chapter - iii analysis of performance and problems of...

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CHAPTER - III

ANALYSIS OF PERFORMANCE AND PROBLEMS OF

POULTRY FARMS

The poultry industry in India has emerged as the most dynamic and

rapidly expanding segment of livestock economy. What was once started as a

novelty in 1970s as egg and broiler production has now turned out to be a

highly organized agribusiness. The growth of the industry with steady

production of 1800 million kg of poultry meat, 40 billion eggs per year and

employment generation of about 3 million people indicates the future prospects

for the industry. Changing food habits, rising income of the middle class

people, presence of private players, rising market demand of the Indian poultry

products in the export are some of the contributing factors for the growth of the

industry.1

EGG PRODUCTION IN NAMAKKAL

Namakkal ranked second largest egg producing zone among the more

than 30 National Egg Co-ordination Committee Zones in the country. Egg

consumption over the last five years has been steadily increasing by 6 or 7%

annually. Consumption of chicken has been increasing by 10% annually

during the same period. The strength of layer birds (egg laying chicken) in the

Namakkal Zone as on March 2011 stood at 4.59 crore. Namakkal District

accounted for 80% of this population followed by Erode with 12% while other

districts shared the remaining 8%.2

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TABLE 3.1

AVERAGE STRENGTH OF LAYER BIRDS IN NAMAKKAL ZONE IN

THE LAST 12 FINANCIAL YEARS

Year In Lakhs

2000-01 171.18

2001-02 212.71

2002-03 225.42

2003-04 219.19

2004-05 234.49

2005-06 307.34

2006-07 339.79

2007-08 367.35

2008-09 398.62

2009-10 407.34

2010-11 447.19

2011-12 500

Source : The Hindu, Namakkal, July 15, 2012

Statistics available in the NECC states that daily average egg production

in Namakkal Zone has increased to 341.18 lakh eggs a day [in July 2012]

which is 55.77 lakh eggs more than the average daily production in July 2011-

that stood at nearly 285.41 lakh eggs.3

EGG PRODUCTION CYCLE AND PROCESS

Poultry farming is raising chickens, turkeys, ducks and foul for meat and

egg. Poultry farm can be of Breeding farms where they raise poultry for meat

or Layer farms where they produce eggs. Today poultry raising is a big

business in Namakkal District in Tamilnadu. The activity that requires special

attention is the area of production. The products that comes out from the farm

are chicken, egg and manure for plants.

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Egg Production Cycle

The product cycle of Egg Production is as follows :

From a fertilized egg after a particular period of incubation, the chicks

are hatched. When they are one day old, they are brought to the farm where

they are developed into hen. When it reaches 18 weeks of age, it would start

laying eggs. These eggs are taken for human consumption. After the bird

reaches 72 weeks of age, they are culled for meat. The main market for culled

bird is Kerala. The Hen at all these three stages can be used for human

consumption.

Production Process

Egg production consists of the following process :

1. A well raised land with poultry sheds should be selected. Water logging

and flooding near the sheds should be avoided. Adequate facility for

water and electricity has to be arranged. There should be an approach

road for supply of chicks, feed, veterinary aid and nearness to market for

cull birds and eggs.

2. The improved strain of one day old healthy egger type chicks from a

hatchery has to be bought.

3. Highly balanced feed has to be provided.

Starter Feed (upto 8 weeks of age)

Grower feed (9 to 16 weeks of age) and

Layer feed (17 to 72 weeks of age)

4. When the chicks are in the age of 9 weeks, they should be transferred to

grower shed and fed with grower feed. This should be done till 18

weeks.

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5. After the bird is 18 weeks old, it must be transferred to larger cage and

must fed with layer feed. At this stage, the bird must be provided with

the feed of high nutrient value.

6. From this stage, the bird would start laying eggs. The eggs can be bullet

size eggs, medium size eggs and large size eggs. The medium eggs are

mainly for export market as it would be very strong and is suitable for

storage also.

7. The waste produced is the litter which is usually used as a manure for

agricultural land.

8. The gunny bags which are emptied after using feed can be sold in the

local market.

9. After 72 weeks of productivity the birds are culled for meat which is

chicken.4

This chapter deals with

A. Assessment of performances of poultry farms in the area of

i. Production, ii. Finance iii. Marketing of eggs

B. Problems of poultry farms and

C. Poultry industry and its future prospects

A. ASSESSMENT OF PERFORMANCES OF POULTRY FARMS

I. ASSESSMENT OF PRODUCTION PERFORMANCES

The production performance depends upon various factors such as cost

of initial capital investment, cost of chick, selection of right breed, efficient

management, economical feeding and effective disease control measures. In

this section of the study production cost of Small Size Farms (SSF) (only with

company feed and All-in-All-out method of rearing), Medium Size Farms

(MSF) and Large Size Farms (LSF) (both with own feed and company feed and

multiple method of rearing) has been calculated for Namakkal Division and

Tiruchengode Division of Namakkal District, with an aim to find out the most

advantageous size. The internal performance in egg production has been

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studied with reference to the various elements of costs. An analysis of the

composition of cost has also been made.

Cost of Production

The production cost in poultry farming is divided into two major categories.

1. Cost of investment in fixed assets and 2. Variable cost.

The investments in assets are fixed in nature and are classified as fixed

investment for the purpose of calculation. Fixed costs are those costs, which

do not change with changes in the number of birds reared within the limits of

plant capacity. Usually, the amount of fixed cost involved in the farming

operations is determined by the size/capacity of the farm. The poultry farms

normally have fixed assets like brooding shed (BS), brooding equipment (BE),

grower shed (GS), grower equipment (GE), layer shed (LS), layer cages (LG),

miscellaneous expenses (ME) including feed plant and other investment in the

form of plant and machinery, labour quarters and water tank. For this purpose

farmers have to invest heavily at the initial stage. The depreciation is charged

on these assets according to straight-line method at the rate of 10% per annum

and interest is also calculated on an average at a rate of 14% per annum (as per

the rate adopted by the commercial banks) on the amount of investment in

fixed assets, chick cost and on one fifth of feed cost as interest on capital

invested.

The next category of cost is the variable cost. Variable costs are those

costs, which tends to vary directly with variation in the number of birds reared.

It includes chick cost (CC), feed cost (FC), mortality adjusted (MA), electricity

(E), vaccination and medicine (VM) labour charges (LC) and other overhead

expenses (OE) including marketing of eggs in the form of selling and

distribution expenses. These expenses are recurring in nature and the entire

amount is to be added to calculate cost of production.

The following cost of production function and net return function has

been used for analysis of data:

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Cost of Production = Depreciated Value of Fixed Cost + Variable Cost +

Maintenance Cost of Fixed Assets + Interest on Capital.

Net Returns = Income from (Sale of Eggs + Cull Birds + Manure +

Gunny Bags) Cost of Production.

The total cost of production has been arrived at by using the above

function for the sample farms on the basis of their size with own feed and

company feed consumption. The number of eggs produced were calculated

with reference to each size of farms. The mortality losses were also considered.

Similarly the breakages were calculated while computing the number of eggs

produced and hence the data will not affect the estimation of costs and may be

treated as adjusted cost after mortality and breakages.

For the purpose of assessing the production performance of poultry

farms in Namakkal Division and Tiruchengode Division of Namakkal District

on the basis of their size the following variables have been used.

1. Average fixed capital investment per 1000 birds.

2. Average variable cost per 1000 birds

3. Average total cost per 1000 birds

4. Average income per 1000 birds.

5. Average Net returns per 1000 birds.

Descriptive Analysis of farms based on the size of the farms has been

done on the above variables. Data relating to the performance of the farms for

a period of four years from 2008-09 to 2011-12 have been collected for the

purpose of the study.

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i) PRODUCTION COST OF SMALL SCALE FARMING (SSF)

(1,000-10,000 BIRDS)

(only with company feed adopting All-In-All out method of rearing)

In the case of Small Scale Farming (SSF) the farm owners prefer to feed

the birds with feed supplied by the feed manufacturing company (company

feed) rather than having their own feed manufacturing unit (own feed) as it

involves high cost of installation which is not within the affordable capacity of

the small farmers. Further the method of rearing birds are carried out with All-

in-All-out system as there is no need to have specific house in the name of

Grower or Layer house. Therefore from the day one till the birds are culled

they are reared in only one house.

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1. Average Fixed Capital Investment per 1000 Birds

After evaluating the components of fixed capital investments in Small

Scale Farming the various heads are consolidated to calculate the overall

investment in fixed assets. Various components of Fixed capital investment in

Small Scale Farming includes

a) Shed and Equipments Cost

b) Miscellaneous costs of Egg room, Plant and Machinery, Labour

Quarters and Water Tank

The data collected from sample SSF were compiled and presented in Table 3.2.

TABLE 3.2

AVERAGE FIXED CAPITAL INVESTMENT (SSF)

Year Shed & Equipments

Cost (`)

Miscellaneous

Cost (`) Total (`)

2008-09 2,34,000 25,100 2,59,100

2009-10 2,79,200 42,000 3,21,200

2010-11 2,97,800 43,500 3,41,300

2011-12 3,06,600 47,500 3,54,100

Mean 2,79,400 39,525 3,18,925

SD 32,350.17 9,892.88 42,119.38

CV (%) 11.58 25.03 13.21

AAGR (%) 9.64 26.70 11.33

LAGR (%) 8.46 17.38 9.57

CAGR (%) 9.15 21.52 10.49

Source : Compiled from the records of poultry farms

Miscellaneous cost includes -Egg room, Plant & Machinery, Labour quarters and Water tank.

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Table 3.2 shows that the average fixed capital investment per 1000 birds

for shed & equipments in 2008-09 was ` 2,34,000 and it has increased to

` 3,06,600 in 2011-12. In the case of miscellaneous cost, the average fixed

capital investment in 2008-09 was ` 25,100 and it has increased to ` 47,500 in

2011-12. The average fixed capital investment in total during 2008-09 was

` 2,59,100 and it has increased to ` 3,54,100 in 2011-12. Hence there is

significant increase in average fixed capital investment for both shed &

equipments and miscellaneous cost.

The analysis shows that, the average fixed capital investment for shed &

equipments and miscellaneous costs were ` 2,79,400 and ` 39,525 respectively.

In total it was ` 3,18,925. More variation in average fixed capital investment is

observed for miscellaneous cost (25.03%) than in shed & equipments (11.58%)

over the study period. The coefficient of variation in total was 13.21%.

Further the growth rate analysis shows that, the AAGR of average fixed

capital investment for shed and equipments was 9.64% while it was 26.70%

for miscellaneous cost. In respect of LAGR, it was 8.46% and 17.38% for shed

and equipments cost and miscellaneous cost respectively. The CAGR of shed

and equipments cost and miscellaneous cost were 9.15% and 21.52%

respectively. It indicates that overall growth rate of average fixed capital

investment was 10.49%.

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2. Average Variable Cost per 1000 Birds

Variable cost refers to expenses incurred during the period from 0-72

weeks, and it includes cost of chicks, feed cost, mortality adjusted cost,

electricity, vaccination and medicine, labour charges and other overhead

expenses including selling and distribution expenses of eggs. Data collected

from various sample farms of SSF towards variable costs are classified,

compiled and shown in Table 3.3.

TABLE 3.3

AVERAGE VARIABLE COST (SSF)

Year CC

(`)

FC

(`)

MAC

(`)

E

(`)

V&M

(`)

LC

(`)

OE

(`)

Total

(`)

2008-09 19,100 5,27,000 3,900 5,050 17,500 11,160 8,320 5,92,030

2009-10 19,200 6,20,000 4,000 5,250 19,900 12,330 10,200 6,90,880

2010-11 21,000 6,62,000 4,050 5,360 20,700 12,690 10,420 7,36,220

2011-12 23,000 6,75,000 4,100 5,490 22,450 13,140 11,250 7,54,430

Mean 20,575 6,21,000 4,013 5,288 20,138 12,330 10,048 6,93,390

SD 1,837.34 66,917.86 85.39 186.26 2055.63 847.47 1237.24 72,664.62

CV (%) 8.93 10.78 2.13 3.52 10.21 6.87 12.31 10.48

AAGR (%) 6.47 8.79 1.68 2.83 8.73 5.65 10.91 8.58

LAGR (%) 6.56 7.83 1.62 2.70 7.77 5.11 8.97 7.68

CAGR (%) 6.68 8.42 1.64 2.75 8.18 5.32 9.71 8.23


CC-Chick Cost; FC-Feed Cost; MAC-Mortality Adjusted Cost; E-Electricity;

V & M-Vaccination and Medicine; LC-Labour Charges; OE-Other Overhead Expenses.

From Table 3.3 it is clear that the average chick cost per 1000 chicks

was `19,100 in 2008-09 and it has increased to `23,000 in 2011-12. Feed cost

was `52,7000 in 2008-09 and it has increased to `67,5000 in 2011-12.

