The figures of India related to animal food products are impressive. India is globally number one in dairy production, third biggest in egg producing and fourth largest broiler producer. But irrespective of these facts, India is facing major developments and challenges in the near future.
Today India experiences a tremendous growth of demand for dairy and animal products. These are caused by changing consumer habits leading to additional use of animal food products and due to governmental initiatives which emphases on increase of animal protein intake of its population. The growing trend in demand for animal protein products will simultaneously lead to additional demand of feed, fodder and additives, whereas on the other hand arable land becomes more scarce in India.
According to Cassidy et al. (2013); who studied crop allocations in terms of calories, protein and weights of 41 major crops combined; India currently directs 89% of produced crop calories to human food. This leaves very little room for animal feed production. The growing shortage of available arable land forces India to make the agricultural production more efficient and to be more efficient with its output. If not, prices will increase and food inflation will flourish.
The relevance of more efficient agriculture production is shown to the fact that the demand of compound feed consumption volumes will increase to 28 million tonnes by 2017-18, from the level of 20.3 million tonnes in 2012-13.
It resulted that India has recently emerged as one of the largest and fastest growing compound feed markets in the world. The feed industry is growing at a CAGR of 8%, with poultry, cattle and aqua feed sectors emerging as major growth drivers. Since Broiler feed is still the largest segment, it is interesting to take a closer look in this sector.
Raw material availability and fluctuating prices are already an issue here. Considering that about 1 kg of corn is required to produce 1 kg of broiler (based on FCR = 1.65 and 60% corn in feed), it means that, for broiler production only, and depending on the different forecasts, an additional 1 to 3 million tonnes of corn will be required in the coming years. According to various estimates, broiler meat production in India was less than 1 million tonnes in 2000 and has reached 3.4 million tonnes last year. This is an increase of 350% over the last 14 years. Different estimations have been given for the future. ASSOCHAM has stated that broiler meat production in India would reach 6 million tonnes in 2015, but a more conservative figure of 4.1 million by 2020 is given by ICRA.
Approximately 90% of the Indian broiler industry utilizes compound feed whereas rate of manufactured feed use in the layer industry varies from 5% to 25%. However, the overall poultry industry’s (broiler and layer) consumption of compound feed is only 55%, with home mixers fulfilling the remaining requirement. The feed consumption in this segment has been growing at the rate of 7 per cent to 8% over the last five years.
And also in the dairy industry robust growth numbers are registered. The requirement of cattle feed has gone up to 67 million tonnes. And although India is the world’s largest milk producer, the dairy feed industry remains highly unexplored and cattle feed comprises only 11% of the total feed industry. Another surprise factor in the compound feed industry is aqua feed, which has gained huge momentum in recent years. With Shrimp production registering a strong growth of 16%, feed consumption has also grown at 13% per annum in the past five years.
More and better feed will lead to good business for the sector. But in my opinion efficiency is key for sustainable development of the industry. This includes the before mentioned enhanced way of agricultural production, but more importantly integration with other value chain aspects which influences the animal food production:
- Animal health improvement, with a focus on prevention rather than on treatment. It will have positive impact on food adoption and digestion of feed.
- Genetic improvements based on Indian geographic and climatic conditions, resulting in better feed conversion.
- Significant investments in human capital, with a huge emphasis on practical knowledge of farmers and workers in the field. They need sufficient insights of implacable practices and an understanding how their input relates to other value chain aspects. Today a lot of available knowledge and expertise is not practically implemented.
- Advanced diagnostic improvements and insights to obtain better animal health standards, preventing disease outbreaks and eventually increase food safety. Currently the insufficient number of tests done in the animal husbandry and feed sector, resulting in unknown level of hormones, antibiotics and other residue eventually causing risk for human consumption and health.
- Increased industrialization and participation from organized players, ensuring production system efficiencies and improve food safety standards by food branding.
By truly integration of the animal feed sector into the other value chain aspects, there is a bright future ahead for India.
Marijn Leijten
Netherlands Agro, Food & Technology Centre (NAFTC) India
