Community Broiler Farming : Making Poor Participate in Poultry Growth

Presentation Outline

Context : Opportunity for Escaping Poverty Poultry Sector : Growth & Opportunities Business Concept

Small-holder Poultry Model : De-risking Family Poultry Primary Aggregation as Cooperative Co-creating Growth and Success – the institutional

model

PRADAN’s Experience and Plans

Business Concept

Business Opportunity Table bird market

Large domestic mkt - 2.1 m tonnes live weight consumed now, YoY growth of 12 %, fourth largest worldwide, competitive cf. USA, Brazil, high income elasticity – meat of first choice

Labour efficiency key to Productivity – space for poor

Key constraints to participation of Poor Entry barriers - technology, scale of operations, investments Priorities

misplaced in govt. sector - scavenging, niche-game birds peg onto urban consumption focus on urban/peri-urban natural –

large farm size

Poultry - the big OpportunityHow Poor can Cash-in ? By taking up small-holder poultry which is

technologically similar to industrial poultry not the traditional scavenging poultry

And by working to augment the advantages of smaller

decentralised units like better efficiency, faster and better disease control

by working to reduce the disadvantages of small units in procurement of inputs and sale of birds, bridging the technology and scale imperatives

Continue.....

Production Technology Advantages for Poor no big difference in big & small farmer adaptable to scaling down significant labour component

Intervention : the institutional model Right sizing the unit : risk, return, investment Technology : adapting the best for high performance Market : focus on under-served Faith in Abilities of Poor

Community Owned Rural Poultry Enterprise Model

Insulate the families from price fluctuations and supply uncertainties of the market,

Strengthening the production system through improved market access, better capital management, and high quality production services and technical handholding.

The community poultry model focuses on Tribal and Dalit women’s induction in the activity Organizing them into collectives Creating system and processes to attain industry-competitive

production and scale efficiencies.

Design Features

Rapid Assessment in a New Area

Socio-technical Feasibility

Livelihood Portfolio, Road+Water Access,

Prevailing wage rate & opportunity – RPD

Market-financial Feasibility

Market - Deficit & Latent, Competition, Input Supply, Margin per bird/kg – Unit size

……… Design Features

Selecting the ‘right’ Farmers proxy indicators designed on empirical evidence Self-selection during training

Training & Skilling-up No-stipend experiential training Focus on logic and nuances in husbandry

Infrastructure Accessible and individual ownership Decentralised all-in-all out sheds breaking horizontal

spread

…….. Design Features

Production & Technical Support Clusters of 25-30 producers Trained para-vet in each cluster chosen from producers Village store in cluster for door step delivery of inputs Para-vet (Supervisor) paid on output Centralized Production Scheduling, DOC Placement,

Variance Monitoring, Ready Bird Marketing System Staggered production schedule -optimizes w/k Multi-layer disinfection and bio-security measures 5-7 batches in a year,effective working : 3-4 hr/day

Design Features continue…..

Risk Mitigation Delinking Production & Enterprise Efficiency Mechanism to absorb effect of price fluctuations Discriminate between good & bad production performance

Ensuring Industry Competitive Production Costs : Grower Payment linked to Efficiency

Critical Production Parameters in Broiler Farming: Feed Conversion Ratio (FCR) Avg. Body Wt (kg) Livability (%) No of Days

Livability(%) X Avg Body Wt(Kg)

Efficiency Index=-------------------------------------------- X100

F.C.R X No of Days

Called as “EI system”

………… Design Features

Marketing Single window centralized marketing Producer owned delivery system Warehouses in big markets Establishing Retail network Target 40-50 % market share within 200 kms. radius

………..Design Features

Finance Capital Investments- Targeted at self-employmentWorking Capital- Seed fund to collective and further from bank

Governance Mutually Aided Cooperative Professional Management Governing Board with outside membership

Cooperative(300-400 producers)

Central accounts, input supply, marketing

Wholesalers Supervisors

(20-30 producers)Inputs distbn, production support

Small Producers (400-700 birds)

Family Level

Income Rs.75-100/day for 200 days p.a. Rs.15,000-20,000 p.a.