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The overall average mortality adjusted cost per 1000 birds in 2008-09

was `3,900 and it has increased to `4,100 in 2011-12. Table 3.3 also shows that

the overall expenses for electricity was `5,050 in 2008-09 per 1000 birds and

the same has increased to `5,490 in 2011-12. The costs of vaccination &

medicine and labour charges in 2008-09 were `17,500 and `11,160 respectively

and the same had increased to `22,450 and `13,140 respectively in 2011-12.

There are some other overhead expenses like selling and distribution

expenses for marketing of eggs to be spent by the farms. It can be noticed that

in 2008-09 it was `8,320 for 1000 birds on an average and it has increased to

`11,250 in the year 2011-12. The total variable cost in 2008-09 was `5,92,030

which had increased to `7,54,430 in 2011-12.

Hence there was a significant increase in variable cost during the period

from 2008-09 to 2011-12.

Further it can be observed that the average cost for the period from

2008-09 to 2011-12 in respect of chick cost, feed cost, mortality adjusted cost,

electricity, vaccine and medicine, labour charges and overhead expenses

were `20,575, `6,21,000, `4,013, `5,288, `20,138, `12,330, and `10,048

respectively. The coefficient of variation for chick cost is 8.93%, feed cost is

10.78%, mortality adjusted cost is 2.13%, electricity is 3.52%, vaccine and

labour charges are 10.21% and 6.87% respectively and for overhead expenses

it is 12.31% during the study period.

Hence more variation in variable cost is observed for overhead expenses

than for other components.

The AAGR of overhead expenses is higher (10.91%) which is followed

by feed cost (8.79%) and is lower for mortality adjusted cost (1.68%) and the

overall AAGR is 8.5%. The LAGR of overhead expenses is 8.97% followed

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by feed cost (7.83%) and is lower for mortality adjusted cost (1.62%) and

overall LAGR is 7.68%. The CAGR of overhead expenses higher (9.71%) and

is followed by feed cost (8.42%) and it is lower for mortality adjusted cost

(1.64%). The overall growth rate of average variable cost was 8.25%.

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3. Average Total Cost of Production per 1000 Birds

Cost of production is calculated as follows :

Cost of Production = Depreciated Value of Fixed Cost +Variable Cost +

Maintenance Cost of Fixed Assets and Interest On

Capital.

Overall cost of production for SSF and statistical analysis for the period

are presented in the Table 3.4.

TABLE 3.4

AVERAGE TOTAL COST (SSF)

Year

Depreciated

value of

Fixed Cost

(`)

Variable

Cost

(`)

Maintenance

Cost of

fixed assets

(`)

Interest on

Capital

(`)

Total

(`)

2008-09 25,910 5,92,030 1,835 26,852 6,45,827

2009-10 32,120 6,90,880 2,569 32,508 7,58,077

2010-11 34,130 7,36,220 2,730 34,629 8,07,709

2011-12 35,410 7,54,430 2,832 35,847 8,28,519

Mean 31,893 6,93,390 2,492 32,459 7,60,033

SD 4,211.94 72,664.62 450.86 3,984.48 81,670.41

CV (%) 13.21 10.48 18.10 12.28 10.75

AAGR (%) 11.33 8.58 16.67 10.37 8.83

LAGR (%) 9.57 7.68 12.65 8.97 7.86

CAGR (%) 10.49 8.23 14.60 9.75 8.45


It can be seen from the above table that on an average the depreciated

value of fixed cost was ` 25,910 in 2008-09 and it has increased to ` 35,410 in

2011-12. The variable cost was ` 5,92,030 in 2008-09 and it has increased to

` 7,54,430 in 2011-12. The maintenance cost of fixed assets in 2008-09 was

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` 1,835 and it has increased to ` 2,832 in 2011-12.The interest on capital was

` 26,852 in 2008-09 and it has increased to ` 35,847 in 2011-12. The overall

cost for the year was ` 6,45,827 and it has increased to ` 8,28,519 in 2011-12.

It can be concluded that there is significant increase in overall cost of

production for 1000 birds in SSF during the study period.

Further statistical analysis shows that the mean total cost from 2008-09

to 2011-12 in respect of depreciated value of fixed cost, variable cost,

maintenance cost of fixed assets and interest on capital were ` 31,893,

` 6,93,390, ` 2,492 and ` 32,459 respectively. The coefficient of variation in

respect of depreciated value of fixed cost, variable cost, maintenance cost of

fixed assets and interest on capital are 13.21%, 10.48%, 18.10% and 12.28%

respectively. The total mean cost for the study period is ` 7,60,033, the standard

division is 81,670.41 and coefficient of variation is 10.75%.

Hence more variation in total cost is observed for maintenance cost of

fixed assets than in any other component.

The AAGR of maintenance cost of fixed assets is more (16.67%) and is

less for variable cost (8.58%). The LAGR of maintenance cost of fixed assests

is more (12.65%) and it is less for variable cost (7.68%). The CAGR of

maintenance cost of fixed assests is more (14.60%) and is less for variable cost

(8.23%). The overall growth rate for the period was 8.45%.

The increase in growth rate is observed for the maintenance cost of fixed

asset than in any other cost component of total cost of production.

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ii) PRODUCTION COST OF MEDIUM SCALE FARMING (MSF)

(10001-50,000 BIRDS)

(Both with own feed and company feed - adopting multiple method of rearing)

In Medium Scale Farming (MSF) the farm owners may prefer to feed

the birds either with the feed manufactured by themselves (own feed) or with

the feed supplied by the manufacturing companies (company feed). As the

method of rearing birds in MSF are multiple, the investment in fixed assets are

in the nature of Brooding, Growing, Laying operations of the birds.

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1. Average Fixed Capital Investment Per 1000 Birds

In order to compare the average fixed capital investment for 1000 birds

in the sample MSF with own feed and company feed, a total of four variables

viz., Brooding shed and equipments, Grower shed and equipments, Layer shed

and equipments, Miscellaneous expenses of Egg room, Plant and Machinery,

Labour quarters and Water tanks have been analysed. Data collected from

various sample farms of MSF towards fixed capital investment were compiled

and presented in table 3.7.

TABLE 3.5

AVERAGE FIXED CAPITAL INVESTMENT (MSF)

Year

BSE

(`)

GSE

(`)

LSE

(`)

Miscellaneous

Cost

(`)

Total

(`)

own feed &

company

feed

own feed &

company feed

own feed &

company

feed

own feed company

feed own feed

company

feed

2008-09 32,500 45,000 2,15,000 51,100 31,300 3,42,600 3,23,800

2009-10 34,250 54,750 2,60,000 85,900 63,000 4,34,900 4,12,000

2010-11 36,250 58,000 2,78,000 95,000 67,000 4,67,250 4,39,250

2011-12 38,250 61,000 2,84,000 99,100 68,200 4,82,350 4,51,450

Mean 35,313 54,688 2,59,250 82,775 57,375 4,31,775 4,06,625

SD 2,486.42 6,944.35 31,212.98 21,825.27 17524.91 62,658.47 57,626.79

CV(%) 7.04 12.70 12.04 26.37 30.54 14.51 14.17

AAGR(%) 5.58 10.93 10.00 27.67 36.47 12.54 12.21

LAGR(%) 5.45 9.37 8.68 18.50 19.99 10.46 10.09

CAGR (%) 5.61 10.19 9.44 23.22 27.1 11.61 11.19


BSE-Brooding Shed and Equipments; GSE-Grower Shed and Equipments; LSE-Layer Shed

and Equipments; Miscellaneous Cost Includes-Egg Room, Plant & Machinery, Labour

Quarters and Water tank.

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Table 3.5 reveals average fixed capital investment of the sample farms of

MSF with own feed and company feed in respect of average fixed capital

investment for brooding shed and equipments, grower shed and equipments,

layer shed and equipments. It was ` 32,500, ` 45000 and ` 2,15,000 respectively

in the year 2008-09. But the same has increased to ` 38,250,

` 61,000 and ` 2,84,000 in the year 2011-12. But in respect of miscellaneous

cost it was higher (` 51,100) in own feed when compared to company feed

(` 31,000) in 2008-09. The reason for high cost is that in own feed

farms, investment has to be made for the installation of feed plant and

machinery. The same has increased to ` 99,100 and ` 68,200 respectively in

2011-12.

On an average the total fixed capital investment in 2008-09 for own feed

farms was higher (` 3,42,600) and it was lower for company feed farms

(` 3,23,800). The same has increased to ` 4,82,350 for own feed farms and

` 4,51,450 for company feed farms in 2011-12.

The coefficient of variation for farms with own feed was 14.51% and it

was 14.17% for company feed. It indicates that there is no much variation

between own feed and company feed.

The AAGR of average fixed capital investment for own feed farms was

12.54% and for company feed it was 12.21%. The LAGR of average fixed

capital investment for own feed farms was 10.46% and for company feed farms

it was 10.09%. The CAGR of average fixed capital investment for own feed

farms was 11.61% and for company feed farms it was 11.19%. From the above

analysis it is concluded that there is no much difference in the growth rate of

the average fixed capital investment of MSFs with own feed and company

feed.

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Further from the Table 3.5 it can be observed that higher rate of variation

is found for miscellaneous expenses in the case of farms with company feed

than in farms with own feed.

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2. Average Variable Cost per 1000 Birds

With an aim to compare the variable cost of MSF with own feed and MSF with company feed, seven variables viz., chick

cost, feed cost, mortality adjusted cost, electricity, vaccination and medicine, labour charges and other overhead expenses

including selling and distribution expenses have been analysed and shown in Table 3.6.

TABLE 3.6

AVERAGE VARIABLE COST (MSF)

Year

CC

(`)

FC

(`)

MA

(`)

E

(`)

V&M

(`)

LC

(`)

OE

(`)

Total

(`)

own feed &

company

feed

own feed company

feed

own feed &

company

feed

own feed &

company

feed

own feed &

company

feed

own feed &

company

feed

own feed &

company

feed

own feed company

feed

2008-09 19,100 4,80,000 5,27,000 3,900 4,875 16,800 11,900 10,900 5,47,475 5,94,475

2009-10 1,92,00 5,58,000 6,20,000 4,000 5,160 19,250 13,100 11,850 6,30,560 6,92,560

2010-11 21,000 6,10,000 6,62,000 4,050 5,200 20,100 13,800 12,200 6,86,350 7,38,350

2011-12 23,000 6,27,000 6,75,000 4,100 5,260 21,800 14,100 12,800 7,08,060 7,56,060

Mean 20,575 568,750 621,000 4,013 5,124 19,488 13,225 11,938 6,43,111 6,95,361

SD 1,837.34 66,047.33 66,917.86 85.39 170.85 2,081.82 977.67 795.17 71,628.10 72,383.82

CV (%) 8.93 11.61 10.78 2.13 3.33 10.68 7.39 6.66 11.14 10.41

AAGR (%) 6.47 9.45 8.79 1.68 2.59 9.15 5.87 5.53 9.06 8.50

LAGR (%) 6.56 8.67 7.83 1.62 2.33 8.13 5.52 5.07 8.36 7.63

CAGR (%) 6.68 9.31 8.42 1.64 2.39 8.6 5.77 5.24 8.94 8.17 Source : Compiled from the records of poultry farms

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Table 3.6 reveals that there is no significant difference is found in

average variable cost of farms with own feed and farms with company feed in

respect of chick cost, mortality adjusted cost, electricity, vaccination and

medicine, labour charges, and other overhead expenses. It was same for both

type of farms from 2008-09 to 2011-12 but the same has increased year after

the year till 2011-12.

There is a significant difference in average variable cost of farms in

respect of feed cost for farms with own feed and company feed. It was

` 4,80,000 in 2008-09 for own feed farms but it was ` 5,27,000 for company

feed farms. The same has increased in 2011-12 to ` 6,27,000 for own feed

farms and ` 6,75,000 for company feed farms.

On an average the total variable cost for own feed farms in 2008-09 was

` 5,47,475 for 1000 birds but it was ` 5,94,475 for company feed farms. The

same has increased in 2011-12 to ` 7,08,060 for own feed farms and to

` 6,95,361 for company feed farms. The coefficient of variation is 11.14 for

own feed and it is 10.41 for company feed farms.

The AAGR of variable cost of own feed farms was 9.06% and that of

company feed farms was 8.50%. The LAGR of own feed farms was 8.36%

and that of company feed farms it was 7.63% and CAGR of own feed farms

was 8.94% and that of company feed farms was 8.17%.

From the analysis it is observed that growth rate in feed cost was found

to be of higher for own feed farms than in farms with company feed.

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3. Average Total Cost of Production Per 1000 Birds

It is the total of fixed cost and variable cost. It includes the depreciated value of fixed cost, variable cost, maintenance cost

of fixed assets and interest on capital.

