The Hindu Business Line : Glut haunts TN broiler producers

The State's broiler sector presents the paradox of witnessing continuous expansion of chicken farms even as the existing integrated players are steadily losing prices.

Coimbatore , Oct. 13

OVER-EXPANSION seems to be bugging the broiler producers in Tamil Nadu whose live-birds marketing hit the high-volume low-efficiency syndrome, thanks to the mismatch between price realisation and production cost.

The broiler sector at the same time presents the paradox of continuous expansion of chicken farms even as the existing integrated players are steadily losing prices amidst rising production of live birds, industry sources say.

"At its current output at 40 lakh birds per week, Tamil Nadu broiler sector turns out at least five times higher production than that of the average all-India chicken output making the State producing more than that required by the consumers. As against the one kg national average per capita equivalent broiler production, the live-bird production per capita equivalent in Tamil Nadu and Kerala is five kg," said Dr P. Selvaraj, Vice-President of the State's Broiler Coordination Committee.

This excess production has created problems for the chicken farms in the State which stand to witness a growing mismatch between the production cost and the availability of essential raw material such as maize, soyameal and rice bran oil whose cost hit the roof in recent times, Dr Selvaraj told Business Line.

This year, maize prices touched Rs 7,600 per tonne, soya Rs 17,000 and rice bran oil Rs 37,000. Though these prices had at present sobered, the basic problem for the broiler producers remained unchanged - the selling price falling by 15 per cent and raw material prices climbing up in the 40-80 per cent band.

The intensive broiler rearing practices in the State has given room for higher pilferage and diseases. This apart, the traditional consumer market for the broilers produced in the western Tamil Nadu had all along been Kerala, Karnataka and Chennai.

But this profile has changed of late and as against the earlier 90 per cent broiler supplies into Kerala, the latter market now received only 50 per cent of its requirement from Coimbatore belt. In the case of Chennai and Karnataka too, production of live birds in their immediate vicinity is good enough to meet the requirement.

Dr Selvaraj felt that part of the reason for the excess production lay in the liberal financing being extended by banks which, he said, had gone overboard in the anxiety to deploy credit to finance poultry projects without properly assessing their marketing arrangement/feed material outsourcing. Issues such as the availability of feed ingredients or the facility of getting the parent/grand-parent birds by these farms are also lost sight of by the lenders.

Dr Selvaraj held the view that a temporary halt or a go-slow in sanctioning project finance would be an ideal course for bankers

According to him, broiler production in the State is in excess by some 25 per cent. While the average production cost per kg of broiler this year has risen to Rs 30, the selling price hovers at Rs 27/29.