IV. Data and Survey

Empirical investigation of the hypotheses in the study is complicated by the poor availability of data. Very little reliable data on the Indian poultry sector is available from government and industry sources. Available government data consist of only periodic poultry population estimates, with the most recent estimates based on 1997 livestock census. Trade associations, including the Poultry Federation of India, do not compile industry-wide data either.

As a result, the study must rely on primary data. Therefore, it was decided that relevant data would be assembled through an intensive sample survey in the two states of India Andhra Pradesh and Haryana (See Figure 4.1), where the poultry industry has grown rapidly during the last two or three decades.

A copy of a sample questionnaire is provided in Annex 1. The sample size was fixed at 160 sample households/units in each of the two sample locations. Before discussing sample composition, this chapter will look briefly at the poultry industry in Andhra Pradesh and Haryana.

4.1 Location of Sample and Its Characteristics

4.1.1 Andhra Pradesh

Andhra Pradesh, an area of 1275 lakh sq. kms., is India's fifth largest state and is located in the South East part of the country. The state has a population of 757.28 lakhs as per the 2001 census. Andhra Pradesh's urban population accounts for 27.1 percent of the state's total population and is spread out in 210 towns and urban conglomerations. The rural population, 27.9 percent of total population, resides in 28,123 villages across the state. The Net State Domestic Product is estimated at Rs. 50,679 crores and per capita income at Rs. 7,155, based on 1999-2000 prices. Agriculture contributes 40percent of the state's income, while industry and services contribute 17 percent and 43 percent, respectively.

Andhra Pradesh leads India in the production of eggs and broilers (5.8 billion eggs and 140 million broilers in 1997-98). Total poultry population as per the 1999 livestock census is 65.53 million. Table 4.1 displays the distribution of the poultry population across various districts in the state, as of 1999. There are, as per available information, 7,000 poultry farms in the state, and most of those (about 80 %) are commercial farms with more than 10,000 birds.^[62]

4.1.2 Haryana

Haryana, an area of 44,212 lakh sq. kms., is a relatively small state located in the northern part of India. The state has a population of 194.2 lakhs as per the 2001 census. The Net State Domestic Product is estimated at Rs.7,545 crores and per capita income at Rs. 3,997 in 1997-98 (at 1980-81 prices).

The state ranked 10^th in egg production (637 million eggs in 1997-98). Table 4.2 provides some salient features of the poultry population in Haryana by district. One can see from looking at column 3 of the table that the poultry population is high in three districts - Panchakula, Karnal and Jind. Within these districts, there are high concentration areas and low concentration areas. While selecting the sample, however, care was taken to ensure a fair distribution of the sample between high and low concentration areas.

4.2 Sample Size and Composition

It should be borne in mind that in India no census of poultry farms has ever been conducted. Hence selecting a sample without adequate information on the population of poultry farms has been difficult. In order to overcome this difficulty a multi-pronged approach was sought. First, a directory listing the names and addresses of the poultry farms (especially for Haryana) was consulted, even though the information in the directory was old and did not contain the names of new entrants. Second, institutions such as the National Egg Coordination Council, which kept records of its members, were consulted. Third, integrators helped to provide lists of poultry farms in their respective areas. All of this information was pooled, which enabled researchers to gain an approximate idea of the size of the poultry population in the two survey locations. Next, using their subjective judgment, while at the same time leaving enough scope to capture diverse characteristics of poultry units such as nearness to urban/rural areas or main road/kutcha road, researchers drew an adequate number of sample observations - 160 each in Andhra Pradesh and Haryana. Details of this sample include the number of broiler or layer farms in the two states and are shown in Table 4.3.

4.3 Timing and Extent of Surveys

The field survey was carried out in Andhra Pradesh and Haryana during October - December 2002. The data originating from the survey was checked and cross-checked for consistency, and the farms where gaps or inconsistencies were found were revisited in January 2003 in order to fill those gaps.

4.4 Problems Encountered

Several problems were encountered during the survey, and some of the important ones are described below.

First, as already cited in the preceding section, there is no up-to-date, comprehensive list of poultry units in the two states as no census of poultry farms has ever been conducted in India. The Animal Husbandry Division that poultry comes under does not maintain any systematic data on poultry units, even though poultry has now emerged as a significant commercial activity in India. Even the National Egg Coordination Council (NECC) and the Poultry Federation do not have complete lists of poultry units. Thus drawing a representative sample has been difficult.

Second, most farmers that were administered detailed questionnaire schedules were found to be keeping improper records of farm management details, and, in most cases, gave answers from memory. Hence the data collected from the survey is to be taken only as approximate data.

Third, somewhat different data collection methods were used in Andhra Pradesh and Haryana. In addition, the teams for the two locations were different, and different languages are spoken in the two regions - Telegu in Andhra Pradesh and Hindi in Haryana. Thus many problems were encountered. For example, in the schedulescollected from Haryana egg production is stated on a monthly basis, while in Andhra Pradesh it is stated in terms of percentage of laying and its duration.