TABLE 3.7

AVERAGE TOTAL COST (MSF)

Year

Depreciated value of

Fixed Cost

(`)

Variable Cost

(`)

Maintenance Cost

of fixed assets

(`)

Interest on Capital

(`)

Total

(`)

own

feed

company

feed own feed

company

feed

own

feed

company

feed

own

feed

company

feed own feed

company

feed

2008-09 34,260 32,380 5,47,475 5,94,475 4,111 3,886 32,039 31,381 6,18,885 6,62,122

2009-10 43,490 41,200 6,30,560 6,92,560 5,219 4,944 39,599 38,864 7,18,868 7,77,568

2010-11 46,725 43,925 6,86,350 7,38,350 5,607 5,271 42,718 41,486 7,81,400 8,29,032

2011-12 48,235 45,145 7,08,060 7,56,060 5,778 5,417 41,153 42,662 8,03,236 8,49,284

Mean 43,178 40,663 6,43,111 6,95,361 5,179 4,880 38,877 38,598 7,30,597 7,79,502

SD 6265.85 5762.68 71,628.10 72,383.82 749.27 691.23 4733.32 5066.64 82,612.57 83,874.02

CV (%) 14.51 14.17 11.14 10.41 14.47 14.17 12.18 13.13 11.31 10.76

AAGR (%) 12.54 12.21 9.06 8.50 12.48 12.20 9.27 11.14 9.22 8.83

LAGR (%) 10.46 10.09 8.36 7.63 10.41 10.08 7.84 9.45 8.43 7.86

CAGR (%) 11.61 11.19 8.94 8.17 11.55 11.19 8.62 10.37 9.04 8.45

105


106

Table 3.7 reveals that the total cost of production in company feed farms

was higher than in farms with own feed. This difference was found throughout

the study period from 2008-09 to 2011-12.

From the above table the average total cost for own feed farms was

` 7,30,597 and for company feed farms it was ` 7,79,502. The coefficient of

variation for the own feed farms was 11.31% and it was 10.76% for company

feed. From the analysis it was observed that the variation in the total cost was

found more for own feed farms than in company feed farms.

The increase in total cost for own feed farms was (AAGR) 9.22% while

it was 8.83% for company feed farms. The LAGR for own feed farms was

8.36% and it was 7.86% for company feed farms and CAGR for own feed

farms is 9.04% and for company feed farms it was 8.45%. From the above

analysis it is found that the overall growth rate is more for own feed farms than

in company feed farms.

Hence from the foregoing analysis it is clear that on an average total cost

of production was comparatively low for own feed farms than for farms with

company feed.

107

iii) PRODUCTION COST OF LARGE SCALE FARMING (LSF)

(Above 50,001 BIRDS)

(Both with Own Feed & Company Feed adopting Multiple method of rearing)

1. Average Fixed Capital Investment Per 1000 Birds

TABLE 3.8

AVERAGE FIXED CAPITAL INVESTMENT (LSF)

Year

BSE

(`)

GSE

(`)

LSE

(`)

Miscellaneous Cost

(`)

Total

(`)

own feed

&

company

feed

own feed

&

company

feed

own feed

&

company

feed

own feed company

feed own feed

company

feed

2008-09 32,500 45,000 2,15,000 48,000 30,300 3,40,500 3,22,800

2009-10 34,250 54,750 2,60,000 85,000 62,000 4,34,000 4,11,000

2010-11 36,250 58,000 2,78,000 94,000 65,000 4,66,250 4,37,250

2011-12 38,250 61,000 2,84,000 98,000 67,500 4,81,250 4,50,750

Mean 35,313 54,688 2,59,250 81,250 56,200 4,30,500 4,05,450

SD 2,486.42 6,944.35 31,212.98 22,823.60 17,412.45 63,155.56 57,518.56

CV (%) 7.04 12.70 12.04 28.09 30.98 14.67 14.19

AAGR (%) 5.58 10.93 10.00 30.64 37.77 12.70 12.27

LAGR (%) 5.45 9.37 8.68 19.57 20.39 10.56 10.11

CAGR (%) 5.61 10.19 9.44 25.13 27.76 11.73 11.22


From Table 3.8 it can be observed that there was no difference between

own feed farms and company feed farms in respect of fixed capital investment

towards brooding shed, grower shed and layer shed. The difference is found

only in miscellaneous expenses. It was ` 48,000 in 2008-09 for own feed farms

and ` 30,300 for company feed farms. But it has increased in 2011-12 to `

98,000 and ` 67,500 respectively. The total fixed capital investment in 2008-

09 was ` 3,40,500 and ` 3,22,800 for own feed farms and company feed farms

108

respectively and it has increased to ` 4,81,250 and ` 4,50,750 in

2011-12.

From the above table it is evident that the average fixed capital

investment for the study period for own feed farms was ` 4,30,500 and for

company feed farms it was ` 4,05,450. The coefficient of variation for own

feed farms was 14.67% and for company feed farms it was 14.19%. More

variation is found in the own feed farms. The AAGR for own feed farms was

12.70% and for company feed farms it was 12.27%. It indicates that increase

in growth rate is found more for own feed farms than in company feed farms.

The CAGR for own feed farms is 11.73% and for company feed farms it is

11.22%. From the above analysis it is observed that there is a significant

variation in average fixed capital investment between own feed farms and

company feed farms.

109

2. Average Variable Cost Per 1000 Birds

TABLE 3.9

AVERAGE VARIABLE COST (LSF)

Year

CC (`) FC (`) MA (`) E (`) V & M (`) LC (`) OE (`) Total (`)

own feed &

company

feed

own feed company

feed

own feed &

company

feed

own feed &

company

feed

own feed &

company

feed

own feed &

company

feed

own feed &

company

feed

own feed company

feed

2008-09 19,100 4,80,000 5,27,000 3,900 4,800 16,500 12,400 10,400 5,47,100 5,94,100

2009-10 19,200 5,58,000 6,20,000 4,000 5,100 19,100 13,700 11,700 6,30,800 6,92,800

2010-11 21,000 6,10,000 6,62,000 4,050 5,130 19,900 14,100 11,900 6,80,080 7,38,080

2011-12 23,000 6,27,000 6,75,000 4,100 5,200 21,500 14,600 12,500 7,07,900 7,55,900

Mean 20,575 568,750 6,21,000 4,013 5,058 19,250 13,700 11,625 6,41,470 6,95,220

SD 1837.34 66047.33 66,917.86 85.39 176.71 2087.26 941.63 884.59 7,0529.48 72,457.24

CV (%) 8.93 11.61 10.78 2.13 3.49 10.84 6.87 7.61 10.99 10.42

AAGR (%) 6.47 9.45 8.79 1.68 2.73 9.33 5.65 6.42 9.07 8.52

LAGR (%) 6.56 8.67 7.83 1.62 2.43 8.21 5.11 5.59 8.29 7.63

CAGR% 6.68 9.31 8.42 1.64 2.49 8.71 5.32 5.85 8.85 8.18


CC-Chick Cost; FC-Feed Cost; MA-Mortality Adjusted; E-Electricity; VM-Vaccination and Medicine; LC-Labour Charges; OE-Other Expenses

110

From the above table it is inferred that the variable cost incurred for the

period 2008-09 to 2011-12 for own feed farms and company feed farms is

same for all the elements of cost except for feed cost. The feed cost of own

feed farms and company feed farms was ` 4,80,000 and ` 5,27,000 respectively

2008-09 and the same has increased to ` 6,27,000 and ` 6,75,000 respectively

in 2011-12.

The average variable cost for the study period was ` 6,41,470 for own

feed farms and ` 6,95,220 for company feed farms. The coefficient of variation

is 10.99 for own feed farms and for company feed farms it is 10.42%. From

the above it can be concluded that there is a significant variation towards feed

cost between own feed farms and company feed farms.

From the above table it can also be observed that the AAGR for own

feed farms to be 9.07% and that of company feed farms to be 8.52%. The

LAGR for own feed farms is 8.29% and for company feed farms it is 7.63%.

The CAGR for own feed farms is 8.85% and for company feed farms it is

8.18%. It indicates that variable cost grew at 8.85% for own feed farms and

8.18% for company feed farms.

111

3. Average Total Cost of Production Per1000 Birds

TABLE 3.10

AVERAGE TOTAL COST (LSF)

Year

Depreciated value of

Fixed Cost

(`)

Variable Cost

(`)

Maintenance Cost of

fixed assets

(`)

Interest on Capital

(`)

Total

(`)

own feed company

feed own feed

company

feed own feed

company

feed

own

feed

company

feed own feed

company

feed

2008-09 34,050 32,280 5,47,100 5,94,100 3,405 3,228 31,892 31,311 6,16,447 6,60,919

2009-10 43,400 41,100 6,30,800 6,92,800 4,340 4,110 39,816 38,794 7,18,356 7,76,804

2010-11 46,625 43,725 6,80,080 7,38,080 4,620 4,372 42,647 41,345 7,73,972 8,27,522

2011-12 48,125 45,075 7,07,900 7,55,900 4,813 4,508 43,865 42,612 8,04,703 8,48,095

Mean 43,050 40,545 6,41,470 6,95,220 4,295 4,055 39,555 38,516 7,28,370 7,78,335

SD 6315.56 5751.86 70,529.48 72,457.24 623.99 575.22 5382.88 5058.65 82,731.11 83,814.64

CV (%) 14.67 14.19 10.99 10.42 14.53 14.19 13.61 13.13 11.36 10.77

AAGR (%) 12.70 12.27 9.07 8.52 12.70 12.27 11.60 11.18 9.41 8.85

LAGR (%) 10.56 10.11 8.29 7.63 10.49 10.12 9.80 9.46 8.52 7.87

CAGR (%) 11.73 11.22 8.85 8.18 11.64 11.22 10.79 10.39 9.13 8.45


112

The cost components included for total cost is same as in MSF. The

total cost incurred in 2008-09 for own feed was ` 6,16,447 and it was

` 6,60,919 for company feed farms and it has increased to ` 8,04,703 and

` 8,48,095 respectively in 2011 - 12. On an average the total cost incurred for

company feed farms is higher than that of own feed farms.

The average total cost for own feed farms was ` 7,28,370 and for

company feed farms it was ` 7,78,335. The coefficient of variation for own

feed farms was 11.36% and for company feed farms it was 10.77%. From the

above it is observed that more variation is found in own feed farms than in

company feed farms.

The AAGR of total cost for own feed farms was 9.41% while it was

8.85% for company feed farms. The LAGR for own feed farms was 8.52% and

for company feed farms it was 7.87%. The CAGR for own feed farms was

9.13% and for company feed farms it was 8.45%. From the analysis it is

observed that average variable cost grew at 9.13% for own feed farms and at

8.45% for company feed farms.

113

II. ANALYSIS OF FINANCIAL STRUCTURE AND PERFORMANCE

OF POULTRY FARMS

Finance is the most important functional area of the poultry farms. The

financial requirements of poultry farms may be of two types namely fixed

capital and working capital. Fixed capital is required for meeting the cost of

constructions of poultry farms, purchase of poultry equipments and fixed

portion of working capital. Working capital is required to carry out farming

operations such as purchase of day-old-chicks, poultry feeds, medicines, litter

materials, payment of labour charges, electricity and fuel charges, selling and

distribution expenses. The financial requirements of a poultry unit mainly

depend on the number of birds maintained.

This section of the chapter analyses the financial structure and financial

position of the sample farms taken for the study.

114

1) Financial Structure

The financial structure of the poultry farms in both the divisions

(Namakkal and Tiruchengode) of Namakkal District consists of both own funds

and borrowed funds. Own funds means capital contribution by proprietor

himself /herself. Borrowed funds means loans and advances from banks and

credit from financial institutions, friends and relatives. The Table 3.11 presents

the financial structure of sample units in both the divisions.

TABLE 3.11

FINANCIAL STRUCTURE OF SAMPLE FARMS

S.No.

Financial

Structure

Division Total

Namakkal Tiruchengode

No. % No. % No. %

1. Only own funds 103 48.6 22 33.3 125 45.0

2. Both own and

Borrowed funds 109 51.4 44 66.7 153 55.0

Total 212 100 88 100 278 100

Source: Primary Data

Out of the 278 sample farms taken for the study majority (55%) of the

farms employ both own funds and borrowed funds in their financial structure.

In Namakkal division 51.4% of the sample farms have mobilized capital from

both own and borrowed sources. It is comparatively more in Tiruchengode

division of Namakkal District i.e. 66.7% of sample farms have this financial

structure. Own funds alone is employed in 45% of the sample farms. In

Namakkal division the percentage share of own funds is higher at 48.6% but it

is lower 33.3% in Tiruchengode division.

115

(a) Sources of borrowed funds

The sources of borrowed funds of the sample farms consists of banks,

financial institutions, friends and relatives. The average proportion of sources

of borrowed funds among the sample farms of both the divisions of Namakkal

District are furnished in the Table 3.12.

TABLE 3.12

SOURCES OF BORROWED FUNDS OF THE SAMPLE FARMS

S.No.

Sources of

borrowed

funds

Division Total


No. % No. % No. %

1. Banks 68 62.3 27 61.4 95 62.1

2. Financial

Institutions 16 14.7 3 6.8 19 12.4

3. Friends &

Relatives 25 23.0 14 31.8 39 25.5

Total 109 100 44 100 153 100


Table 3.19 reveals that loans and advances from banks constitute a

major part of the borrowed funds in both the divisions of the Namakkal

District. The percentage share is 62.3 and 61.4 respectively. The percentage

share of credit from friends and relatives and financial institutions is found to

be very negligible.

