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Volume 8 | Issue 2 | September, 2017 | 264-270  e ISSN-2231-6434

Research Paper An economic analysis of challenges and feasibility

of poultry industry in Tamil Nadu

N. AMIRTHALINGAM, M. PRIYANGA AND K. SITA DEVI

See end of the paper for

ABSTRACT : The Indian poultry industry has been on the continuous growth trajectory in the recent
authors’ affiliations
past aided by different contributing factors of national developmental regulations, emerging organized
Correspondence to :
retail industry, governments including export supported by availability of funds for new projects as
N. AMIRTHALINGAM
Department of Agricultural well as for easy financing for perspective poultry farmers. In South India, Tamil Nadu state is leading
Economics, Annamalai in broiler integration in the country which has Coimbatore as a major poultry pocket. In Namakkal
University, CHIDAMBARAM, district, while the demand for egg and chicken meat is increasingly commendably, poultry farmers here
(T.N.) INDIA are forced to restrict their expansion processes owing to escalating land and construction costs over
Email : amir09020@
gmail.com the last five years in Namakkal Zone. However, the various challenges, threats and weakness of the
sector including: diseases, high feed cost, poor marketing infrastructure, regional imbalances in
production, among others should be diligently addressed and the strengths of the sector well exploited
so as to harness the opportunities. Otherwise, the poultry sector offers a bright future. A future right
in our hands to shape.
KEY WORDS : Poultry, Poultry industry, Marketing, Challenges
Paper History :
Received : 17.02.2017; HOW TO CITE THIS PAPER : Amirthalingam, N., Priyanga, M. and Devi, K. Sita (2017). An economic analysis
Revised : 12.07.2017; of challenges and feasibility of poultry industry in Tamil Nadu. Internat. Res. J. Agric. Eco. & Stat., 8 (2) : 264-
Accepted : 25.07.2017 270, DOI : 10.15740/HAS/IRJAES/8.2/264-270.

INTRODUCTION : to 2017” portrays the current and future scenario of the

poultry industry in the country. From the company’s
India has always been known for its primarily analysis, it is anticipated that the poultry industry will grow
agrarian economy, though now it has gradually shifted at a CAGR of around 10 per cent during 2012-13 to 2016-
towards industrial economy. With a majority population 17. While preparing the report, RNCOS comprehensively
of the country still dependent on agriculture and allied covered the growth prospects of the broiler meat and
activities, there is huge scope for industries like the poultry egg industry. Statistically, the report covers production
industry to expand and improve to become a profitable trends of broiler, broiler meat, layers and eggs. It also
sector in the coming years. Poultry sector in India has provides forecasts of the meat and eggs industry till 2016-
been extremely beneficial for the common masses and 17. The research report, spread over around 75 pages,
has also contributed to earning foreign exchange through offers a well-framed picture of poultry industry dynamics,
exports. essential to get a grasp of the market nerve.
RNCOS’ report, “Indian Poultry Industry Outlook India has 1.23 billion people and the number is

