The Hindu Business Line : Integrated production, the new mantra

The positive correlation between economic growth and changing food habits on the one hand and growth of livestock sector and consumption of feed on the other is well established. No wonder, the growth of global feed market has been healthy in recent years, driven especially by burgeoning livestock industry in Asia. Interestingly, economic slowdown, animal disease outbreaks and uneasy conditions in commodity markets have not dampened the sentiment in the feed sector.

India has among the world’s highest livestock population, estimated at about 500 million with buffalo, goat and sheep ranked first, second and third respectively. The importance of the sector may be gauged from the fact that the livestock sector contributes to 4-5 per cent of the national GDP and a quarter of the agricultural GDP. Consider the impressive numbers – milk production in 2008 was about 104 million tonnes (the world’s highest with average annual growth of 4 per cent); well over 50 billion eggs, 45 million kg of wool and 2.3 million tonnes of meat.

Closely linked to agriculture and rural development, the sector provides employment to several millions in rural areas. Importantly, it contributes to the nutrition security of the country because it provides much needed proteins in human food. No wonder, Indian livestock, poultry and aqua feed industry has demonstrated robust growth in recent years in terms of both production and consumption.

Wide choice

Huge quantities of grains and protein meals are consumed as feed. The animal feed industry has a wide choice of utilising various cereals, millets, agricultural wastes, oilseed meals, fish/silkworm meal and other available local material to evolve formulations to meet the nutritional standards of animals. The feed consists of three major groups of substances: carbohydrates, oils and proteins together with smaller amounts of minerals and vitamins.

Although there is no dearth of feed quantities, there are issues with availability and prices. The supply of protein meals is tightening because of uncertain and sluggish domestic production growth of oilseeds. Corn / maize and soyabean meal are popular feed materials. Concerns over availability of feed have been raised. For instance, as against the current estimated demand of over 40 million tonnes protein meal, the availability is less than half. Specifically, soyameal use for poultry, currently estimated at 3 million tonnes, is forecast to double by 2015. In the Eleventh Plan, the growth target for livestock and fisheries has been placed at 5 per cent per annum each.

Tightening availability and volatile prices have resulted in suspect quality and encouraged rampant admixture of foreign matter and moisture. In order to enjoy economies of scale and address quality issues, integrated production has become the new mantra of the domestic livestock industry. In particular, the poultry industry is witness to setting up of integrated production facilities resulting in establishment of strong backward linkages, including production of feeds.

Growth drivers

In the case of animal feed, all the growth drivers are in place. For instance, milk output has been expanding at 4 per cent a year and demand for liquid milk is forecast to rise to 172 million tonnes by 2021-22. This, by itself, will create huge demand for feed. Ongoing efforts to improve the genetic make-up of cattle are sure to boost consumption demand for feed. Poultry and fisheries are set to grow by 5-10 per cent. No wonder, the sector provides attractive investment opportunities in not only breeding and animal health, but also in production of animal, poultry and aqua feeds.

The cooperative sector is in a vantage position to benefit from the growth potential of animal feed industry.

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