116

(b) Ability to meet the working capital requirements in time

In poultry industry, working capital is the life blood and controlling

nerve centre of business. The need for working capital arises out of the lack of

immediate realisation of cash against products sold. Technically, this is

referred to as the operating or cash-cycle. The magnitude of working capital

required will not be constant, but will flucture. To carryout business, certain

minimum level of working capital is necessary on a continuous and

uninterrupted basis. This requirement will have to be met permanently as with

other fixed assets and is referred to as permanent or fixed working capital. Any

amount over and above the permanent level of working capital is temporary,

fluctuating or variable working capital. This portion of the required working

capital is needed to meet fluctuation in demand consequent upon changes in

production and sales as a result of seasonal changes. Therefore data regarding

ability to meet the working capital requirements in time of sample farms are

presented in the Table 3.13.

TABLE 3.13

ABILITY OF THE SAMPLE FARMS TO MEET WORKING CAPITAL

REQUIREMENTS IN TIME

S.No. Whether able

or Not

Division Total


No. % No. % No. %

1 Yes 212 100 66 100 278 100

2. No 0 0 0 0 0 0

Total 212 100 66 100 278 100


Out of the 278 sample farms, it is found that all (100%) the sample

farms in both the divisions of Namakkal District are able to meet working

capital requirement in time.

117

(c) Promptness in the repayments of Loans and Borrowings

The promptness of the poultry farms in repayment of loans and

borrowings is one of the indicators of solvency of the farms. Table 3.14 gives

the nature of repayment of loans and borrowings by both the divisions of

Namakkal District.

TABLE 3.14

PROMPTNESS IN REPAYMENT OF LOANS AND BORROWINGS

S.No.

Nature of

Repayment

Division Total


No. % No. % No. %

1. Prompt 98 89.9 41 93.2 139 90.8

2. Not Prompt 11 10.1 3 6.8 14 9.2

Total 109 100 44 100 153 100


Out of 109 sample farms which availed financial assistance from various

sources in Namakkal division, only 98 farms (89.9%) could repay the loans

promptly. In Tiruchengode division out of 44 sample farms which availed

financial assistance, majority of 41 (93.2%) sample farms have promptly repaid

the loans and borrowings. The percentage share of sample farms not prompt in

repayment of loans and borrowings is very negligible.

118

(d) Reasons for default in repayment of Loans and Borrowings

The insufficient return from investment, shortage of working capital,

diversion of funds and purposeful neglect are found to be the reasons for the

default in repayment of loans and borrowings. The rankings of the reasons for

the default in the repayment of loans and borrowings by the sample farms are

furnished in Table 3.15.

TABLE 3.15

RANKING OF THE REASONS FOR DEFAULT IN REPAYMENT OF

LOANS AND BORROWINGS

Reasons

Ranks Total

1 2 3 4 5

No. % No. % No. % No. % No. % No.

Shortage of

fund 4 1.40 2 0.70 - - 1 0.40 7

Insufficient

return on

investment

1 0.40 2 0.70 2 0.70 1 0.40 - - 6

Diversion of

fund 1 0.40 2 0.70 4 1.40 - - 7

Purposeful

neglect - - - - - - 5 1.80 - - 5


Table 3.15 shows that regarding the reason “Shortage of funds” 1.40%

of the respondents assigned rank one, 0.70% of them assigned rank two

and 0.40% of the respondents assigned rank five. Regarding the reason

“Insufficient return on investment” 0.40% of the respondents assigned rank one

and four, 0.70% of them assigned rank two and three. Regarding the reason

“Diversion of funds” 0.40% of the respondents assigned rank one,

0.70% of them assigned rank two and 1.40% of the respondents assigned rank

three. Regarding the reason “Purposeful neglect” 1.80 % of them assigned rank

four.

119

To identify the prominent reason for default in repayment of loans the

Friedman's test analysis was used and the results are given in table below.

TABLE 3.15a

FRIEDMAN'S TEST

Factors Mean SD Mean Rank

Shortage of fund 0.05 0.36 2.48

Insufficient return on investment 0.05 0.39 2.50

Diversion of fund 0.06 0.40 2.51

Purposeful neglect 0.07 0.53 2.52

It could be noted from the above table that among the four factors

“Purposeful neglect” was ranked first. It is followed by the “Diversion of

fund”. “Insufficient return on investment” was ranked third.

120

2) Financial Position

(a) Average Income from Poultry Farming per 1000 Birds (SSF)

The income of poultry farms consists of the income from sale of Eggs,

sale of Cull Birds, Manure and Gunny Bags. The sale of eggs is performed

through various channel of distribution available. Cull Birds are those birds

which cannot lay eggs further and they are sold out for meat purposes. The

farms have to sell them to the consumers through wholesalers or retailers or

agents. Similarly the Manure is sold to the customers. The Manure is used as

the best fertilizer in horticulture sector and in agriculture fields. The Gunny

Bags are sold or returned to the suppliers.

The data collected from the sample poultry farms of SSF were compiled

and shown in Table 3.16.

TABLE 3.16

AVERAGE INCOME FROM POULTRY FARMING (SSF)

Year Eggs

(`)

Cull birds

(`)

Manure

(`)

Gunny

bags

(`)

Total

(`)

2008-09 5,96,163 38,100 6,400 9,320 6,49,483

2009-10 7,36,740 47,680 6,750 9,600 8,00,770

2010-11 7,77,650 51,100 6,800 9,800 8,45,350

2011-12 8,01,600 48,980 7,050 10,250 8,67,880

Mean 7,28,038 46,465 6,750 9,743 7,90,871

SD 91,904.77 5,752.04 267.71 391.44 9,8297.01

CV (%) 12.62 12.38 3.97 4.02 12.43

AAGR (%) 10.74 9.39 3.30 3.23 10.51

LAGR (%) 9.03 7.76 2.96 3.07 8.85

CAGR (%) 9.88 8.58 3.02 3.11 9.68


121

It is evident from the above table that income from sale of eggs in

2008-09 was ` 5,96,163 and it has increased to ` 8,01,600 in 2011-12. The

income from sale of cull birds was ` 38,100 in 2008-09 and it has increased to `

48,980 in 2011-12. The income from sale of manure was ` 6,400 in 2008-09

and it has increased to ` 7,050 in 2011-12. The income from sale of gunny bags

was ` 9,320 in 2008-09 and it has increased to ` 10,250 in 2011-12. The total

income from sale of various sources of poultry farms was` 6,49,483 in 2008-09

and same has increased to ` 8,67,880 in 2011-12.

It is inferred from the above analysis that there is a significant increase

in income from poultry farms during period 2008-09 to 2011-12.

The coefficient variation for sale of eggs, cull birds, manure and gunny

bags were 12.62%, 12.38%, 3.97% and 4.02% respectively and for total

income it is 12.43%. More variation is found in the case of in income from

sale of eggs.

The AAGR of income from sale of eggs is more (10.74%) followed by

sale of cull birds (9.39%) and it is less in sale of gunny bags (3.23%). The

LAGR of income from sale of eggs is more (9.03%) followed by sale of cull

birds (7.76%) and is less in sale of manure 2.96%. The CAGR of sale of eggs

is more (9.88%) followed by cull birds (8.58%) and is less in sale of manure

(3.02%). The overall growth rate of income was 9.68%.

122

b) Average Net Return per 1000 Birds (Profitability of the Poultry

Farming)

Profit is the excess of the sales revenue earned over the cost of

production incurred. Profit is measured as excess of output values over the

input cost. Profitability is a relative concept showing the ability of the farm to

make profit. The economic viability of an industry can be assessed from its

profitability. Profits are the resources for the internal financing of expansion of

a poultry farming.

Net Return (Profitability) of SSF is calculated as follows:

Net Return = Income from (Sale of Eggs + Cull Birds + Manure and Gunny

Bags) Cost of Production.

123

The net returns of sample small scale poultry farms is presented in the

Table 3.17.

TABLE 3.17

AVERAGE NET RETURN FROM POULTRY FARMING (SSF)

Year

Income from

sales

(`)

Expenses

(Cost of

production)

(`)

Net profit / Loss

(`)

2008-09 6,49,483 6,45,827 3,656

2009-10 8,00,770 7,58,077 42,693

2010-11 8,45,350 8,07,709 37,641

2011-12 8,67,880 8,28,519 39,361

Mean 7,90,870.75 7,60,033 30,837.75

SD 98,297.01 81,670.41 18,242.12

CV (%) 12.43 10.75 59.16

AAGR (%) 10.51 8.83 353.50

LAGR (%) 8.85 7.86 33.10

CAGR (%) 9.68 8.45 101.44

From the above table it is inferred that the average net profit earned in

2008-09 was ` 3,656. During this year the poultry farming business was

affected by the outbreak of bird flu. But in 2009-10 there was a tremendous

increase in profit as there was more demand for eggs internally as well as from

abroad. The Profit in 2010-11 was ` 37,641 is comparatively less than in

2009-10 and 2011-12. But in 2011-12 the profit was higher than that of the

previous year 2010-11.

The average Net Profit for the period was ` 30837.75and coefficient of

variation was 59.16%. The AAGR for average net return for the study period

124

was 353.50%, LAGR was 33.10% and CAGR was 101.44%. It indicates that

overall growth rate of Net profit for SSFs was 101.44%.

125

c) Average Income from Poultry Farm for 1000 Birds (MSF)

Table 3.18 reveals that the average income from poultry farming for

own feed farms and company feed farms. Various sources of income from

poultry farming considered are income from sale of eggs, cull birds, manure

and gunny bags.

TABLE 3.18

AVERAGE INCOME FROM POULTRY FARMING (MSF)

Year

Eggs

(`)

Cull

birds

(`)

Manure

(`)

Gunny bags

(`)

Total

(`)

own

feed

company

feed

own feed

&

company

feed

own feed

&

company

feed

own

feed

company

feed

own

feed

company

feed

2008-09 5,66,355 5,96,163 38,100 5,400 3,500 9,320 6,13,355 6,48,983

2009-10 6,99,900 7,36,740 47,680 5,700 3,850 9,600 7,57,130 7,99,720

2010-11 7,35,670 7,79,650 51,100 5,900 4,150 9,800 7,96,820 8,46,450

2011-12 7,71,000 8,01,600 48,980 6,150 4,460 10,250 8,31,110 8,66,980

Mean 6,93,231 7,28,538 46,465 5,788 3,990 9,743 7,49,604 7,90,533

SD 89,426.10 92,269.36 5752.04 317.21 410.77 391.44 95,730.54 98,474.46

CV (%) 12.90 12.66 12.38 5.48 10.30 4.02 12.77 12.46

AAGR (%) 11.16 10.74 9.39 4.43 8.42 3.23 11.00 10.50

LAGR (%) 9.37 9.05 7.76 4.23 7.97 3.07 9.24 8.86

CAGR (%) 10.24 9.91 8.58 4.34 8.35 3.11 10.10 9.70


The above table reveals that there is no difference in the income earned

by own feed farms and company feed farms from sale of cull birds and manure

for the period from 2008-09 to 2011-12. But there is a significant difference in

the income earned by the own feed farms and company feed farms for the

period from sale of eggs and gunny bags.

126

The average income from sale of eggs in company feed farms was more

(` 7,90,533) than in own feed farms (` 7,49,604). The reason for the difference

is that in the own feed poultry farms, farmers have to sell their eggs with

reduction in egg price (i,e minus 25 to 75 paise of NECC rate). But in the case

of company feed farms farmers sell their eggs to the feed traders at NECC egg

price rate.

The average income from sale of gunny bags in company feed farms

was more (` 9,743) than in own feed farms (` 3,990) for the period from

2008-09 to 2011-12. The reason behind this is that in company feed the empty

gunny bags are of good quality and is sold at higher price whereas in the case

of own feed the empty bags are of low quality and is sold at low price.

From the above table it is evident that AAGR of income from poultry

farming in own feed farms it is 11% and for company feed farms it is 10.50%.

The LAGR for own feed farms was more (9.24%) than in company feed farms

(8.86%). The CAGR for own feed farms was more (10.10%) than in company

feed farms (9.70%). From the above analysis it is observed that there was a

significant variation between company feed and own feed.

From the above analysis it is also observed that the income earned by

farmers with company feed was more than farms with own feed.

127

d) Average Net Return Per 1000 Birds (Profitability of the Poultry

Farming) (MSF)

Net Profit is the excess of sales revenue earned over the cost of

production incurred. Profitability is a relative concept showing the ability of

the farms to make profit. The economic viability of poultry farms can be

assessed from its profitability. Net return of MSFs with own feed and MSFs

with company feed are presented in the Table 3.19.

