The Venky's Story

Poultry is being projected not just as a means of livelihood or as a business proposition, but also as an affordable nutritional alternative to millions of people. The industry is, however, still young and requires effective marketing to develop it. Efforts are not lacking, as is seen by the success of the country's largest poultry group, Venkateshwara Hatcheries. The late Dr. B.V. Rao, the founder of Venkateshwara Hatcheries, revolutionised the industry by bringing it on a par with the best global poultry producers. From an unorganised, erratic and undependable trade, the poultry industry was pitchforked into the big league, thanks to the efforts of Dr. Rao and now his daughter Anuradha Desai. They have the largest network of poultry farms and hatcheries in India.

Dr. Rao's foray into the poultry business began in the early 1960s. By 1969, he had operationalised the Venkateshwara Poultry Farm at Hyderabad. He contributed to making India's poultry market self-reliant by streamlining pure-line and breeder operations, vaccines and medicines, specific pathogen-free eggs, pellet feed mills, poultry processing, egg processing, microprocessor-controlled incubation systems and automatic feeding systems. Dr. Rao set up the National Egg Co-ordination Committee (NECC) and the National Broiler Co-operative Marketing Federation. He also set up the Institute of Poultry Management and Technology of India (IPMT) and the Poultry Diagnostic and Research Centre (PDRC), which have trained more than 1,300 entrepreneurs from India and other developing countries.
Within three decades of the company's operations, India rose to being the world's fifth largest producer of eggs and the 22nd largest producer of broilers. As a Rs.6 billion conglomerate, the VH group is Asia's largest fully integrated poultry group. It has a nationwide network of parent farms and hatcheries and its activities include the production of poultry feed, poultry feed supplements and soya cake for poultry feed.
Since its inception, the VH group has worked towards providing comprehensive veterinary support to farmers all over the country. The PDRC and the eight VH zonal laboratories located in regional poultry pockets, provide disease-monitoring and diagnostic services free of cost to all farmers irrespective of the breed they patronise. The PDRC at Loni near Pune, is the foremost bio-avian diagnostic and research laboratory. It is equipped with the latest sophisticated equipment to conduct disease-monitoring programmes on the virological, microbial and immunological aspects. It conducts in-depth research on various types of existing and emerging viral and bacterial diseases.
The Specific Pathogen Free or SPF egg is another of the group's initiatives in the country. These eggs provide reliable vaccines, thereby widening the safety net for millions of chickens. Nearly 12,000 eggs are exported to Indonesia, 1,500 to Saudi Arabia and 5,000 to Switzerland every week. The use of SPF eggs in the production of live virus vaccine in human and veterinary medicine is on the increase. SPF embryos and cell cultures derived from SPF eggs are in demand in virological research all over the world. Apart from vaccines to treat poultry disease, SPF eggs are used to manufacture poultry and human life-saving vaccines. Today India is one of the few major producers of SPF eggs.
The vaccine division of the group, which became operational in 1980, has a turnover of over Rs.170 million. The Indian poultry industry had suffered owing to the unavailability of quality vaccine, untimely deliveries and uncertain quality. To overcome these obstacles, the VH group set up an ultramodern vaccine plant called Ventri Biologicals near Pune. Backed by extensive and modern research and development facilities, Ventri Biologicals is constantly engaged in developing new-generation vaccines to combat emerging bacterial and viral diseases. It produces a wide range of live and inactivated vaccines conforming to international standards.
The company is a franchisee of two developed poultry breeds - the Vencobb and BV-300 - and has farms and hatcheries in Maharashtra, Gujarat, Uttar Pradesh, Punjab, Haryana, Jammu and Kashmir, Delhi and Bihar.
Industry publications rightly refer to the group as the lifeline of the Indian poultry industry. Today, owing to the VH group's nationwide network of 38 layer hatcheries, 38 broiler associate hatcheries and 156 broiler integrated hatcheries, the Indian farmer can avail himself of one-day-old chicks right at his doorstep. The group has been solely responsible for upgrading the Indian poultry industry from the stage of a backyard operation to an organised industry.

