bihar 30 Dugwell Irrigtion in Nasik District, Maharashtra 31 Calf Rearing in North Arcot, Salem and Coimbatore Districts, Tamil Nadu 32 Minor Irrigation in Allahabad District, Uttar Pradesh 33 Coconut Development in Quiion District 34 Minor Irrigation in Purulia District, West Bengal 35 Sprinkler Irrigation in Semi-Arid Areas, Rajasthan 36 Dugwell Irrigation in Amravati District, Maharashtra 37 Marine Fisheries in Coastal Gujarat and Maharashtra 38 Financing of Shallow Tubewells under Massive National Programme in Haryana. 39 Financing of Apple Orchards in Hill Districts, Uttar Pradesh 40 Work animals and Animal driven Carts in Meerut District, Uttar Pradesh 41 Inland Fishery in Krishna District, Andhra Pradesh 42 Bio-Gas Plants in Nainital and Rampur Districts, Uttar Pradesh 43 Impact of NFS investments 44 Lift Irrigation Schemes in Maharashtra 45 Mendhwan Watershed Project under IGWDP - Maharastra State Copies of the Evaluation Study reports can be obtained from . The Chief General Manager, Department of Economic Analysis and Research (DEAR), National Bank for Agriculture and Rural Development, 4"" Floor, C Wing, G-Block, P.B. No.-8121, Bandra-Kuria Complex, Bandra East, Mumbai 400 051.

1987 1987 1988 1988 1988 1988 1988 1988 1988 1989 1989 1989 1989 1991 1991 1991 1991 1994 1995 1999

63

B. Reports Pii!>Hshcd by Regional Offices of NABARD R.O. Series No. AHMEDABAD 1 2 3 4 5 6 7 Title of Evaluation Study Report Year of Publication 1989 1989 1991 1992 1994
2003 2003

Poultry Development Scheme in Gujarat Dairy Development Scheme in Mehsana Distnct, Gujarat Lift Irrigation Scheme of Ukai Left Bank Mair Canal , Gujarat Financing of Tractors in Mehsana and Rajkot Districts. Gujarat Inveivtments financed under IRDP in Valsad District, Gujarat Market yard in Jetpur, Rajkot District, Gujrat Marine Fisheries in Junagarh District

BANGALORE 1 Development of Grape Gardens in Bangalore and Kolar Districts, Kamataka 2 3 4 5 6 7 8 9 10 Borewell Financing in Chitradurga and Kora District, Kamataka Development of Coffee Garden in Kamataka

1992 1990 1992 1993

Sericulture Development in Mysore and Hassan Districts, Kamataka Lift Irrigation Schemes in Belgaum District, Kamataka Poultry (Broiler) Development in Banglore (Rural) and Banglore (urban) Districts, Kamataka Drip Iirigation Programme in Chitradurga District, Kamataka Dairy Development in Kolar and Shimoga Districts of Kamataka Sericulture in Kolar and Tumkur Districts of Kamataka Fuelwood Development Projects in Kamataka

2000 2001 2002 2003 2003 2003 1988 1989 1992 1994 2005

BHOPAL . . . . 1 Dugwell and Shallow Tubewell Irrigation in Narsinghpur District, Madhya Pradesh 2 3 4
5

Tractor Financing in Raisen and Vidisha Districts, Madhya Pradesh Commercial layer poultry development in Indore District, M.P. IRDP in Sagar District, Madhya Pradesh Rural Non-Farm Sector in Ujjain District, Madhya Pradesh