TABLE 3.19

AVERAGE NET RETURN FROM POULTRY FARMING (MSF)

Year

Income from sales

(`)

Expenses

(Cost of production)

(`)

Net profit / Loss

(`)

own feed company

feed own feed

company

feed own feed

company

feed

2008-09 6,13,355 6,48,983 6,18,885 6,62,122 -5,530 -13,139

2009-10 7,57,130 7,99,720 7,18,868 7,77,568 38,262 22,152

2010-11 7,96,820 8,46,450 7,81,400 8,29,032 15,420 17,418

2011-12 8,31,110 8,66,980 8,03,236 8,49,284 27,874 17,696

Mean 7,49,604 7,90,533 7,30,597 7,79,502 19,007 11,032

SD 95,730.54 98,474.46 82,612.57 83,874.02 18,835.34 16,259.17

CV (%) 12.77 12.46 11.31 10.76 99.10 147.39

AAGR (%) 11.00 10.50 9.22 8.83 270.99 82.94

LAGR (%) 9.24 8.86 8.43 7.86 40.71 79.56

CAGR (%) 10.10 9.70 9.04 8.45 - -

From the above table it is clear that in 2008-09 both types of farms

incurred loss. In 2009-10 the profit earned (` 38,262) is more in own feed

farms than in company feed farms (` 22,152). In 2010-11 the profit earned is

128

more in company feed farms (` 17,418) than in own feed farms (` 15,420). In

2011-12 the profit earned is higher (` 27,874) in own feed farms when

compared with farms with company feed (` 17,696).

The mean profit for the period for own feed farms is ` 19,007 and for

company feed farms it is ` 11,032. From the above analysis it is concluded that

the profit earned by own feed farms was more than farms with company feed.

The average increase in net return for own feed farms was 270.99%

where as it was 82.94% for company feed farms.

129

e) Average Income from Poultry Farm per 1000 Birds (LSF)

TABLE 3.20

AVERAGE INCOME FROM POULTRY FARMING (LSF)

Year

Eggs (`) Cull birds (`) Manure (`) Gunny bags (`) Total (`)

own

feed

company

feed

own feed &

company

feed

own feed &

company feed

own

feed

company

feed

own

feed

company

feed

2008-09 5,66,355 5,96,163 38,100 5,400 3,500 9,320 6,13,355 6,48,983

2009-10 6,99,900 7,36,740 47,680 5,700 3,850 9,600 7,57,130 7,99,720

2010-11 7,35,670 7,79,650 51,100 5,900 4,150 9,800 7,96,820 8,46,450

2011-12 7,71,000 8,01,600 48,980 6,150 4,460 10,250 8,31,110 8,66,980

Mean 6,93,231 7,28,538 46,465 5,788 3,990 9,743 7,49,604 7,90,533

SD 89,426.10 92,269.36 5752.04 317.21 410.77 391.44 95,730.54 98,474.46

CV (%) 12.90 12.66 12.38 5.48 10.30 4.02 12.77 12.46

AAGR

(%) 11.16 10.74 9.39 4.43 8.42 3.23 11.00 10.50

LAGR (%) 9.37 9.05 7.76 4.23 7.97 3.07 9.24 8.86

CAGR

(%) 10.24 9.91 8.58 4.34 8.35 3.11 10.10 9.70


126

Table 3.20 shows that the income from poultry farming in company feed

farms was more than in own feed farms. The reason for wide variation is that

the egg price received by company feed farms is higher than that of own feed

farms.

The average income for own feed farms is ` 7,49,604 and for company

feed farms it is ` 7,80, 533. The coefficient for own feed farms is 12.77% and

for company feed farms it is 12.46%.

The AAGR for own feed farms is 11% and for company feed farms it is

10.50%. The LAGR for own feed farms is 9.24% and for company feed farms

it is 8.86%. The CAGR for own feed farms is 10.10% and for company feed

farms it is 9.70%.

From above analysis it is observed that growth rate of income of own

feed farms is more than the company feed farms.

127

f) Average Net Return Per1000 Birds (Profitability of the Poultry

Farming) (LSF)

TABLE 3.21

NET RETURN FROM POULTRY FARMING (LSF)

Year

Income from sales (`)

Expenses

(Cost of production)

(`) Net profit / Loss (`)

own feed company

feed own feed

company

feed own feed

company

feed

2008-09 6,13,355 6,48,983 6,16,447 6,60,919 -3092 -11936

2009-10 7,57,130 7,99,720 7,18,356 7,76,804 38,774 22,916

2010-11 7,96,820 8,46,450 7,73,972 8,27,522 22,848 18,928

2011-12 8,31,110 8,66,980 8,04,703 8,48,095 26,407 18,885

Mean 7,49,603.75 7,90,533.25 7,28,369.50 7,78,335 21,234.25 12,198.25

SD 95,730.54 98,474.46 82,731.11 83,814.64 17,595.18 16,200.15

CV (%) 12.77 12.46 11.36 10.77 82.86 132.81

AAGR (%) 11.00 10.50 9.41 8.85 442.84 91.45

LAGR (%) 9.24 8.86 8.52 7.87 34.18 72.53

CAGR (%) 10.10 9.70 9.13 8.45 - -

From the table it is clear that in 2008-09 a loss incurred by both type of

farms-own feed and company feed farms. In 2009-10 the profit earned

(` 38,774) was more in own feed farms than in company feed farms (` 22,916).

In 2010-11 the profit earned was more in own feed farms (` 22,848) than in

company feed farms (` 18,928). In 2011-12 the profit earned was higher

(` 26,407) in own feed farms when compared with that of company feed farms

(` 18,885).

Therefore Net return from LSF is higher in own feed farms than in

company feed farms. The mean profit for the period of study of LSF was

128

` 21,234.25 for own feed farms and it was ` 12,198.25 for company feed farms.

From the above analysis it is concluded that profit earned by own feed farms is

more than the profit earned by company feed farms.

TABLE – 3.22

CONSOLIDATED NET RETURN FROM POULTRY FARMING

Year

SSF MSF LSF

company

feed own feed

company

feed own feed

company

feed

2008-09 3,656 -5,530 -13,139 -3092 -11936

2009-10 42,693 38,262 22,152 38,774 22,916

2010-11 37,641 15,420 17,418 22,848 18,928

2011-12 39,361 27,874 17,696 26,407 18,885

Mean 30,837.75 19,007 11,032 21,234.25 12,198.25

SD 18,242.12 18,835.34 16,259.17 17,595.18 16,200.15

CV (%) 59.16 99.10 147.39 82.86 132.81

AAGR (%) 353.50 270.99 82.94 442.84 91.45

LAGR (%) 33.10 40.71 79.56 34.18 72.53

From the above table it is observed that the mean net profit for SSF with

company feed farms is more followed by LSF with own feed farms which is

less for MSF with company feed farms. LAGR of SSF with company feed

farms is less and is followed by LSF with of own feed farms which is high for

MSF with company feed farms. So it can be concluded that the SSF with

company feed farms is more viable and is followed by LSF with own feed

farms.

129

III. ANALYSIS OF MARKETING PERFORMANCE OF POULTRY

FARMS

The purpose of production is consumption. Effective consumption

depends on the economical marketing process. The choice of marketing

channel for a perishable product is always more complex. The channel cannot

be too long but the product should go wider and reach quicker. An analysis on

channels of marketing selected by various farms would provide better

understanding about the marketing performance of the poultry farms. The

introduction of modern marketing in poultry industry gave emphasis on

consumer orientation and profitability of organisation as well. The significance

of marketing in poultry farming further increased in view of the fact that the

poultry products are perishable commodities and hence require a quick

disposal. In the absence of proper marketing facilities a high degree of wastage

may be the fate of the producers of poultry products. The market for poultry

items may be of internal market or export market.

Importance of Poultry Marketing

Marketing plays an important role in the economic system of a country.

It ensures full and complete flow of products continuously from the producers

to the consumers and contributes to the maintenance of high level of economic

activity. Efficient marketing of poultry products is a strong bridge between

production and consumption. It contributes to the avoidance of cyclical

fluctuation like boom and depression and in the promotion of economic

activity.

Efficient and effective marketing of poultry products is essential to

provide reasonable returns to rural producers. Marketing of poultry products

involves various marketing functions and processes taking place soon after the

bird lays egg. Effective marketing of poultry products enhances the demand

for poultry products, thereby creating employment opportunities to rural

masses. It also improves the income level and standard of living of poultry

farmers. Amino acid, fatty acid, vitamins, minerals etc are essential for the

130

growth and maintenance of physical existence of human being. These vitamins

and minerals are rich in egg and poultry meat. Poor people can obtain these

nutrients at a lesser cost. Marketing of poultry products makes available the

poultry products at the right time, right place, in right quantity and at right

price. Poultry products are marketed in the country in various forms and

convenience to suit consumer choice. The main stumbling block in the

marketing of poultry and egg is its perishability. The nutritional advisory

committee of India has recommended half an egg daily, per person, for

maintenance of normal health. To meet this recommended consumption

requires more than 99000 million eggs per year. So by marketing the poultry

products throughout the country, malnutrition can be avoided.

Marketing channel for egg marketing in Namakkal

A marketing channel is a set of independent organizations involved in

the process of making a product or service available for use or consumption.

Intermediary refers to any distribution channel member located between the

producer and the end user. Poultry industry is one of the fast growing

agriculture sector. Namakkal plays a significant role in poultry industry.

While for any agricultural product, the producer gets only 30% to 35%

of the consumer price, the egg producers in India obtain 70% -75% of the

consumer price.1

The major output of the poultry industry is egg, meat and

byproducts. The price for the poultry products at a particular place is

determined not only due to local market but also by the conditions prevalent in

the region for the state. Thus the significance of marketing in the field of

poultry industry has gained enormous potentialities and this calls for an

effective exploration of the channel of distribution in the marketing of eggs.

The marketing of eggs in Tamil Nadu is mainly concerned with the

supply from Namakkal Zone. Nearly 55 percent of eggs produced in

Namakkal Zone are marketed outside the state. The remaining portion is

consumed by the people state. The National Egg Co-ordination Committee

(NECC) in Namakkal fixes the prices of eggs.

131

Marketing Channel for Egg Marketing

Wholesaler – Retailer – Consumer

1. Producer Egg Trader

Exporter

Wholesaler – Retailer – Consumer

2. Producer Input supplier

Exporter

Consumer

3. Producer

Exporter

Role of National Egg Co-ordination Committee (NECC)

NECC is an association of poultry farmers and traders established in

1982 by Dr.B.V.Rao “Father of modern poultry in India” and a group of

farmers to enable farmers to declare their own farm -gate price for eggs. It is

an unique institution with no parallel in the world. Irrespective of size or

location the farmer that too, for his entire production at his farm-gate gets the

official notified price as decided by elected farmer representatives of NECC

every day, which is published in local leading dailies.

NECC is a charitable trust with 24 zones and 118 local committees, has

about 25000 farmers as its members who are spread out all over India. In every

production centre it is helping the layer farmers to obtain reasonable,

remunerative, viable price for eggs based on demand and supply for a

production centre and its connected consumption centers. To ensure traders do

not exploit farmers, NECC undertakes market intervention scheme as and

where necessary like extension of subsidy or directly procuring eggs for cold

storage in the domestic market. To enforce the price declared, NECC also has

its market arm, Agrocorpex India Limited (ACIL), a public limited company,

entirely owned and managed by poultry farmers. NECC has also been

instrumental, at the instance of poultry farmers, in incorporating Bharat Egg

Producer‟s Association which encourages export of shell eggs, promotion of

egg in electronic and print media and sponsors sports and related activities to

promote consumption of poultry products.

132

NECC is the only agency, well recognized by policy makers in State and

Centre as a representative body of poultry the industry to represent the interests

of poultry farmers and has been effective to get the grievances addressed and

remedial measures initiated.5

MARKETING PRACTICES OF POULTRY FARMS

The marketing practices of the poultry farms in Namakkal Division and

Tiruchengode Division of Namakkal District, have been analysed on the basis

of the following variables.

1. Sources of finding the egg price.

2. Egg selling rate.

3. Marketing channel adopted.

4. Mode of egg sales.

5. Method of disposal of poultry manure.

6. Method of disposal of cull birds.

133

(i) Sources of finding the egg price

Table 3.23 shows the sources of finding the egg price by the farmers in

Namakkal and Tiruchengode divisions.

TABLE 3.23

SOURCES OF FINDING THE EGG PRICE

S.No. Sources

Division Total


No. % No. % No. %

1

National Egg

Coordination

Committee [NECC]

108 50.9 42 63.6 150 54.0

2. News papers 104 49.1 21 31.8 125 45.0

3. Rate given by the

procurer of eggs - - 3 4.5 3 1.1

Total 212 100 66 100 278 100


The above table reveals that for majority (54%) of the poultry farmers,

the source of finding the egg rate is through National Egg Coordination

Committee (NECC). A divisionwise analysis shows that in Tiruchengode

Division more farms rely on this source (63.6%) than in Namakkal Division

(50.9%). The next source of knowing the egg rate is through News paper

accounting for 45% of the total. The percentage in Namakkal Division is more

(49.1%) than in Tiruchengode Division (31.8%). For the remaining 1.1% of

farmers of Tiruchengode Division the source of knowing the egg price is

through rate given by the procurer of eggs.

