The roadmap to developing India’s poultry processing

Alok Raj believes India has the potential to reach 50% processing with the right policies.

With the right policies, India could absorb 50% of its poultry into the organized processing sector in five years, and 80% in nine years, Alok Raj tells ZAHRAH IMTIAZ.

Alok Raj

For this to happen, government policies need to align with certain fundamentals, said Alok Raj, Director of Aptec Technology Consulting.

For starters, they must send out a message that at least 80% of wet markets or live poultry processing would be banned within a clearly defined and properly communicated timeframe.

“At the remaining 20% in wet markets, zoonotic diseases do not present a pandemic threat. And it allows for certain populations to continue their religious and social traditions,” Mr Raj told Asian Agribiz.

He explained that as integrators realize that they can no longer depend on live markets, they would invest more in processing. At around 37% compound annual rate of growth of processing capacity over five years, they would be able to reach 50% processing – given a 6% growth in the availability of live poultry over the same period. Thereafter growth capacity may slow down, to around 20%, to reach 80% processing in the next four years.

“Wet markets and un-branded unpackaged poultry are the Achilles heel in our food sector – all too easy for bio-terrorists to target,” he added.

Opening to more breeds

To do this, live poultry production should be made more efficient and capacity would have to initially increase by 25%. For this, pure line populations need to increase by 40%. The resulting growth in commercial flocks, Mr Raj said, can only be achieved by moving towards environmentally controlled (EC) sheds.

Table 1. The growth rates required to achieve 50% processing of poultry in India in five years and 80% in nine years (Note: one lakh equals to 100,000).

“In EC sheds you get bigger harvests, better feed conversion and better economy, both on capital and revenue accounts. Further, these sheds afford reasonable insulation from avian pandemics spread by migratory birds — a problem we face year after year in India,” he explained.

He said this would allow Vencobb and other breeds to perform better, instead of all breeds striving to fall back on inefficient open-shed performance benchmarks established by market leaders. With better performance, cost of production would also be lower, allowing for more competitive exports and less loss of national resources.

There is a two-year lag between planning growth and achieving it because it takes two generations of flocks to mature and perform. Because this phase lag was ignored in the Ministry of Agriculture’s Doubling Farm Income National Action Plan, their projection was crammed from five years into a brief three-year period, it failed spectacularly.

Raising revenue

The critical requirement for increasing farm income in this sector must begin with capital subsidies to support a move towards EC sheds, together with the wet market ban announcement, said Mr Raj.

Table 2. Employment potential and rate of growth of ‘hub and spoke’ model based on previous assumptions of growth in Table 1.

With the fallback of wet markets gone, integrators would be forced to compete, adding momentum to the industry. Subsidies would also encourage hatcheries to upgrade to single stage incubation. Improved feed milling would also be needed to match.

To be internationally competitive, poultry production must follow an industrial approach. Backyard poultry can co-exist, but in separate regions. A policy that compromises between both models will please neither.

‘Hub and spoke’ model

Once the production side is sorted, Mr Raj introduced his ‘hub and spoke’ model for meat processing activities.

A ‘hub’ is a large processing unit with a capacity of at least 6000 birds/hour, preferably operating two shifts, located in the rural hinterland. This unit would typically employ around 50-60 persons directly and would offer rural employment opportunities. Here, the birds would undergo primary processing and ship out large quantities of fresh chilled carcasses to ‘spokes’.

Live poultry markets in India slaughter meat in an unhygienic manner, increasing risk of zoonotic diseases.

For secondary processing, companies would set up ‘spokes’ or smaller processing units closer to the cities and more accessible to urban centers. Whole dressed broiler carcasses would be transported along the cold chain and further processed in these ‘spokes’ according to the demand for the day. This would result in better inventory management.

“This model would improve capital utilization, reduce pollution problems, increase urban employment, and cut down processing cost,” he said.

“Processors who follow this model will also be able to work together with partners to share the cost of investment. Further it will also be easier to upgrade into larger plants when the need arises.”

Related news:
India to overhaul wet markets to encourage meat processing
Online meat companies reviving old processing plants in India
E-commerce modernizes processing and retail for fresh meat

Editor, Asian Feed Magazine and FeedWatch, Colombo, Sri Lanka. The Russian-Ukraine war has intense implications on the world grain markets and Zahrah has her fingers on the pulse with articles like, ‘Wheat, corn markets shudder over Russia-Ukraine conflict’.