Agri Business

Poultry sector suffers ₹22,000-crore loss due to Covid-19

KV Kurmanath Hyderabad | Updated on September 28, 2021

Need to tap export opportunity and improve infra: CLFMA of India Chairman

The Covid-19 pandemic has hit the livestock sector in the country hard, with lockdowns impacting the demand. In an interview to BusinessLine, Neeraj Kumar Srivastava, Chairman of CLFMA of India, speaks on the key challenges that the sector faces and how to overcome them to increase revenues for the industry and profitability for farmers. Excerpts:

How has the pandemic impacted the livestock sector?

Even before India reported the first case of Covid-19, the rumours of poultry birds as the likely carrier of the virus started circulating in social media significantly reducing the demand for chicken meat in several parts of country in February-March 2020 and the poultry prices crashed to ₹4.5 a kg.

Government interventions and awareness campaigns by the industry had helped the situation. Even as it was settling, the market had crashed again due to the bird flu scare in January. This was followed by sharp increase in soyameal prices by over 175 per cent, severely impacting the profitability of farmers.

The estimated loss of the poultry industry alone due to impact of Covid-19 and associated lockdowns is more than ₹22,000 crore.

Due to the pandemic, the poultry industry registered a growth of only 2-3 per cent in FY20 (against an average annual growth rate of 7-8 per cent), and a decline of 4-5 per cent in FY21.

The industry is expected to touch the pre-Covid level demand only by the end of FY22 provided the Covid-related curbs are relaxed and institutional demand rebounds. The institutional consumption contributes more than 50 per cent of the total demand.

The $14-billion dairy industry also suffered a 25-30 per cent dip in demand. Bulk segment used to contribute about 15 per cent to the overall milk consumption.

With regard to aquaculture sector, the pandemic had caused a dip of 7.4 per cent in quantity and exports got badly hit.

What’s the demand outlook for the animal feed sector in the next 2-3 years?

The demand outlook looks great for the next 2-3 years. A recent survey by the Indian Market Research Bureau suggests that protein deficiency in people in the country is over 80 per cent. Over 135 crore people require about 25-30 million tonnes of protein. Livestock contributes 47-56 per cent of the protein and 20 per cent of the energy requirement and play an important role in meeting protein and energy demands.

India still has a very low meat consumption. At 4.5 kg per capita, it is very low when compared to 70-90 kg in developed economies. Increased disposable income will boost protein intake and a majority of it will come from livestock products.

There seems to be a shift in the buying and consumption behaviours of poultry products? What are the contours of the change?

Currently, about 92 per cent of the poultry products are sold through unorganised wet market and retail outlets. The remaining 8 per cent of the products is sold through branded retail outlets that process the products at processing centres on the city outskirts. After Covid-19, the eating habits of urban consumers are changing dramatically and by 2025 we may see a ratio of 70:30 between conventional shops and branded shops.

Online retailing of livestock products like meat, eggs and milk for home delivery will rise significantly.

What are the major challenges that the sector is facing?

The demand-supply gap of feed, fodder and concentrates is a major challenge. This shortage is attributed to increasing pressure on land for growing foodgrain, oilseeds and pulses and inadequate attention being given to the production of fodder crops. The deficit of green fodder, dry fodder and concentrates is expected to reach 40 million tonnes (mt), 21 mt, and 38 mt by 2025, respectively.

The other challenge is the occurrence of diseases. We expect the occurrence of diseases will be more frequent, and biosecurity and management will be a key focus. The shortage in skilled manpower and low productivity in dairy sector, too, are a cause for concern.

What are your suggestions to overcome these challenges and make the sector resilient?

We need to increase fodder and grain production with efficient use of available land and forest areas. We should also deploy technology, precision farming to boost yields on every available farm. We should also find more efficient ways to grow meat and introduce efficient feeding programmes for livestock.

We should also curtail the use of food crops for biofuels and evaluate and allow genetically modified grains to increase per acre productivity. We should focus on research – specifically on how to provide the optimal nutrition that results in minimal nutrient excretion or emission.

How big is the total opportunity for the feed players in the country? And, why is that a major chunk of the business is still in the hands of unorganised players?

Poultry and aquaculture industries are organised and mostly following ‘integration model’ where there’s a contract with multiple smaller farmers who rear the animals. The end produce of these farms are then lifted by the integrators, either for direct sales or for slaughter and further processing. The entire market risk is taken by the integrator and farmers are insulated from market fluctuations by getting paid a fixed rearing charges.

The market is largely unorganised in ruminants. The organised feed segment produces around 10.9 mt of compound feed, which is only 9 per cent of the total concentrate requirement of large ruminant population.

India is steadily witnessing an increase in per animal productivity due to improved genetics, management and nutrition. There’s only 0.83 per cent increase in cattle and 1 per cent increase in buffalo population in the last nine years. But, the total milk production has increased by 42 per cent and per capita availability by 32 per cent during the period. There’s has been a 40 per cent increase in per animal productivity but it’s still low compared to average world productivity.

How have the Indian feed players fared on export front? What’s the opportunity there?

India’s exports of animal products were ₹27,155.56 crore, including buffalo meat (₹23,460.38 crore), sheep/goat meat (₹330 crore), poultry products (₹435 crore), and dairy products (₹1,491.66 crore).

Currently, we are exporting meat to more than 64 countries and not a single outbreak of food-borne infections has been reported from the Indian consignments.

Inspite of huge livestock resource, we could never realise its full potential in the meat industry because of its cultural perception and religious beliefs. It’s high time we tapped this opportunity and simultaneously develop the interlinked sectors such as leather and pet foods.

In both poultry and dairy industry, there is a huge scope for improvement and higher growth. Lack of proper infrastructure and trained human resource happen to be the key concerns. An integral approach is needed for development of enhanced cold chain facility for storages and transportation.

Additionally, the country needs to focus more on value-added products with enhanced shelf-life and better packaging in order to compete in international trade market.

We need to formulate policies for promotion of our brands in the international market.

Published on September 28, 2021

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