134

(ii) Egg selling rate

The following table shows rate at which the eggs are sold in both the

divisions Namakkal district. The eggs can be sold at various rates namely

NECC rate, NECC rate minus 25 to 75 paisa and NECC + Marketing expenses

(Direct Sale).

TABLE 3.24

SELLING RATE OF EGGS

S.No. Rate

Division Total


No. % No. % No. %

1. NECC rate 90 42.5 27 40.9 117 42.1

2. NECC rate minus

25 to 75 paisa 98 46.2 36 54.5 134 48.2

3.

NECC+ Marketing

expenses

(Direct Sale)

24 11.3 3 4.5 27 9.7

Total 212 100 66 100 278 100


From the above Table it is clear that the majority (48.2%) of sample

farmers sell their eggs at NECC rate minus 25 to 75 paisa to the egg traders. In

Tiruchengode Division the percentage of farmers is more (54.5%) than in

Namakkal Division (46.2%). At NECC rate, 42% of sample farms sell their

eggs to feed supplier (Input supplier), the percentage of Namakkal Division is

more (42.5%) when compared to Tiruchengode Division (40.9%). The

remaining 9.7% of sample farms sell their eggs at NECC + Marketing expenses

rate directly to the consumers. Divisionwise analysis shows that in Namakkal

Division it is 11.3% and in Tiruchengode Division it is 4.5%.

135

(iii) Marketing channel adopted

The poultry farmers of Namakkal District farmers depend on

intermediaries for the disposal of poultry products. The important marketing

channel adopted by the poultry farmers are Egg Trader and Input supplier.

Table 3.25 presents the marketing channel adopted by the sample farms in

Namakkal District.

TABLE 3.25

MARKETING CHANNEL ADOPTED

S. No. Marketing Channel No Yes Total

No. % No. % No. %

1. Direct Sale to the Consumer 236 84.9 42 15.1 278 100

2. Through Egg Trader 135 49.6 143 51.4 278 100

3. Through Feed Trader

(Input Supplier) 136 48.9 142 51.1 278 100

4. To Exporters 268 96.4 10 3.6 278 100


The Table 3.25 reveals that out of 278 sample farms selected majority

143 of sample farmers sell their eggs through Egg trader and next 142 of

sample farmers sell eggs through Feed trader (Input Supplier). 42 of them sell

directly in the market and last 10 sample farmers sell eggs to the Exporter. It is

seen that few sample farmers sell their eggs through both an Egg trader and

Feed trader.

136

(iv) Mode of egg sales

The mode of sales may be cash sales, credit sales and both. The mode

of sales adopted by the sample farms in Namakkal Division and Tiruchengode

Division of Namakkal District is shown in Table 3.26.

TABLE 3.26

THE MODE OF EGG SALES BY SAMPLE FARMS

S.No. Mode of

sales

Division Total


No. % No. % No. %

1. Cash Sales 64 30.2 14 21.2 78 28.1

2. Credit Sales 27 12.7 4 6.1 31 11.2

3. Both 121 57.1 48 72.7 169 60.8

Total 212 100 66 100 278 100


Out of 278 sample farms taken up for the study, it is observed that

majority (60.8%) of the farms sell under both the cash sales and credit sales

method. The percentage is more (72.7%) in Tiruchengode Division when

compared to Namakkal Division (57.1%).

30.2% of the sample farms in Namakkal Division adopt cash sales

method while it is 21.2% in Tiruchengode Division. In Namakkal Division

12.7% of sample farms sell eggs on credit basis while in Tiruchengode

Division 6.1% of the sample farms have credit sales.

137

(v) Method of disposal of poultry manure

Poultry manure is the byproduct obtained from the farming operation. It

is one of the best biofertilizer which can be used for the agricultural purposes.

The method of disposal of poultry manure followed by the sample farms is

shown in Table 3.27.

TABLE 3.27

METHOD OF DISPOSAL OF POULTRY MANURE BY

SAMPLE FARMS

S. No. Method of

Disposal

Division Total


No. % No. % No. %

1. Own purpose 0 - 0 - 0 -

2. Selling 208 98.1 63 95.5 271 97.5

3. Both 4 1.9 3 4.5 7 2.5

Total 212 100 66 100 278 100


Table 3.27 reveals that 97.5% of sample farms sell the poultry manure to

others. In Namakkal Division the percentage is more (98.1%) than in

Tiruchengode Division (95.5%). The remaining 2.5% of sample farms use part

of poultry manure for their own purpose and sell the rest.

138

(vi) Method of disposal of cull birds

The following table shows the method of disposal of cull birds in

Namakkal and Tiruchengode division of Namakkal District. The cull birds can

be sold either locally or sold to cull bird merchants.

TABLE 3.28

METHOD OF DISPOSAL OF CULL BIRDS BY SAMPLE FARMS

S.No. Method of

sales

Division Total


No. % No. % No. %

1. Local sales 0 - 0 - 0 -

2. Through cull

bird merchants 210 99.06 65 98.48 275 98.92

3.

Local sales and

Through cull

bird merchants

2 0.94 1 1.52 3 1.08

Total 212 100 66 100 278 100


The method of disposal of Cull birds through cull bird merchants is

found to be preferred by the poultry farms (98.92%) than in other method. In

Namakkal Division it is more (99.06%) than in Tiruchengode Division

(98.48%). The sample farms which sell both to cull bird merchants and make

local sales is very negligible.

(B) ANALYSIS OF PROBLEMS OF POULTRY FARMS

The poultry farm owners suffer from various problems with differing

dimensions. Among these problems, the common issues related to the poultry

farm owners were studied. From the primary survey conducted among the

poultry farms of Namakkal District, it was found out that the majority of

poultry farms face problems in the area of production, finance and marketing of

eggs. The farm owners reported different problems. An analysis of the

problems experienced by the farm owners in the area of production, finance

and marketing of eggs have been made in this section.

139

i) Problems in the area of production

Table 3.29 presents the number of farms, divisionwise, that face

problem in production activity.

TABLE 3.29

PROBLEMS EXPERIENCED IN PRODUCTION ACTIVITIES

Problems in the area of

production

Division Total

Namakkal Tiruchengode No. %

No. % No. %

Yes 205 96.70 66 100 271 97.5

No 7 3.30 - - 7 2.5

Total 212 100 66 100 278 100

The above Table shows that in Namakkal Division 96.70% of

respondents have problems in respect of production activities and in

Tiruchengode Division all (100%) of them have problems in production

activities.

The problems enumerated by the sample farms are high cost of chicks

and frequent fluctuations in prices, high cost of feed and shortage of feed

ingredients, cost of labour, high rate of infection, high rate of mortality of

birds, lack of adequate training facilities, lack of veterinary services, lack of

facility to check quality of feed, electricity supply, under utilization of installed

capacity, cost of medicines, lack of assistance from the government, shortage

of water and delay or irregularity in supply of input. Opinion of the

respondents regarding problems faced are shown in the following table.

140

TABLE 3.30

OPINION ON THE PROBLEMS IN RESPECT OF PRODUCTION BY

SAMPLE UNITS

S.No. Problems faced HA A N DA HDA Total

No. % No. % No. % No. % No. % No.

1.

High cost of

Chicks and

frequent

fluctuations in

the prices

156 57.56 94 34.69 17 6.27 3 1.11 1 0.37 271

2.

High cost of

feed and

shortage of feed

ingredients

148 54.61 111 40.96 11 4.06 - - 1 0.37 271

3. Cost of labour 125 46.13 126 46.49 20 7.38 - - - - 271

4. High rate of

infection 114 42.07 127 46.86 25 9.23 5 1.85 - - 271

5.

High rate of

mortality of

birds

90 33.21 135 49.82 36 13.28 10 3.69 - - 271

6. Lack of adequate

training facilities 76 28.04 110 40.59 66 24.35 19 7.01 - - 271

7. Lack of

veterinary

services

95 35.06 100 36.90 52 19.19 23 8.49 1 0.37 271

8.

Lack of facility

to check quality

of feed

145 53.90 108 40.15 12 4.46 4 1.49 2 - 271

9. Electricity

supply 143 52.77 114 42.07 12 4.43 2 0.74 - - 271

10.

Under utilization

of installed

capacity

38 14.02 127 46.86 94 34.69 11 4.06 1 0.37 271

11. Cost of

medicines 75 27.68 160 59.04 30 11.07 5 1.85 1 0.37 271

12.

Lack of

assistance from

the government

87 32.10 118 43.54 55 20.30 9 3.32 2 0.74 271

13. Shortage of

water 89 32.84 114 42.07 58 21.40 9 3.32 1 0.37 271

14.

Delay or

Irregularity in

supply of inputs

148 54.61 111 40.96 11 4.06 - - 1 0.37 271


141

It is clear from the above table that majority 57.56 percent of the sample

farms have highly agreed with the problem of “High cost of chicks and

frequent fluctuations in the prices”, 54.61 percent of the respondents have

highly agreed with the problem of “High cost of feed and shortage of feed

ingredients”, 46.49 percent of the respondents have agreed with the problem of

“Cost of labour”, 46.86 percent of the respondents have agreed with the

problem of “High rate of infection”, 49.82 percent of the respondents have

agreed with the problem of “High rate of mortality of birds”, 40.59 percent of

the respondents have greed with the problem of “Lack of adequate training

facilities”, 36.90 percent of the respondents have agreed with the problem of

“Lack of veterinary services”, 53.90 percent of the respondents have highly

agreed with the problem of “Lack of facility to check quality of feed”. 52.77

percent of the respondents have highly agreed with the problem of “Electricity

supply” and 46.86 percent of the respondents have agreed with the problem of

“Under utilization of installed capacity ”, 59.04 percent of the respondents have

agreed with the problem of “Cost of medicines”, 43.54 percent of the

respondents have agreed with the problem of “Lack of assistance from the

government”, 42.07 percent of the respondents have agreed with the problem

of “Shortage of water” and 54.61 percent of the respondents have highly agreed

with the problem of “Delay or Irregularity in supply of inputs”.

142

To identify the most prominent problem faced by the sample farms the

Friedman‟s test analysis was used and the results are given in Table 3.30a.

TABLE 3.30a

FRIEDMAN’S TEST

S.No. Problems Mean SD Mean

Rank

1. High cost of Chicks and frequent fluctuations in

the prices 4.74 0.45 9.76

2. High cost of feed and shortage of feed

ingredients 4.78 0.51 10.13

3. Cost of labour 4.33 0.68 7.37

4. High rate of infection 4.41 0.69 8.04

5. High rate of mortality of birds 4.19 0.74 6.72

6. Lack of adequate training facilities 3.93 0.78 5.41

7. Lack of veterinary services 4.26 0.81 7.30

8. Lack of facility to check quality of feed 4.11 0.70 6.15

9. Electricity supply 4.33 0.55 7.28

10. Under utilization of installed capacity 3.56 0.70 3.98

11. Cost of medicines 4.52 0.64 8.52

12. Lack of assistance from the government 3.89 0.70 5.11

13. Shortage of water 4.59 0.69 9.11

14. Delay/Irregularity in supply of inputs 4.78 0.51 10.13

It could be noted from the Table 3.30a that among the problems “High

cost of feed and shortage of feed ingredients & Delay/Irregularity in supply of

inputs” was ranked first. “High cost of Chicks and frequent fluctuations in the

prices” was ranked second and “Shortage of water” was ranked third.

143

Test for Mean score regarding Problems in the area of production

(Average score analysis)

The significant difference between the mean scores of the problems in

the area of production were tested using the inferential statistics of Analysis of

variance (ANOVA) and the Independent t test after verifying the normality

assumption by Q-Q Plot technique.

The test for mean scores Analysis of Variance (ANOVA) test procedure

is used to compare mean scores of more than two groups. The procedure

assumes that the variances of the groups are equal and it was tested with

Levene‟s test statistics and is used to test the significant difference between the

mean score in the area of production among the respondents regarding various

problems in the area of production.

The level of problem to respondents and the personal profile factors

namely size of farm, age (yrs), education, marital status, type of business, were

analyzed in this section at 5% level of significance. The table displays the

descriptive statistics of the sample size, mean, standard deviation and Mean %.

The table also shows that the F statistics, calculated as the ratio of the

variances. The column P value shows the probability value from the F

distribution.

144

1. Size of farm and Level of Problem

Test for mean scores regarding problems in the area of production and

size of farm were tested with ANOVA test procedures and the results of the

analysis are given in Table 3.31.

Null Hypothesis: H0: There is no significant difference between the mean

scores regarding problems in the area of production and the size of farm.

To study the effect of size of farm, the distributions of sample

respondents according to Size of farm and the Level of problem among the

respondents are shown in the Table 3.31.

TABLE 3.31

SIZE OF FARM AND LEVEL OF PROBLEM

Size of farm Range

Mean SD Mean % F p Min Max

Small 3.21 4.64 4.07 0.32 81.33

27.91 < 0.001 Medium 2.07 4.43 3.93 0.38 78.67

Large 3.00 4.21 3.63 0.29 72.67

It could be noted from the table that the level of problem among Small

size firm ranged between 3.21 and 4.64 with an average of 4.07, the level of

problem among Medium size farm ranged between 2.07 and 4.43 with an

average of 3.93 and the level of problem among Large size farm ranged

between 3 and 4.21 with an average of 3.63.