In 1981, the egg industry was hit by an unprecedented crisis. At that time the price of egg was determined by traders who did not take into account the cost of production or the demand and supply situation. Eggs were procured at artificially lowered prices. Once they built up enough stock, prices would be increased. During the high-price season traders did not buy eggs from the farmers. The price of egg was thus manipulated so that eggs could be bought at a low price and sold at a higher price. Obviously, this system did not benefit either the producer or the consumer. Between 1979 and 1981, the cost of inputs, particularly chicken feed, increased by about 250 per cent. The selling price of an egg, however, remained more or less stagnant at 33 to 35 paise, affecting profitability. By 1981, over 40 per cent of the farms across the country were forced to close down, and the very survival of the egg industry was threatened. Dr. B.V. Rao, the founder of Venkateshwara Hatcheries Limited, the pioneering poultry production company, decided to revive the egg industry and put it back on the path of orderly progress.
B.V. Rao believed that like Operation Flood, egg production and poultry farming would fetch a guaranteed income for farmers. In 1982, his clarion call - "my egg, my price, my life" - brought thousands of farmers from across the country into a common platform under the National Egg Co-ordination Committee (NECC). Today, the NECC has a membership of more than 25,000 farmers. Over the years, says B.S.R. Shastri, managing director, NECC, "the committee has grown into a mature organisation." It has expanded its scope to include:
* The fixing of remunerative egg prices across the country;
* Price support operations in cooperation with the National Agricultural Cooperative Marketing Federation of India (NAFED);
* Market intervention through Agrocorpex India Limited (ACIL), a marketing company with only poultry farmers as share holders, promoted by the NECC;
* Rural market development by promoting distribution channels;
* Including eggs in the Noon Meal Programme for school children introduced by the government of Tamil Nadu;
* Mass communication programmes to promote egg consumption.
According to Shastri, the fact that the per capita consumption of eggs has increased from 18/19 in 1982 to about 38 by 2002 is evidence that the campaign has met with success. "Ever since the NECC started declaring egg prices on May 14, 1982, farmers all over India have been receiving consistently better prices than in previous years," says Shastri. Additionally, with the government being extremely supportive towards this sector by assisting the NECC, egg production has gone up substantially. Financial support for the poultry sector has increased from Rs.55 millions in 1998-99 to Rs.62 millions in 1999-2000.

India is the fourth largest producer of eggs in the world. Over the past few years, egg production has grown by 5-6 per cent per annum. According to a report in the Animal Husbandry and Dairy (2001-2002), there has been a sharp rise in the availability of eggs.
India primarily exports table eggs and hatching eggs to West Asia catering mainly to the Non-resident Indian population there. India also exports egg powder to a number of European Union nations and East Asian countries. Compared to other egg products, the export of table eggs has increased significantly. In 1998, the country exported 106 million eggs. The number increased to 165 million in 1999. In 2000, the total export of table eggs stood at 185 million pieces. The export of hatching eggs has been fluctuating from 85 million pieces to 60 million. Currently, it stands at 62 million pieces. Industry sources estimate that India can earn foreign exchange worth Rs.200 crores a year within the next five years from poultry export.
The poultry sector requires minimal investment capital and starts giving results in a very short time period. Thus the potential for growth of the sector is huge particularly in rural India. With an increase in demand for eggs it is today one of the fastest growing segments in the country. A study on the Indian food industry done by the Confederation of Indian Industry (CII) and management consultants McKinsey, says: "The poultry sector has the potential to grow at 20 per cent per annum over the next 10 years." The study has set a target of Rs.4,80,000 crores a year by 2005 for this sector.
The potential of the industry is such that an increase in the per capita consumption by one egg or 50 grams of poultry meat can create employment for about 25,000 people, says a report in The Hindu Survey of Indian Agriculture (2000). Approximately, about one lakh people get direct and six lakh people get indirect employment from this sector. Poultry, in fact, has registered the maximum growth rate among all the sectors of agriculture, says the report. The annual contribution of the poultry section to the Gross National Product is about Rs.7,810 crores.
WITH the development of rural poultry production becoming a policy thrust area for the government, the sector is all set for a quantum leap. The Eighth Plan, according to the report, has recognised rural poultry production as a thrust area and has proposed to increase allocations in order to promote this industry. To further aid the poultry industry, the government has raised the basic customs duty on imports from 35 per cent to 100 per cent. This move, according to the NECC, is to protect the domestic poultry industry from potential dumping by foreign countries, especially the United States, the biggest producer and exporter of poultry products.
The NECC appears to be growing from strength to strength. Its advertisements have gone off the air because it has achieved what it set out to do. In these times of uncertainty for Indian agriculture, it is bodies like the NECC that eventually come good for the farmers.