HIND AGRICULTURAL RESEARCH AND TRAINING INSTITUTE

 N. AMIRTHALINGAM, M. PRIYANGA AND K. SITA DEVI

growing every year. The focus is on “Development” units with million birds and 100,000 birds in one house
meaning good food, better health and living conditions to are coming up. Some 70 per cent of the layer birds were
everyone. People spend more money on food when they in the states of Andhra Pradesh, Tamil Nadu and
earn more. Healthy food at attractive price will be the Maharashtra and Karnataka in south and only Punjab in
issue in focus. Eggs and chicken are accepted by all the north. The eggs were transported to other states.
communities and are available at the most reasonable More production units are coming up in Uttar Pradesh,
prices. Within a span of 25 years, the egg production has West Bengal and Bihar now. North-Eastern states are
gone upto 70 billion from few millions and the broiler planning production units to get fresh eggs at more
production has gone to 3.8 million tonne from nowhere. reasonable costs saving time and money on transport.
Poultry is the most organized sector in animal agriculture, Over all, Tamil Nadu counts for maximum egg
worth rupees one lakh crores. The country has exported production. In Andhra Pradesh, Hyderabad is the city
6, 59,304.15 MT of poultry products to the world for the with maximum poultry and hatcheries. Besides the state
worth of Rs. 768.72 crores during the year 2015-16. of Andhra Pradesh, Vishakhapatnam, Chittoor,
Major export destinations are Oman, Saudi Arabia, Japan, Karnataka, Tamil Nadu, Maharashtra, Gujarat, Madhya
Germany and Maldives. Pradesh, Orissa and North Eastern states are the major
India is emerging as the world’s second largest egg contributors.
poultry market with an annual growth of more than 14 The Tamil Nadu government is planning to
per cent, producing 61 million tonnes or 3.6 per cent of promote poultry clusters in seven backward and non-
global egg production. The annual growth rate of egg poultry regions in the state, in a bid to encourage more
production is 5-8 per cent. Apart from this, India ranks small and medium farmers in the state to take up poultry.
6th in broiler production (125 billion rupees) with an annual Animal husbandry is a rapidly expanding sector in Tamil
output of 2.39 million tonnes of broiler meat, as per the Nadu, playing a significant role in the rural economy by
estimates of the Ministry of Agriculture, Govt. of India. providing employment to a large number of small and
The total poultry industry is valued at about 350 billion marginal farmers and landless agricultural labourers and
rupees. The per capita consumption per year is approx raising their economic status. Livestock is an important
2.4 kg, which is much lower than the National Institute resource next only to family labour for landless agricultural
of Nutrition’s recommendations of 1.1 kg. labourers, it being their only major asset.
India is the third-largest egg producer after China Presently poultry farming on a commercial scale is
and USA and the fourth-largest chicken producer after mostly practiced in the western parts of the state, with
China, Brazil and USA. The per capita eggs consumption Namakkal having developed into an egg-laying belt and
has gone up from 30 to 68 and the chicken from 400 g to the Palladam region into a hub for broilers. However,
2.5 kg. Human nutritionists recommend 180 eggs and 10 there is good potential for poultry development in other
kg chicken per year. Most of the countries consume over parts of the state, the department says.Since the poultry
240 eggs and 20 kg of chicken. There is scope for industry is restricted to the western belt of the state, the
enhancing the production. Production is getting more Tamil Nadu government has launched a scheme to
organized and move ahead of consumption resulting in develop poultry clusters in the non-poultry, backward
optimum prices and with minimum profits. regions of the state at a total cost of Rs. 22.35 crore.The
To assess the competition in the country’s poultry present study was attempted in Tamil Nadu poultry
industry, we have profiled key industry players like industries with the following objectives: 1.to explore the
Venkys, Skylark, Suguna, SKM, Simran, Kegg farms, scenario of the poultry sector on India and Tamil Nadu.
IBG, Amrit Group etc. This helped in analyzing the 2. to carry out a SWOT analysis of the poultry sector. 3.
strategies of the big companies which are proving to study the problem faced by poultry industry.
successful in the poultry industry despite the various
challenges faced. The size of their business, level of
integration, production capacity, branding and marketing MATERIALS AND METHODS :
techniques, focus on R and D etc, have been described The study was based on secondary data. The
in detail. information collected through a review of various poultry
The small layer units are becoming unviable. Large literature sources, website, books, journals, reports and
265 Internat. Res. J. Agric. Eco.& Stat., 8 (2) Sept., 2017 : 264-270
HIND AGRICULTURAL RESEARCH AND TRAINING INSTITUTE
 AN ECONOMIC ANALYSIS OF CHALLENGES & FEASIBILITY OF POULTRY INDUSTRY

publications. is one of the most concentrated in India. There has been

a continuous rise in the Indian poultry production. The
total of broiler production during 1997 was approximately
RESULTS AND DATA ANALYSIS : 820 MT and was projected to be approximately 1250
The results obtained from the present investigation MT in 1999. During 2000 was suddenly raise in the Indian
as well as relevant discussion have been summarized poultry production and total production raised following
under following heads : years 2000 to 2016 and during the year 2016 was 4200
MT. Broiler production represents the biggest share of
Poultry sector : India and Tamil Nadu : share of produced, accounting for 87 per cent of India
Broiler production is a major portion of poultry broiler meat production (Fig.1).
production and the most dynamic livestock sector. This The state wise broiler placements in India 2012-

y= 131.5x
Source: Index M undi R2 = 0.935
4500
4000
3500
Production (MT)