6^

BHUBANESWAR 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Betelvine Gardens in Puri District, Orissa Tractors in Sambalpur District, Orissa Dairy Development in Cuttack and Ganjam District, Orissa Brackish Water Prawn Culture in Puri District, Orissa Minor Irrigation in Sambalpur District, Orissa Shallow Tubewells in Undivided Cuttack and Undivided Puri Districts District Rural Industries Project (DRIP) and Priman.' Lending Institutions (PLI) Training Programme in Undivided Ganjam District Group Financing under Farm Mechanisation Investment under RIDF in Rural Bridges SHG Bank Linkage Programme in KBK Region in Orissa Poultry Farming in Punjab Dairy Development Schemes in Kamal and Rohtak Districts, Haryana Tractors in Haryana Grape Gardens in Hisar District of Haryana Inland Fisheries in Patiala and Bathinda Districts of Punjab Financial Viability of Tractors in Punjab Rural Non Farm Sector in Ludhiana and Sangmr D istricts of Punj ab Water Conveyance System in Rewari and Mehendragarh Districts of Haryana Cold Storage in Punjab Dairy Financing in Kumkshetra and Kaithal Districts of Haryana Self Help Groups in Kamal, Gurgaon & Bhiwani Districts of Haryana Poultry (Layers) in Sangmr and Gurdaspur Districts in Punjab Financing of Tubewells in Bathinda, Hosiarpur and Rorar Districts Agro and Food Processing Units in Haryana Evaluation of Rural Roads under RIDF in Punj ab '^^ '^^ 1994 2000 2002
2003 2004 2005

CHANDIGARH 1987 1987 1994 1998 2000 2001 2001 2001 2001 2002 2002 2003 2003 2003 2003 2004 2005

16 Dairy Development in Punjab 17 - Tractor Financing in Kaithal and Faridabad Districts in Haryana

^5"

CHENNAI 1 Poultry Development in Salem District, Tamil Nadu 2 Dugwell Irrigation in Pudukkottai and North Arcot Districts, Tamil Nadu 3 Tea Gardens in the Nilgiris District, Tamil Nadu 4 Minor Irrigation Investments under Massive Assistance Programme in South 5 Jasmine Investments in Salem and Madurai Districts, Tamil Nadu 6 Mini Dairy in Coimbatore & Periyar Districts, Tamil Nadu 7 Marine Fisheries in Tamil Nadu 8 Sericulture in Tamil Nadu 9 IRDP in Tamil Nadu 10 Modem Rice Mills in Tamil Nadu 11 Coconut Development in Tamil Nadu 12 Minor Irrigation Credit Programme Under KfVV - NB VII in Ramnad and Trichy Districts in Tamil Nadu 13 District Rural Industries Project in Tirunelveli District 14 Cold Storage in Tamil Nadu GUWAHATI 1 Private Shallow Tubewelis and Lift Points in Assam 2 Inland Fishery in West Tripura District, Tripura 3 IRDP in Nagaon District, Assam 4 Farm Mechanisation (Power Tillers) in Sibsagar District, Assam HYDERABAD 1 Public Tubewelis in Khammam District, Andhra Pradesh 2 Development of Grape Gardens in Ranga Reddy District, Andhra Pradesh 3 Dugwell Irrigation in Chitoor District, Andhra Pradesh 4 Mango Orchards in Krishna and Khammam Districts, Andhra Pradesh 5 On Farm Development in Khammam and Krishna Districts 6 Inland Fishery in West Godavari District, A.P. 7 Dairy Development in Krishna District, Andhra Pradesh 8 Poultry Layer Investment in Andhra Pradesh 9 Food (Mango) Processing in Visakhapatnam and Chittoor Districts, Andhra Pradesh 10 Sheep Rearing in Mahabubnagar & West Godavari Districts 11 Sericulture Investments in Andhra Pradesh

1988 1989 1990 1991 1992 1994 1998 1999 2000 2001 2002 2002 2003 2003 1989 1992 2000 2000 1988 1989 1989 1991 1995 1996 1999 2000 2001 2002 2003