Fourth, information on capital investment reported in the questionnaire schedules is highly misleading, as poultry owners generally acquire much more land than is required for the poultry unit. In India, land is not treated merely as an income-yielding asset, and it has high appreciation values, particularly in the vicinity of urban areas. When poultry owners take out an institutional loan for capital investment, their land is shown as a share of that investment. It is more appropriate to consider only the costs of buildings, machinery and equipment - and not the land - as capital investments in the unit.

Fifth, the origin of the feed procured by the farmers could not be properly obtained. For example, maize used for feed comes from Maharashtra or North Telengana, and there are three or four places of procurement for each feed ingredient. Yet the respondents only indicated the market where they procured the feed.

4.5 Why the Sample is Representative

The survey sample is representative of the two states in India - Andhra Pradesh and Haryana - where commercialisation of poultry has come a long way, where the industrialization of poultry farming has been expanding the scale of poultry operations. These two states can be considered as the states in India that have exhibited the greatest growth in poultry development to date, likely potential for future development and scales of activity.

4.6 How Data was Handled

As stated in a preceding section, the survey was conducted by two separate teams, one in Andhra Pradesh and another in Haryana. Both teams, which had separately assembled their data, worked together to merge the data. Also as stated earlier, there were many problems related to data collection as well as to the congruency of the data collected. Yet the two teams thoroughly checked and re-checked the data to ensure that the data sets were consistent.

4.7 Variables and Methodology for Estimation of Revenue, Cost, and Profit

Estimation of revenue, cost and profit per annum involves a complex procedure in the case of the poultry industry because of the differences in the production structure between layer and broiler units as well as the differences in the reference period used for different input items. The complexity will be less if only layer or broiler units are studied.

A layer unit, in general, consists of a number of batches in order to have a continuous flow of income. Data on output and most of the inputs are collected for only the latest completed batch, which makes up only a part of the unit. The size of the unit is expressed in terms of the total number of birds in all of the batches at a point of time. For instance, if a unit maintains three different batches of 10,000 birds each, the size of the unit is 30,000 birds. Each batch will be completed in about 72 weeks, or 17 months. There will be a gap of two to three weeks after the completion of the batch to clean and disinfect the sheds before commencing the next batch. The duration of the batch varies from 72 weeks to 80 weeks, depending on the production rate of eggs. The completion of all of the batches marks one cycle and it coincides with the duration of a batch.

The number of birds existing on the day of visit is not necessarily the correct indicator of the size of the unit, as some bird sheds may be vacant on that day after the completion of a batch and a new batch has not yet commenced. It is proper to use the information on the size of the unit when all batches are present on the farm. Since each unit has a gap at a different time, information on the current size of each unit is collected separately. The duration of a batch is about 72 weeks for a layer unit and about seven weeks in the case of a broiler unit. Annual estimates have to be derived for both types of units. Furthermore, the data available for a batch has to be multiplied for a cycle. The following method is used to derive the annual estimates for all of the broiler and layer units.

In order to derive the annual output of a layer unit from the output farm of batch, a multiplier is constructed as the product of two factors, one for converting the batch estimate (about 72 weeks) for one year and the other for converting the estimate for one batch to the estimate for the entire unit. If x is the duration of the batch (in weeks) and y (in weeks) is the gap between two batches, the first factor is 52/(x + y). For example, if the gap between two batches is two weeks and the duration of the batch is 72 weeks, the factor is 0.7027. The factor for converting the estimate of the batch for the estimate for the year is the ratio of the size of the unit to the size of the batch. If a layer unit of 10,000 birds has 2,500 layers in the latest completed batch, the second conversion factor becomes four. The multiplier for the above unit is 2.8108 (0.7027 x 4.0). Since broiler output is collected for all the batches maintained in a year, multiplier is unity for output. Certain input items, however, are collected for the latest batch and for these items the multiplier is the ratio of unit size to the size of the batch. Thus only one of the two factors of the multiplier for layers will be applicable for the broiler.

Revenue from a layer unit comes from eggs. As there is some spoilage of eggs, the value of eggs is based on the production of eggs minus the value of spoilage. A broiler unit produces, and brings in revenue from, meat and manure. Information on the quantity of these outputs and their corresponding prices is available. The value of manure is calculated as the total value of manure used either by the farm or by others and is valued at market price.

Data on inputs are collected for various reference periods. Information on some inputs, such as regular workers, is collected for the year and on other inputs, such as casual workers or feed, is instead collected for the batch. Information on feed is collected for different stages of the bird, and data on feed are available for the latest completed batch. On the other hand, expenditure data on electricity, water, telephone, and other items are available for the entire unit. Cost items are classified into two categories: those items representing the entire unit per year are taken as they are without applying any multiplier, and cost items representing the batch are converted to annual estimates for the entire unit using the multiplier. A list of important variables, including cost items for broilers and layers under these three categories, is provided in Annex 2.

Source: Government of Andhra Pradesh Livestock Census of Andhra Pradesh, 2000.

Source: Government of Haryana, Statistical Abstract of Haryana, 1998

Source of Data: Indian Poultry Survey, 2002.

Figure 4.1 Andhra Pradesh and Haryana: The Survey Location

(a) Map of Haryana

(b) Map of Andhra Pradesh