3000
2500
2000
1500
1000
500
0
1990

1998
1999

2011
2012

2016
2000
2001

2005
2006

2010
2004

2008

2015
1991

1993
1994

1995
1996
1997

2002

2003

2007

2009

2013

2014
1992

Source: Index mundi Year

Fig. 1 : India broiler (poultry) production

9
8
Average placement in million

7
6
5
4
3
2
1
0
Assam
West Bengal

Uttarakhand
Karnataka

Maharashtra

Rajasthan
Odisha

Chattisgarh
Punjab

Bihar
Kerala

AP

Others
J&K
Gujarat

MP

HP
Up
TN

Region
Source: CLFMA of India

Fig. 2 : Broiler placements in India 2012-13

Internat. Res. J. Agric. Eco.& Stat., 8 (2) Sept., 2017 : 264-270

HIND AGRICULTURAL RESEARCH AND TRAINING INSTITUTE
266
 N. AMIRTHALINGAM, M. PRIYANGA AND K. SITA DEVI

2013, Tamil Nadu were the first broiler placements in Nadu highest poultry population is Namakkal district was
India is 8.12 million. Remaining the state were no broiler 42400952 Nos in Tamil Nadu, Namakkal district while
placement in India blow the 7.00 million (Fig.2). the demand for egg and chicken meat is increasingly and
The state wise layer populations in India in million the poultry population also. Followed by second highest
tonnes, Andhra were the first place of the layer population poultry population in the district is Coimbatore. Very
is 77 millions and followed by the Tamil Nadu is 44 millions lowest poultry population is district was Virudhunagar
the second place (Fig. 3). followed by the Nagapattinam, Pudhukottai (Fig. 4).
Various districts wise poultry population in Tamil Various districts wise egg production in Tamil Nadu.

90
80
70
Populatio (Millions)

60
50
40
30
20
10
0
Maharashtra

Assam
West Bengal

Uttarakhand
Karnataka

Rajasthan
Odisha

Chattisgarh
Punjab

Bihar
Kerala

AP

Others
J&K
Gujarat

MP

HP
Up
TN

Region
Source: CLFMA of India

Fig. 3 : Layer population in India

40000000

35000000

30000000
Total (number)

25000000

20000000

15000000

10000000

5000000

0
Tiruvannamalai
Thiruvallur

Tiruchirappalli

Kanniyakumari
Virudhunagar
Chennai

Nagapattinam
Coimbatore
Krishnagiri
Namakkal
Villupuram

Tirunelveli
Pudukkottai
Perambalur

Dindigul
Madurai

District
Source: Department of animal husbandry and veterinary services, Chennai

Fig. 4 : District wise poultry population 2013-14

267 Internat. Res. J. Agric. Eco.& Stat., 8 (2) Sept., 2017 : 264-270
HIND AGRICULTURAL RESEARCH AND TRAINING INSTITUTE
 AN ECONOMIC ANALYSIS OF CHALLENGES & FEASIBILITY OF POULTRY INDUSTRY

120000

100000
Production (in lakhs numbers)

80000

60000

40000

20000

Namakkal

Thirruvannamalai
Pudukkottai

Thoothukkudi
Cuddalore

Kancheepuram
Ariyalur

Thanjavur
Madurai

Theni
Salem
Karur
Dindigul

Villupuram
Tirunelveli

Tiruppur
District
Source: Department of animal husbandry and veterinary services, Chennai

Fig. 5 : District wise egg population 2013-14

Tamil Nadu ranks second in the countries egg production gaps.

with a production of 10.8 billon eggs. Namakkal district
while the demand for the highest egg production is Weakness :
110910.76 in lakh numbers (Fig.5). – Local breeds have low productivity in terms of
egg production and weight gain due to genetic limitations.
Swot analysis of the poultry industry strengths : – Feeds are costly and their availability and quality
– Availability of fresh, chilled chicken in different fluctuates seasonally.
forms such as de-boned, cut-ups, ready to cook, ready to – Constraints in access to finance. This is an acute
eat etc. challenge especially for tha smaller scale commercial
– With greater promotion frozen segment has high farmers.
potentiality. This will widen the scope for end-products – Less awareness of local rearers about technologies
and lower the prices. and bird diseases.
– Rationalized pricing of breeder and commercial
stock. Opportunities :
– Entry of bigger players and retail giants will give – Government policies relating to investments in
fillip to poultry industry. poultry and ancillary industries, taxation, import duties,
– Increasing outreach of financing institutions will excise levies are positive.
encourage the rural areas to increase – Consumer awareness, perception and
their production capacity. acceptability of eggs and chicken as healthy food are
– More marketing efforts will increase the increasing.
availability of products to newer consumption centers. – Indian eggs are cheapest in the world market 50
– Establishment of newer markets will reduce the cents a kg.
pressure on existing markets. – The cost of production of both eggs and chicken
– Marketing branded egg in consumer packs would meat in India is less than the international prices. Thus it
bring value addition and promote consumption. can get the chance of establishing itself in the world
– Industry ability to operate on even lower margins, market.
bigger volumes, narrowing the farmer-to-consumer price – The productivity is also as per USA (305 eggs per
Internat. Res. J. Agric. Eco.& Stat., 8 (2) Sept., 2017 : 264-270
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 N. AMIRTHALINGAM, M. PRIYANGA AND K. SITA DEVI