Table 3.31 also shows the F statistics and „p‟ value. As „p‟ value is less

than 0.01 the null hypothesis is rejected. Hence a significant difference is

observed in the level of problem with respect to the size of farm.

Thus, it is inferred from the above analysis that the maximum Level of

problem was among Small size farm.

145

2. Age and Level of Problem


Age of the respondents were tested with ANOVA and the results of the

analysis are given in Table 3.32.


scores regarding problems in the area of production and the age of the

respondents.

To study the effect of age, the distribution of sample respondents

according to Age and the Level of problem among the respondents are shown

in the Table 3.32.

TABLE 3.32

AGE AND LEVEL OF PROBLEM

Age (in years) Range

Mean SD Mean% F p Min Max

25-35 2.07 4.50 3.81 0.65 76.23

1.43 0.234 36-45 2.64 4.57 3.89 0.37 77.72

46-55 2.71 4.64 3.98 0.34 79.51

Above 55 3.00 4.64 3.91 0.36 78.21

It could be noted from the table that the level of problem among 25-35

age group was ranged between 2.07 and 4.50 with an average of 76.23, the

level of problem among 35-45 age group was ranged between 2.64 and 4.57

with an average of 3.89, the level of problem among 45-55 age group was

ranged between 2.71 and 4.64 with an average of 3.98 and level of problem

among the age group of above 55 was ranged between 3 and 4.64 with an

average of 3.91.

Since the „p‟ value is more than 0.05 the null hypothesis is accepted.

Hence a significant difference is observed in the level of problem with respect

to the age of the respondents.


problem was among the respondents in the age group of 46-55.

146

3. Education and Level of Production Problem


Education of the respondents were tested with ANOVA test procedures and the

results of the analysis are given in Table 3.33.


scores regarding problems in the area of production and the education of the

respondents.

To study the effect of education, the distribution of sample respondents

according to Education and the Level of problem among the respondents are

shown in the Table 3.33.

TABLE 3.33

EDUCATION AND LEVEL OF PROBLEM

Education Range

Mean SD Mean% F p Min Max

No formal education 3.79 4.43 4.15 0.19 83.09

6.26 0.002 Secondary education 2.64 4.64 3.93 0.37 78.50

College education 2.07 4.64 3.86 0.39 77.27

It could be noted from the table that the level of problem among

respondents with no formal education ranged between 3.79 and 4.43 with an

average of 4.15, the level of problem among the respondents with education

upto secondary level ranged between 2.64 and 4.64 with an average of 3.93 and

the level of problem among respondents with collegiate education ranged

between 2.07 and 4.64 with an average of 3.86.

Since the „p‟ value is less than 0.01 the null hypothesis is rejected.


to the education of the respondents.

Thus, it is inferred from the above analysis that the maximum level of

problem was among respondents with no formal education.

147

4. Marital status and level of problem


Marital status of the respondents were tested with ANOVA test procedures and

the results of the analysis are given in Table 3.34.


scores regarding problems in the area of production and the marital status of

the respondents.

To study the effect of marital status, the distribution of sample

respondents according to Marital status and the level of problem among the

respondents are shown in the following Table 3.34.

TABLE 3.34

MARITAL STATUS AND LEVEL OF PROBLEM

Marital Status Range

Mean SD Mean % t p Min Max

Married 2.64 4.64 3.93 0.35 78.67 3.22 0.001

Unmarried 2.07 4.21 3.40 0.87 68.00

It could be noted from the table that the Level of problem among

married ranged between 2.64 and 4.64 with an average of 3.93 and the Level of

problem among unmarried ranged between 2.07 and 4.21 with an average of

3.40.



to the marital status of the respondents.


problem was among married.

148

5. Type of business and Level of Problem


Type of business of the respondents were tested with ANOVA test procedures

and the results of the analysis are given in Table 3.35.


scores regarding problems in the area of production and the type of business.

To study the effect of type of business, the distributions of sample

respondents according to Type of business and the level of problem among the

respondents are shown in the Table 3.35.

TABLE 3.35

TYPE OF BUSINESS AND LEVEL OF PROBLEM

Type of Business Range


Poultry farming only 2.07 4.43 3.82 0.66 76.36

1.60 1.190

Poultry farming and

Agriculture 2.64 4.64 3.90 0.37 78.07

Poultry farming and Business 3.21 4.64 3.98 0.34 79.69

Poultry farming and Employed 3.43 4.36 4.07 0.25 81.43

It could be noted from the above table that the level of problem among

respondents of poultry farming business only ranged between 2.07 and 4.43

with an average of 3.82, the level of problem among the respondents of poultry

farming and agriculture business ranged between 2.64 and 4.64 with an average

of 3.90, the level of problem among respondents of poultry farming and

business ranged between 3.21 and 4.64 with an average of 3.98 and the level of

problem among respondents of poultry faming and employed ranged between

3.43 and 4.36 with an average of 4.07.

Since the „p‟ value is greater than 0.05 the null hypothesis is accepted.

Hence no significant difference is observed in the level of problem with respect

to the type of business.

Thus, it is inferred from the above analysis that the maximum level of

problem was among respondents having both poultry farming and employed.

149

2. Problems in marketing of eggs

The problems in the marketing of eggs faced by sample farms are price

fluctuation, transportation, climatic condition, academic season, diseases,

religion, festive seasons, middlemen intervention, storage cost, market handling

charges, export and noon meal schemes.

TABLE 3.36

OPINION ON THE PROBLEMS FACED BY SAMPLE UNITS IN

MARKETING OF EGGS

S.No. Problems HA A N DA Total

No. % No. % No. % No. % No. %

1. Price

Fluctuation 171 63.3 92 34.1 7 2.6 - - 270 100

2. Transportation 73 27.0 162 60.0 35 13.0 - - 270 100

3. Climatic

condition 73 27.0 128 47.4 69 25.6 - - 270 100

4. Academic

season 109 40.4 88 32.6 71 26.3 2 0.7 270 100

5. Diseases 123 45.6 95 35.2 52 19.3 - - 270 100

6. Religion 30 11.1 142 52.6 92 34.1 6 2.2 270 100

7. Festive seasons 53 19.6 145 53.7 70 25.9 2 0.7 270 100

8. Middlemen

intervention 52 19.3 104 38.5 79 29.3 35 13.0 270 100

9. Storage cost 57 21.1 123 45.6 73 27.0 17 6.3 270 100

10.

Market

Handling

Charges

80 29.7 121 45.0 54 21.0 15 5.6 270 100

11. Export 182 67.4 65 24.1 10 3.7 13 4.8 270 100

12. Noon meal

Schemes 101 37.4 101 37.4 50 18.5 18 6.7 270 100


150

It is clear from the table 3.36 that majority 63.3 percent of the

respondents have highly agreed with the problem of “Price Fluctuation”,

60 percent of the respondents have agreed with the problem of

“Transportation”, 47.4 percent of the respondents have agreed with the problem

of “Climatic Condition”, 40.4 percent of the respondents have highly agreed

with the problem of “Academic season”, 45.6 percent of the respondents have

highly agreed with the problem of “Diseases”, 52.6 percent of the respondents

have agreed with the problem of “Religion”, 53.7 percent of the respondents

have agreed with the problem of “Festive seasons”, 38.5 percent of the

respondents have agreed with the problem of “Middlemen intervention”, 45.6

percent of the respondents have agreed with the problem of “Storage cost”, 45

percent of the respondents have agreed with the problem of “Market Handling

Charges”, 67.4 percent of the respondents have highly agreed with the problem

of “Export” and 37.4 percent of the respondents have highly agreed and agreed

with each of the problem of “Noon meal schemes”. No respondent has stated

as strongly disagree with the problems in marketing of eggs.

151

To identify the more prominent problem faced by the respondents

Friedman‟s test analysis was used and the results are given in Table 3.36a.

TABLE 3.36a

FRIEDMAN’S TEST

S.No. Problems Mean SD Mean Rank

1. Price Fluctuation 4.61 0.532 8.70

2. Transportation 4.14 0.619 6.64

3. Climatic condition 4.01 0.725 6.04

4. Academic season 4.13 0.828 6.66

5. Diseases 4.26 0.762 7.25

6. Religion 3.73 0.683 4.96

7. Festive seasons 3.92 0.695 5.80

8. Middlemen intervention 3.64 0.935 5.00

9. Storage cost 3.82 0.838 5.58

10. Market Handling

Charges 3.99 0.849 6.23

11. Export 4.54 0.784 8.66

12. Noon meal Schemes 4.05 0.909 6.49

It could be noted from the above table that among the twelve factors

“Price Fluctuation” was ranked first. It was followed by the “Export”,

“Diseases” was ranked third.

152

Test for Mean score regarding Problems in marketing of eggs (Average

score analysis)

The association between Level of Problem to respondents and the

personal profile factors namely Size of farm, Age (yrs), Education, Marital

Status, Type of Business, were analyzed in this section. The chi square test is

used at 5% level of significance.

1) Size of farm and Level of Problem

Test for mean scores regarding problems in the marketing of eggs and

Size of farm of the respondents were tested with ANOVA test procedures and



scores regarding problems in the marketing of eggs and the size of farm of the

respondents.

To study the effect of size of farm, the distribution of sample

respondents according to Size of farm and the Level of problem among the


TABLE 3.37

SIZE OF FARM AND LEVEL OF PROBLEM

Size of farm Range


Small 3.42 4.67 4.14 0.29 82.71

9.41 < 0.001 Medium 3.17 4.75 3.98 0.30 79.65

Large 3.33 4.92 4.14 0.29 82.83

It could be noted from the table that the Level of problem among Small

size farm was ranged between 3.42 and 4.67 with an average of 4.14, the Level

of problem among Medium size farm was ranged between 3.17 and 4.75 with

an average of 3.98 and the Level of problem among Large size farm was

ranged between 3.33 and 4.92 with an average of 4.14.

153


Hence a significant difference is observed in the area of marketing of eggs in

the level of problem with respect to size of farm. Thus, it is inferred from the

above analysis that the maximum Level of problem was among large size farm.

154

2. Age and Level of Problem


Age of the respondents were tested with ANOVA test procedures and the



scores regarding problems in the marketing of eggs and the age of the

respondents.

To study the effect of age, the distributions of sample respondents

according to age and the Level of problem among the respondents are shown in

the following Table 3.38.

TABLE 3.38

AGE AND LEVEL OF PROBLEM

Age (yrs) Range

Mean SD Mean % F/t p Min Max

25 - 35 3.58 4.33 4.04 0.23 80.83

1.18 0.318 36 - 45 3.17 4.75 4.07 0.30 81.37

46 - 55 3.42 4.92 4.10 0.32 81.95

Above 55 3.33 4.50 3.99 0.27 79.87

It could be noted from the table that the Level of problem among 25-35

age group was ranged between 3.58 and 4.33 with an average of 4.04, the Level

of problem among 36-45 was ranged between 3.17 and 4.75 with an average of

4.07, the Level of problem among 46-55 was ranged between 3.42 and 4.92

with an average of 4.10 and Level of problem among above 55 was ranged




to age of the respondents.


problem was among 46-55 age group.

155

3) Education and Level of Problem


education of the respondents were tested with ANOVA test procedures and the



scores regarding problems in the marketing of eggs and the education of the

respondents.

To study the effect of education, the distributions of sample respondents

according to education and the Level of problem among the respondents are

shown in the following Table 3.39.

TABLE 3.39

EDUCATION AND LEVEL OF PROBLEM

Education Range


No formal education 3.58 4.50 4.04 0.24 80.73

0.33 0.722 Secondary

education 3.17 4.92 4.06 0.33 81.26

College education 3.42 4.75 4.09 0.27 81.72

It could be noted from the table that the Level of problem among No

formal education was ranged between 3.58 and 4.50 with an average of 4.04,

the Level of problem among secondary was ranged between 3.17 and 4.92 with

an average of 4.06 and the Level of problem among college was ranged




to education of the respondents.


problem was among respondents with college education.

156

4) Marital status and Level of Problem


marital status of the respondents were tested with ANOVA test procedures and



scores regarding problems in the marketing of eggs and the marital status of the

respondents.

To study the effect of marital status, the distributions of sample

respondents according to marital status and the Level of problem among the


TABLE 3.40

MARITAL STATUS AND LEVEL OF PROBLEM

Marital Status Range

Mean SD Mean

% F/t p

Min Max

Married 3.17 4.92 4.07 0.30 81.37 0.24 0.814

Unmarried 4.00 4.25 4.10 0.10 82.08

It could be noted from the table that the Level of problem among

married was ranged between 3.17 and 4.92 with an average of 4.07 and the

Level of problem among unmarried was ranged between 4 and 4.25 with an

average of 4.10.



to marital status of the respondents.


problem was among unmarried.

