Poultry sector suffers 22,000 crore loss due to Covid-19
The Covid-19 pandemic has hit the country’s livestock sector hard, with lockdowns impacting demand. In an interview with Activity area, Neeraj Kumar Srivastava, President of CLFMA India, talks about the main challenges facing the sector and how to overcome them to increase industry incomes and farmers profitability. Extracts:
How has the pandemic affected the livestock sector?
Even before India reported the first case of Covid-19, rumors of poultry birds as likely carriers of the virus started circulating on social media, drastically reducing demand for chicken meat in several parts of the country. in February-March 2020 and poultry prices crashed to â¹ 4.5 per kg.
Government interventions and industry awareness campaigns had improved the situation. Even as it took hold, the market collapsed again due to fears of bird flu in January. This was followed by a sharp increase in soybean meal prices of over 175 percent, severely affecting farmers’ profitability.
The estimated loss of the poultry industry alone due to the impact of Covid-19 and associated lockdowns is over 22,000 crore.
Due to the pandemic, the poultry industry grew only 2-3% in FY20 (vs. an average annual growth rate of 7-8%) and a decline of 4-5 % during the year 21.
Industry is only expected to touch pre-Covid demand levels by the end of FY22, provided Covid-related restrictions are relaxed and institutional demand rebounds. Institutional consumption contributes more than 50 percent of total demand.
The $ 14 billion dairy industry also suffered a 25 to 30 percent drop in demand. The bulk segment once contributed around 15 percent of overall milk consumption.
With regard to the aquaculture sector, the pandemic caused a drop of 7.4% in quantity and exports were severely affected.
What are the demand prospects for the feed sector in the next 2-3 years?
The outlook for demand looks excellent for the next 2-3 years. A recent survey by the Indian Bureau of Market Research suggests that the protein deficiency among the people of the country exceeds 80%. Over 135 crore people need around 25-30 million tons of protein. Livestock provide 47 to 56 percent of protein and 20 percent of energy requirements and play an important role in meeting protein and energy requirements.
India still has very low meat consumption. At 4.5 kg per capita, it is very low compared to 70-90 kg in developed economies. The increase in disposable income will stimulate protein intake and a majority of this will come from livestock products.
There seems to be a change in purchasing behavior and consumption of poultry products? What are the contours of the change?
Currently, about 92 percent of poultry products are sold through unorganized markets and retail outlets. The remaining 8 percent of the products are sold through branded retail outlets that process the products in processing centers on the outskirts of town. After Covid-19, the eating habits of urban consumers are changing dramatically and by 2025 we could see a 70:30 ratio between conventional stores and branded stores.
Online retailing of livestock products like meat, eggs and milk for home delivery will increase dramatically.
What are the major challenges facing the sector?
The gap between supply and demand for feed, feed and concentrates is a major challenge. This scarcity is attributed to increasing pressure on land for the cultivation of food grains, oilseeds and pulses and insufficient attention 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 disease outbreaks to be more frequent and biosecurity and management to be a key goal. The shortage of skilled labor and the low productivity of the dairy sector are also of concern.
What are your suggestions for overcoming these challenges and making the sector resilient?
We need to increase forage and grain production with efficient use of available land and forest areas. We should also be deploying technology, precision farming to increase yields on every available farm. We should also find more efficient ways of producing meat and introduce efficient feeding programs for livestock.
We should also restrict the use of food crops for biofuels and evaluate and allow genetically modified grains to increase productivity per acre. We should focus on research – especially on how to provide optimal nutrition that results in minimal excretion or release of nutrients.
What is the total opportunity for food stakeholders in the country? And why is a large part of the business still in the hands of unorganized actors?
The poultry and aquaculture industries are organized and mainly follow an “integration model” where there is a contract with several small farmers who raise the animals. The final products from these farms are then taken away by the integrators, either for direct sale or for slaughter and processing. The integrator assumes all of the market risk and the breeders are protected from market fluctuations by being paid fixed breeding costs.
The market is largely unorganized in ruminants. The organized feed segment produces around 10.9 tonnes of compound feed, which represents only 9% of the total concentrate requirements of the large ruminant population.
India steadily experiences an increase in productivity per animal through improved genetics, management and nutrition. There has been only 0.83% increase in cattle numbers and 1% increase in buffalo population over the past nine years. But, total milk production increased by 42 percent and availability per capita by 32 percent during the period. There has been a 40 percent increase in productivity per animal, but it remains small compared to average global productivity.
How did the Indian animal feed players behave in export? What is the opportunity there?
India’s exports of animal products amounted to 27,155.56 crore, including buffalo meat (23,460.38 crore), mutton / goat meat (330 crore), poultry products (435 crore) and dairy products (1,491.66 crore).
Currently we are exporting meat to over 64 countries and no outbreaks of foodborne infection have been reported in Indian shipments.
Despite enormous animal resources, we have never been able to realize its full potential in the meat industry due to its cultural perception and religious beliefs. It is high time that we seize this opportunity and simultaneously develop interdependent sectors such as leather and animal feed.
In the poultry and dairy industry, there is huge room for improvement and higher growth. The main concerns are the lack of appropriate infrastructure and qualified human resources. An integral approach is needed for the development of improved cold chain facilities for storage and transport.
In addition, the country needs to focus more on value-added products with improved shelf life and better packaging in order to compete in the international trade market.
We must formulate policies to promote our brands on the international market.