Small Holder Broiler Farming Model

Retail outlets

Producer Collective

Turnover : 4-5 crore

Producer Margin : 45-50 Lakh

Unit Cost : Rs.52500 per family Rs.30000 for capital asset +

Rs.15000 for w/k Rs.2000 for capacity building Rs.5500 for institution building (incldg.

Infra + external support)

Kesla Poultry Cooperative1st small-holder broiler producers cooperative

Background PRADAN started broiler farming in 1993 Activity organized on cooperative lines in 1997 and registered in 2001Achievements 618 tribal/dalit women broiler farmers – 50 % promoted under mainstream

poverty alleviation programs Cooperative is the commercial largest farm-production house in Madhya

Pradesh FY 2008-09 - Turnover 104 million

Producer payments Rs.14.0 million FY 2009-10 – Turnover 137.63 million turnover

Producer payments Rs.15.5 million Growth Nucleus : Kesla tribal belt monthly DOC placement increased from

8,000 in 1993 to 4.0 lakh in 2010 is now counted as one of important broiler centres of Central India

Operations Overview

Largest Broiler Production Houses in Jharkhand, Madhya Pradesh Spawned sectoral growth in its

operational area Demonstrated relevance as

income generation programme for resource poor (landless) families in the Central Indian Poverty Region

Demonstrated that small-holder broiler can succeed & thrive one of larger integrations in India entirely owned by tribal & dalit women

Recognised for better-than-industry productivity

Mkt Leaders

Small

• Experience : demonstrated scalability & sustainability in varied setting

• setting new coops, tapping markets, productivity, success in presence of integrated farms

• Key Drivers : (i) better productivity & cost of production; (ii) effective tapping of local small dispersed markets

• Potential Size & Growth of Market

• Key constraints : supplies - vertical integration investments

Scalability & Sustainability

Year 1997 2001 2003 2007 2010

Producers 150 220 400 3200 7000

Cooperative 0 1 2 12 19

Federation 0 0 0 1 2

Industry Features

slump   slump, integrators

bird flu, disappearing small farm

vertical coordinated

Social Impact

Target Clients : Women from tribal & dalit families, average household income of Rs. 20,000 p.a., deficit at household Rs. 3,000-5,000 p.a.

Business Intervention : 75 % increase in annual income, family becomes

net surplus and starts investing in land, education, health etc.

Helps women stay back – restoring family/social life – particularly children and their education

Improved farm production – enhancing food sufficiency

Growth Projections

Next 3-5 years : Break into top 10 broilers

producers in India – 5 fold growth in 5 years

Generate income in hands of poor families to the tune of Rs. 20 crore Consolidate and strengthen

presence in the existing areas Establish an institutional

architecture (national trust, private businesses), systems & processes which will lead growth

Expand to new areas – Bihar, Assam, West Bengal

amount in m INR

 2008-09

2009-10

2010-11

2011-2012

Producers 5300 7000 9000 12000

Turnover(mRs.) 650 1000 1350 1800

Margin (mRs.) 78 120 162 216

Community Poultry : Institutional Model

Co-operative Society

Individual Members of the Co-operative Society

Co-operative Society

Co-operative Society

State Level Federation of Member Co-operatives

State Level Federation of Member Co-operatives

- Governance Support- Statutory compliances

- Governance Support- Statutory compliances

- Quality Feed- Technical Support - Management Support

- Quality Feed- Technical Support - Management Support

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National Small-holder Poultry Development Trust

National Small-holder Poultry Development Trust

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- Organization Development- Business Support- Organization Development- Business Support

- Origination &handholding- Mobilise investments - Origination &handholding- Mobilise investments

In next 10 years “50,000 farmers of an average unit size of 800 sq ft produce annually 200 million live birds valued at Rs. 15 billion (Rs.1500 crore) generating Rs.1 billion (Rs.100 Crore) in the hands of the farmers and Rs.200 million (Rs.20 crore) additional income in the hand of community workers, support and professional staff. These 50,000 farmers are organized in 100 primary producer organizations making it the largest family poultry initiative in the world and in top five broiler producers in India with a gross turnover including of its associates being Rs. 2000 crore”

Community Poultry: Mission & Scope

THANKS