P.V.K. Sasidhar, Associate Professor, Indira Gandhi National Open University (IGNOU), School of Extension and Development Studies, New Delhi -110068 (India)
Murari Suvedi, Professor, Michigan State University (MSU), Department of Community, Agriculture, Recreation and Resource Studies, East Lansing, MI - 48824 (USA)
Even though commercialization can yield substantial gains, the transition from subsistence farming to market driven broiler production is burdened with risk (Von and Kennedy, 1994). The important issues connected with commercial broiler production are: i) Market volatility which makes the broiler rearing a risky enterprise, ii) Taste shifts of consumer in favour of processed chicken and small farmers are too distant from consumers to track their preferences, and iii) Lack of capital and technical expertise among small broiler farmers. These problems are serious enough that they could effectively choke off participation in markets except the large farmers. One of the value chain development arrangements that enable market access by small broiler farmers in South India now is extension and advisory services (EAS) provision by large private poultry companies through integrated contract broiler farming. The nature of contracting has been instrumental in removing small broiler farmer’s risk through buyback guarantee and also provision of coping against production failure. Provision of quality inputs such as chicks, feed and medicine has helped the farmers raise quality chickens. Apparently, balanced contracts that benefit both parties in terms of assured markets, competitive price and guarantee against risk have resulted in successful value chain development through contract broiler farming (Gulati, 2008).
a. Non Contract Farming : In this scenario the farmer is responsible for all the expenses and activities viz., EAS from private veterinarians, procurement of day old chicks, feed, overhead farm expenses (water/heating/cooling/disinfecting the farm etc), medical costs, transportation and market risk.
b. Contract Farming / Integration : In this case, the integrator provides EAS, supplies the day old chicks, feed, medications, veterinary supplies and implements that may be required (E.g. : water dispensers, feeders etc). The integrator also bears the marketing responsibility (risk) and the expense involved in transportation (to and from the farm). The contract farmer provides his labor and space for the shed and other related services or equipment that may be required. Since the major chunk of the expense ( working capital) is borne by the integrator-he is the absolute owner of the moveable stocks ( broiler) on the farm and the farmer’s role is like that of a ‘care-taker’ who gets a pre-determined price which is listed in the contract. This payment to the farmer is linked to various parameters such as the feed conversion ratio, mortality of birds etc. A farmer is rewarded for surpassing the set standards and penalized if any of the agreed criteria is not met.
Keeping this in view, this proposal aims at evaluating EAS through integrated contract broiler farming in India’s Karnataka and Andhra Pradesh states with the following objectives.
Locale & Respondents of the Evaluation: The evaluation study will be conducted in India’s Karnataka and Andhra Pradesh states by survey method. These states are selected mainly because of their contribution to poultry revolution, huge presence of contract broiler farms and big contract firms in the region. About 4600 farms in Karnataka and 6000 farms in Andhra Pradesh are under contract broiler farming. Three districts each in Karnataka (Chitradurga, Davanagire and Bellari) and Andhra Pradesh (Ranga Reddy, Mahaboobnagar and East Godavari) are purposively selected based on highest number of contract broiler farms. From every district, 20 contract farmers will be randomly selected to arrive a total of 120 farmers from both the states. Another 120 non-contract poultry farmers will be selected from the same districts as control group. Thus the primary data will be collected from total 240 respondents by personal interview method. Eight case studies (4 contract and 4 non-contract broiler farmers) and two focus group discussions with all stakeholders will be conducted to assess the qualitative data.
Prof. Murari Suvedi will design overall evaluation study, analysis of the data and report preparation.
Gulati, Ashok. (2008). Fragmenting Bottom and Consolidating Top: India’s Changing Food System and Implications for Small Holders, in India: Some aspects of Economic and Social development (eds.) S.Mahendra Dev and K.S. Babu. Academic Foundation, India.
Mehta, R., R.G. Nambiar, C. Delgado and S. Subramanyam (2003). Policy, technical and environmental determinants and implications of the scaling-up of broiler and egg production in India. Annex II of the IFPRI-FAO Final Report Livestock Industrialization, Trade and Social-Health-Environmental Impacts in Developing Countries, phase II, International food Policy Research Institute, Washington DC.
Saran, S., Sasidhar, P.V.K, Sastry,K.V.H. and Rajvir Singh (2005). Indian poultry industry: Current scenario and future prospects. Indian Journal of Animal Sciences, 75 (8): 992-998.
USDA, (2004), India’s Poultry Sector, Development and Prospects, Agriculture and Trade Reports, Economics Research Service, WRS-04-03.
von Braun, J., and E. Kennedy. 1994. Ed. Agricultural Commercialization, Economic Development, and Nutrition. Johns Hopkins University Press.