157

(3) Problems experienced in getting financial assistance from banks

The major problem experienced by the sample farms in Namakkal

District are inadequate financial assistance, delay in sanctioning of the loan

amount, complicated procedure and formalities, shortage of securities to pledge

and bird flu outbreak. Out of the 278 sample farms, majority 153 (55%) of the

sample farms have employed both own and borrowed funds in the business.

The poultry farmers raise borrowed funds mainly from the commercial banks.

Obtaining financial assistance from banks is not a smooth process and it

involves a lot of paper work and formalities.

The distribution of ranks assigned by the respondents for the various

problems experienced while getting financial assistance from banks is shown in

Table 3.41.

TABLE 3.41

RANKING OF THE PROBLEMS EXPERIENCED IN GETTING

FINANCIAL ASSISTANCE BY THE SAMPLE FARMS FROM BANKS

S.No Problems

Ranks Total

1 2 3 4 5

No. % No. % No. % No. % No. % No. %

1.

Inadequate

financial

assistance

18 28.6 17 27.0 9 14.3 11 17.5 8 12.7 63 100

2.

Delay in

sanctioning

the amount

18 28.6 20 31.7 16 25.4 7 11.1 2 3.2 63 100

3.

Complicated

procedures

& formalities

18 28.6 12 19.0 22 34.9 8 12.7 3 4.8 63 100

4.

Shortage of

securities to

pledge

5 7.9 6 9.5 9 14.3 24 38.1 19 30.2 63 100

5. Bird flu

outbreak 4 6.3 8 12.7 12 19.0 10 15.9 29 46.0 63 100

158

It is evident from Table 3.41 that regarding each of the problems of

“Inadequate financial assistance” “Delay in sanctioning the amount” and

“Complicated procedures & formalities”, 28.6% of the sample farms have

assigned rank one.

Regarding the problem “Shortage of securities to pledge” 7.9% of the

respondents have assigned rank one and 6.3% of the respondents have assigned

rank one for the problem “Bird flu outbreak”.

To identify the most prominent problem faced by the respondents Henry

Garrett ranking method was applied and the results of shown in the table

below.

TABLE 3.41a

GARRETT RANKING

S.

No. Problems Garrett Score Garrett Rank

1. Inadequate financial assistance 54.62 III

2. Delay in sanctioning the

amount 58.27 I

3. Complicated procedures &

formalities 56.41 II

4. Shortage of securities to

pledge 40.90 IV

5. Bird flu outbreak 39.14 V

It could be observed from the above table that the problem „Delay in

sanctioning the amount‟ was ranked first followed by „Complicated procedures

and formalities‟ and „Inadequate financial assistance‟ was ranked third.

159

C. POULTRY INDUSTRY AND ITS FUTURE PROSPECTS

Poultry occupies a special place in India, as the eggs and chicken

provide important and rich sources of protein, vitamins and minerals. It

provides rich organic manure and is an important source of income and

employment to millions of farmers and others engaged in allied activities in the

poultry industry.

Poultry Industry and India

India is the fifth largest producer of eggs and ninth largest producer of

poultry meat in the world, producing over 34 billion eggs and about 600,000

tons of poultry meat in 2004. In the overall market for poultry products, India is

positioned 17 in World Poultry Production. And analysts estimate that the

poultry sector in India has been growing at a much faster rate, along with other

industries such as BPO and Securities market. Over the past decade the poultry

industry in India has contributed approximately US $229 million, to the Gross

National Product (GNP). 6

Consumer Demand and Preferences

Poultry always has an increasing demand all over the world. In spite of

propaganda raised by organizations promoting vegetarianism and in spite of

threat of salmonella, world poultry industry is expanding, as the population is

increasing. Per capita consumption is also increasing. Not only that, many

countries which are not traditionally poultry - growers are giving incentives to

their poultry industry.

Overall, analysts studies that the total egg consumption is estimated to

increase from 34 billion in 2000 and to 106 billion in 2020, while poultry meat

consumption is predicted to increase from 687 million kilograms to 1,674

million kilograms. It has been found that egg consumption has grown at a much

faster pace, than the consumption of poultry meat. With the continual rise in

income, it is estimated to nearly triple by 2020. 7

160

Work carried in a poultry industry

Every poultry industry carries a common set of work from hatching to

culling. Each set of work can be done as a separate business and can support

other vendors who are in these industries. Sometimes all set of work can be

taken by a same vendor with different business units. In either case the business

has a huge set of demand on every part of work.

Eggs are used to bind a dish and, when whipped, may also incorporate

air making a cake or pudding very light. Vegan egg replacement powders are

available in health food shops. This can be useful, especially for tricky foods

like meringues.

Preference of white meat over dark meat

Dark meat also called as Red meat generally refers to beef, mutton, pork

and chevron. These meats are high in cholesterol. White meat is generally fish

and chicken. They have less content of cholesterol. It is cheap in price

compared to dark meat. In today‟s environment, taste and preference of

customer plays a crucial role in setting the demand of the product. This taste

and preference greatly depend on health consciousness factor and price.

As the white meat has a good nutritional value and is less in cholesterol,

it is greatly recommended by doctors, physicians and other health inspectors.

Also the price is comparatively low with dark meat. These factors generally

make a higher performance for white meat over dark meat.

Poultry market in India

In India, Namakkal is the major contributor of Indian market. This major

poultry producer of India, has been witnessing a positive change in the recent

years. The district alone accounts for about 75 per cent of the birds produced in

the Tamil Nadu zone of the National Egg Coordination Committee. The poultry

industry in India is vibrant despite a plethora of problems facing it. The zone

produces about 2.5 crore eggs a day, with Namakkal contributing 1.75 crore of

the total production. The labour-intensive sector provides direct employment to

over one lakh people. 8

161

The two issues confronting the sector are the ban imposed by some West

Asian countries on the import of table eggs from India and the spiralling cost of

poultry feed. The volume of export dropped to 20 lakh eggs a day from 50 lakh

after some Gulf nations banned egg import in the wake of the outbreak of bird

flu in some parts of India. The poultry farms in Namakkal zone have adopted

bio-security measures and carry out regular vaccinations. There is a proposal to

establish a disease research laboratory for the poultry industry. This would

boost the table eggs export from this part of the State.

Export prospects

According to Dr. P. Selvaraj, Chairman of the National Egg

Coordination Committee's Namakkal Zone, the buoyancy of the export trade

and the market potential opening out for the Indian table eggs in the West

Asian market has thrown greater opportunity for the layer egg producers in the

region.

World Survey on poultry

In a magazine, World-Poultry, an international magazine of poultry

business, a survey was conducted to study the prices of eggs and prices of

poultry feed in 45 countries. Conversion ratio that is an index of conversion of

feed into eggs was given due weightage. It was certainly an in-depth study of

poultry business in the world. The report points out that eggs are cheapest in

India, even though feed costs are not cheapest.

Finance for poultry

For the self sufficient poultry industry with complete sophistication in

the fields of production, breeding stocks, high quality feeds, pharmaceuticals,

medicines, poultry vaccines and equipment, the National Agricultural Bank and

Rural Development (NABARD) along with commercial and cooperative banks

are financing a large number of poultry schemes all over the country for

increasing production of eggs and broiler meat. The NABARD refinance for

poultry was about Rs.8.08 crores in 1983-84. This increased to Rs. 26 crores in

1985-86. This increased to Rs. 26 crores in 1985-86. This indicates the role that

162

is being played by banking institutions in poultry development. The NABARD

provides refinance assistance for poultry development for the following

purposes.

Schemes for poultry breeding including financing of pure line poultry

projects to produce grandparent stocks.

Financial assistance to hatcheries to produce commercial one day old

broiler or layer chicks from poultry breeding stocks.

Financing for the setting up of commercial egg production farms of

different sizes by small, medium and large farmers.

Financing for the setting up of commercial egg production farms of

different sizes by small, medium and large commercial broiler farmers.

Financial assistance for the manufacture of poultry medicine and

vaccines.

Financial assistance for egg marketing, broiler processing, preservation

and marketing of poultry meat.

The production of eggs has now reached an average of 300 eggs per year

per bird. The broiler growth now reached the stage of 1.75 kg per bird within

6 to 7 weeks. It is expected that the average growth in layers industry may be

around 7 to 8%, while in the case of broilers industry, it may be between

20-25% annum in the next decade. 9

The transformation of poultry farming in India from an age-old

backyard venture into an organised industrial proposition is the impact of

up-to-date technology and sound policies adopted by Governmental and

semi-governmental (including private) organisations of the country.

Feed Cost all over the world

Major cost as production of eggs is for the feed. These feed cost can be

reduced. India is gifted with natural sunshine, cultivable land, and sufficient

rains. And there is millions of unemployed. Even by providing water to thirsty

lands, we can make poultry feed that can be sufficient for the world poultry.

163

Even by controlling post harvest losses of food grains we will be able to feed

world poultry and world diary. Many countries have to import feed for their

poultry industry. India is lucky. We export 24 million tonnes of soya bean cake

to Europe, which is the main ingredient of poultry feed. We can export eggs or

chicken meat instead of soya bean-cake.

Poultry industry and electricity generation

An entrepreneur from Namakkal claims that the poultry's dropping litter

"holds the key" to electricity generation. He is confident that if the total poultry

litter in the Namakkal district is collected daily (6000 tonnes) and processed

nearly 16 MW of power an hour can be generated with 1000 tonnes of manure

and 10,000 litres of liquid biofertilizer as by products. It is organisation which

is touted as the country's first power project that extracts energy from poultry

excrement, produces now 3.76 MW of electricity.

The bird muck is collected daily from several places and brought to the

factory, where it is fed into a processing unit. It emits methane gas that is

converted into electricity with a patented technology. The slurry, generated as a

residue, is sold as manure and liquid bio-application to farmers.

The plant has been recognised by the Union Ministry of New and

Renewable Energy as a demonstration project for sustainable clean energy. The

plant is also one among the 11 projects worldwide approved by the United

Nations Development Programme. It has also been declared a clean

Development Project under the Kyoto Protocol to the United Nations

Framework convention on climate change. Many such plants would be a cheap

source of electricity in Tamilnadu, which is plagued by power shortage. 10

Indian Overview

Indian poultry industry is at cross road - considerable progress is already

made but we have miles to go. Most of the global brands are available in India,

still there are some opportunities for technology transfer particularly organic

brand and processing is as good as non-existent. There is a great potential

which is yet to be tapped. The market research report "Vision for Indian

164

Poultry Industry: Current Scenario and Future Prospects" predicts a relatively

strong growth for the egg and poultry meat industry, in both the urban and rural

areas, in the next two decades.

Future of poultry industry depends on Government and Indian

Entrepreneurship. There is lot of scope and future prospects for poultry

industry in India. If the market of this industry is rightly tapped by the

entrepreneurs, it is a “Golden Egg” industry for the future.

CONCLUSION

Production performance of poultry farms reveals that the average total

cost incurred for MSF with company feed was high when compared to LSF

with own feed and it was moderate in the case of SSF with company feed.

Though the formalities for getting loans from banks is complicated one, most

of the farmers rely on the banks for their financial assistance. The repayment of

loan is made promptly by most of the farmers. The net return from poultry

farming was more for SSF with company feed and it was low for MSF with

company feed. The reason behind this variation is that in the case of SSF with

company feed farmers sell their eggs to the traders at NECC rate and they

spend less amount towards labour charges and also they get high price for sale

of Gunny bags. In the case of MSF with company feed the overhead expenses

like electricity, water tank and maintenance charges are shared by less number

of birds and the feed cost was more. The net return from LSF was moderate

and it was between that of SSF and MSF. Problems faced by the poultry

farmers could also be reduced by implementing the suggestions given by the

poultry farmers.

165

REFERENCES

1. Dr. R. Mohanraj & Dr. L. Manivannan, "A Study on Economic Profile and

Financial Decision of Poultry Farm owners with reference to Namakkal District",

TN, IJMT Volume 2, Issue 5, May 2012.

2. Dr. P. Selvaraj, Chairman of NECC, Namakkal, The Hindu, April 26,2011.

3. The Hindu, Namakkal, July 15, 2012.

4. "An analysis of Production Strategy on Poultry Farms in Namakkal, TamilNadu".

(http : //umrefjournal.um.edu.my/filebank/article/418.

5. K.G. Anand, "Challenges and Opportunities for Marketing of Poultry Products".

(Marketing of Poultry Products, poulvet.com)

6. "Vision for Indian Poultry Industry: Current Scenario and Future Prospects",

PRLOG Press Release Distribution, (http://prlog.org).

7. "Vision for Indian Poultry Industry": Current Scenario and Future Prospects",

RNCOS Industry Research Solutions, (http://www.rncos.com).

8. "Transformation of Poultry Farming in India" The UK's expert provider of

custom essays, (UKESSAYS.com).

9. Ibid.

10. M.J.Prabhu, "Electrifying Enterprise - Poultry farmer turns litter into light", The

Hindu, Coimbatore, July 4, 2013 pp. 20.

chapter - iii analysis of performance and problems of...

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