bird per year). In Namakkal region of Tamil Nadu it is of international market. Lack of adequate cold storage,
300 per bird per year. ware houses is the major factor affecting poultry sector
– Maximizing of production to take advantage of in India.
economies of scale. – Majority of the production is by unorganized which
– Processing to add value to chicken products. is another threat faced by sector. Indian poultry is one
– Export potential to neighbouring provinces. sector which can contribute to growth with low
investment. In December it has attained a high growth in
Threats : egg and meat production, which puts Indian egg
– Poor infrastructure for export is hindering the production to be among top 5 in world. Indian poultry
export of poultry products. products are in demand and they can significantly to
– Many countries are protecting their poultry growth if the above shortages are overcome.
industry from foreign competition by protective measures – Consumer mindset largely prefers fresher produce
like restricting imports, keeping egg prices at lower level compared to packaged meat. Along with this, the lack of
etc. any comprehensive poultry processing parks in the
– Lack of FDI in India in this sector and very less country makes packaged and processed meat a niche
number of state of art processing plants and post harvest market.
technology are available. – The emphasis on subsidizing grains has led to a
– Flooding the market with cheap imports. recent development of ‘protein inflation’ where
– Failure by authorities to enforce quality standards investment costs for businesses are high, therefore,
in feeds production. driving prices up. The volatility of the market and a lack
– High feed ingredient prices. of technology for a majority of traders leads to frequent
– Unavailability of breed, lack of integration, no link outbreaks or deaths due to various factors (insufficient
between consumer demand and need and leakage value supplementation, temperature fluctuations).
are some limiting factors of poultry today.
– Stiff competition from Sri Lanka, Pakistan, Brazil Conclusion :
and France, all these countries provide subsidies, export The poultry industry has emerged as the faster
incentives to exporters and keep their price low. growing segment of the livestock sector both globally
and India due to a number of favourable reasons. The
Problem faced by poultry industry: social, cultural and economic importance that poultry
– There is disparity between states and hence an offers in supporting livelihoods and contributing to national
impairment in growth of the sector. About 60 and of the GDPs, the future growth and promotion of the poultry
egg production comes from Andhra Pradesh. Commercial industry should be enhanced. Looking at the present
poultry farming yet to make a mark in states like Odisha, scenario and advances, made in the field of poultry
Bihar, MP and Rajasthan. This disparity has resulted in breeding for economic purposes, the future geneticists
uncertainty in sector. and breeders would have to search out alternate breeding
– Recent heat waves in Andhra Pradesh and strategies. The production and marketing of poultry
Telangana region has resulted in high chicken prices due products in India expected to double the progress in the
to killing of birds. As a result poultry feed demand has next fours. The exportable poultry products must meet
fallen. prescribed quality requirements, which are internationally
– Shortage of raw material is another issue. Price recognized and accepted on large scale. Chicken
of soybean meal, the major and only source of protein represents the biggest share of poultry produced. The
has increased about 75 per cent, which has forced the challenges affecting the sector should be addressed on a
feed manufacturers to comprise in terms of diet given to case to case basis. The exportable poultry products must
birds. meet prescribed quality requirements, which are
– Shortage of human resources is another problem internationally recognized and accepted on a large scale.
because of the absence of veterinarians, researchers, in The sector offers a bright future. A future right in our
areas where expertise knowledge is required. hands to shape.
– Indian poultry sector is still unable to tap the benefit

269 Internat. Res. J. Agric. Eco.& Stat., 8 (2) Sept., 2017 : 264-270
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 AN ECONOMIC ANALYSIS OF CHALLENGES & FEASIBILITY OF POULTRY INDUSTRY

Authors’ affiliations: Development Authority (APEDA) (2014). Ministry of

M. PRIYANGA AND K. SITA DEVI, Department of Agricultural Commerce and Industry, Government of India. Retrieved
Economics, Annamalai University, CHIDAMBARAM, (T.N.) INDIA March 26, 2014 from:http://www.apeda.gov.in/
apedawebsite/SubHead_Products/Poultry_Products.
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opportunities and challenges in poultry sector in global Chennai, www.tanuvas.tn.nic.in/.
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Vijayakumar, E.P. and Ramamoorthy,V. (2012). A study on Retrieved April 11, 2014 from www.poultrytrends.com.
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www.rncos.com/Market.../Indian-Poultry-Industry-Outlook-
WEBLIOGRAPHY to-2017-IM621.html.
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