4>C

JAIPUR 1 Minor Irrigation Structures in Kherwara P.S., Udaipur District, Rajasthan 2 Tractors in Alwar District, Rajasthan 3 Market Yard in Kekri - Ajmer District, Rajasthan 4 Borewell in Jodhpur District, Rajasthan 5 IRDP in Alwar District, Rajasthan 6 Poultry in Anjmer District, Rajasthan 7 Sprinkler Irrigation Schemes in Banner Dist., Rajasthan 8 Dairy Schemes in Bharatpur District of Rajasthan 9 Water Management Schemes in Jaipur District of Rajasthan 10 Minor Irrigation Schemes in Bikaner District of Rajsthan 11 Orange Cultivation Schemes in Jhalwar District of Rajasthan JAMMU 1 IRDP in BaramuUah District, Jammu and Kashmir 2 Tractors in Jammu District, Jammu and Kashmir KOLKATA 1 2 3 4 5 6 7 8 9 10 Inland Fisheries Scheme in Nadia District, West Bengal Betelvine Gardens in Midnapore District, West Bengal Bullock and Bullock Carts in Malda District, West Bengal Poultry Farming in Medinipur District, West Bengal Minor Irrigation Schemes in Birbhum District, West Bengal Floriculture in Midnapore District of West Bengal Agro based Industries in Burdwan, Bankura and Nadia Districts SCT/TSP Programmes in West Bengal Rural Roads under RIDF in West Bengal Land Development Sector in West Bengal

1988
1991 1991 1993 1995 1995 1997 1999 2001 2001 2002

1992 1995

1987 1989 1991 1999 2000 2002 2004 2004 2005 2005

LUCKNOW 1 2 3 4 5 6 7 8 Evaluation of Minor Irrigation Scheme in Jhansi District, Uttar Pradesh Tractors in Western Uttar Pradesh Inland Fishery in Azamgarh aud Deoria Districts, U.P. NFS in Moradabad District, UP Saghan Mini Dairy Project in Dist. Allahabad, U.P. Mushroom Cultivation in Dehradun District, U.P. Grape in Muzaffemagar District, U.P. Minor Irrigation in Rae Bareli District, U.P.
1988 1992 1994 1995 1996 1997 1998 1998

67

PATNA 1 2 3 '^ PUNE 1 2 3 4 5 6 7 8 9 SHIMLA Shallow Tubewells in Darbhanga, Madhubani and Samastipur Districts, Bihar Deep Tubewells in Bihar Dairy Development in Begusarai and Singhbhum Districts, Bihar Minor Irrigation Schemes in Samastipur District, Bihar Lift Irrigation Schemes in Ahmednagar District, Maharashtra Well Irrigation in Aurangabad Distric, Maharashtra Poultry Development in Pune District, Maharashtra Grape Gardens in Nasik District, Maharashtra Land Development in command area of Kukkadi Project, Maharashtra Farm Mechanisation in Ahmednagar District, Maharashtra Evaluation Study of Rajani Watershed Project in Yavatmal District Evaluation Study of Shedashi-Wavoshi Watershed Project in Yavatmal District Rice Mills in Maharashtra 1988 1989 1989 1996 1988 1991 1991 1993 1995 1999 1999 1999 2002

1 Dairy Development in Mandi District, Himachal Pradesh 1997 2 Apple Cultivation in Himachal Pradesh 2004 TRIVANDRUM 1 Betelvine gardens in Trivandrum District, Kerala 1988 2 Broiler Pouhry Development in Emakulam District, Kerala 1990 3 Development of Rubber Plantation in Kottayama District, Kerala 1991 4 Fisheries Development in Kollam District, Kerala 1992 5 Farm Mechanisation in Palkhad and Emakulam Districts, Kerala 1995 6 Rural Non-Farm Sector in Malappuram and Kozhikode Districts of 1998 Kerala State 7 Sprinkler Irrigation in Arecanut Gardens in Kasargod District of Kerala 2002 8 Dairy Development in Kollam District of Kerala 2002 9 Minor Irrigation in Kasargod and Kannur Districts of Kerala 2003 10 Rural Non-Farm sector activities in Kasargod and Karmur Districts of 2003 Kerala 11 Self-Help Groups in Waynad District of Kerala 2004 Copies of the Evaluation Study reports can be obtained from: The Chief General Manager, Department of Economic Analysis and Research (DEAR), National Bank for Agriculture and Rural Development, 4"' Floor, C Wing, G-Block, P.B. No. - 8121, Bandra-Kurla Complex, Plot No. C-24, Bandra Kurla Complex, Bandra East, Mumbai 400 05 1.

68