Tuesday, June 21, 2011

Untoward substitution

The use of grains like wheat, rice and bajra as poultry feed may put a question mark over the perennial issue of food security and unwanted shift in the cropping system of major production centres.

We are all bound to surpass the highest ever mark of wheat production during the current season, but inspite of much hue & cry in the market, government seems nonchalant over allowing the wheat exports. India's current food stocks stand at 27.8 million tonnes of rice, 31.4 million tonnes of wheat and 0.1 million tonnes of coarse grains, adding up to a food mountain twice as large as is required by official buffer stocking norms.

This has led to the steep plunge of the wheat prices not only below the government's promised minimum support price, but also the market price of maize. This resulted in the large scale use of wheat in poultry feeds in place of maize. As price is the first consideration in choosing any raw material for the production of any manufactured product, the suite followed for the poultry industry.

Maize and Wheat both are important components of poultry feed; but Maize has traditionally been in use, particularly in Indian conditions added to the same recent spike in the prices of the corns made it far from being used in the poultry feeds.

In addition to wheat, Bajra and other coarse grains and Soya are now being used as an ingredient of the poultry feed in the view of the maize price touching a high, which is proving detrimental for the steady growth of the poultry industry.

The poultry industry uses nearly 60% of India's corn production while the starch industry consumes around 25% ; the remaining grains are used as cattle feed and for human consumption. Poultry and cattle farmers are now opting for bajra and broken rice for feed which was being sold for Rs 11,000 a tonne.

“Wheat is available for as low as Rs 7.50 per kilo, compared to corn which is selling for not less than Rs 10 per kg due to demand from industrial users such as starch processors and exports”.

MSP and other production incentives made the wheat production cheaper, which is not the case with Maize and other crops. But private sector hybrids and its suitability to be grown in more than one season with extended growing season.

Since the private trade knows that the government would not allow exports, it is not entering the market. The government's own capacity to procure grains is limited outside the traditional procurement areas of Punjab and Haryana, making no sense of the concept of a minimum support price outside these privileged states.

The private sector has largely been kept aloof from the agricultural affairs in the country and never incentivized/ promoted by the union or state governments. Their considerable presence cannot be seen more than inputs domain. Supply side has been largely mismanaged by the public agencies like FCI, SFC, MMTC and other state level agencies.

Implications on Food security

With this unwanted diversion, the food security would be at stake, keeping in view the burgeoning population and money doled over the Wheat –Rice programmes in India. Since green revolution wheat has dominated the scene and patronised by almost everyone, from policy makers to the research fraternity with a blind eye towards other food crops, alike many of the millets and pulses which are in rich nutrition, can resist more adverse growing situations, with the engagements of least inputs and at lasts brings higher remuneration to the growers. Government’s skewed policies are largely to be blamed for the inequitable crop distribution, unsustainable growth and sorry state of agriculture.

The reason trotted out for not allowing exports, despite the fact that a large portion of the stocks are stacked in the open, in danger of being drenched in monsoon rains and spoilt beyond redemption, is that the government does not know how much of grain would be required to implement the proposed/ upcoming food security law.

So chicken will eat wheat this year! As prices stay depressed, farmers will switch from wheat to some other crop or just simply reduce acreage, come next sowing season. There could well be a shortage of wheat next year, thanks to policy that makes chickenfeed of wheat. This is most unfortunate. Blame it on the bureaucracy's refusal to take a decision. Domestic grain prices have plunged, thanks to bumper harvests, stocks far in excess of buffer stocking norms and a steadfast refusal to allow export of grain.

Superior grain wheat has become chicken feed in India, as low prices make it the best option for poultry farms that usually feed birds a mix of expensive corn and soyabean meal.

High moisture content in corn harvested in Bihar along with an increase in exports have been attributed as the main reasons for higher corn prices. Wide scale local availability of wheat grains also considered to be a point in its possible role in replacing the maize as an ingredient of poultry feeds.

Indian Poultry under simmering stress

Poultry industry is under stress due to multiple set of problems. They are barely able to survive despite decline in the feed prices due to the new found use of the other substitute grains of Wheat and Bajra in place of Maize.

During summer, farmers have to invariably use sprinklers and water coolers to keep birds cool. This not only requires additional expenditure, but also needs extra space, because of which production comes down leading to drop in supplies.

Rise in input cost and lower consumption due to summer season have resulted in poultry farmers barely recovering cost of production, as retail prices remain stagnant for the last few years.

India is the world’s fifth largest broiler producer with an estimated production of 2.3 million tonne per annum. However, there is a huge scope for growth of poultry industry as the country’s per capita consumption is only 2.4 kg per person per annum. Per capita consumption of broiler meat has grown at 10% in last 15 years”.

Road ahead

Corn supplies will start in a month or two from the states of Punjab and Himachal Pradesh and there is some hope of price correction with this. The rabi yield accounts for only 15 % to 20% of the total maize production in the country. However, it is important for the industry to keep a stock of one-to-three months.

The beleaguered industry has already asked the Centre to stop corn export to ensure stable prices. And as per industry estimation, if corn exports are discontinued, prices will fall by 5% to 10%, which can provide a sigh of relief to the poultry farmers and industry at large.

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