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Economics of Contract Farming in Broiler Production – A Study in Karnataka

KrishiKosh

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Title Economics of Contract Farming in Broiler Production – A Study in Karnataka
 
Creator Chidananda, B.L.
 
Contributor Pratap Kumar, K.S.
 
Subject livestock, agreements, productivity, costs, marketing, markets, contract farming, crops, profit, biological phenomena
 
Description 1. All categories of broiler farmers have the same terms and conditions under a written contract which is more leaning towards the integrators than the farmers with a glaring practice of collecting two blank cheques. And none of the integrators have insurance to cover the risk. Hardly any farmer has a copy of the written agreement and the document has little or no legal teeth in favour of the farmer in the court of law. The farmer gets a growing charge for steering the chicks from day one to marketable age. The base fee varies across firms ranging between Rs. 1.80 to Rs. 2.65 in addition to market price, production cost, and FCR linked incentives. The number of farmers contracted by each integrator varies between 60 and 300. The integrator practices like batch length, batch number, and additional organic supplements have affected the net profitability of broiler contract farms.

2. Despite market uncertainties, independent farmers are in poultry business for decades mainly due to own feed mixing, own retail outlets or trusted vendors. The profits per kg body weight are comparable to contract farms. The independent farmers preferred to continue to be independent.


3. The Cobb-Douglas production function indicated that flock size significantly influenced per batch returns for CF while for independent farms it was flock size and poultry farming experience.

4. The broiler integration has its inherent problems both for farmers as well as integrators. The farmers do not get quality chicks (minimum weight 40g.) which are most important basic input in broiler production. Even feed quality is not easily quantifiable and varies between batches. The integrators charge higher rates for chicks, feed, vaccines, medicines, sanitizers etc., and also insist use of medicines though not warranted, thus increasing the cost of production; the cost is debited from the growing charges. Delays in stocking of chicks were a common complaint from farmers and the study revealed that the average number of batches per year was fewer than the maximum possible of 6 batches. The flock density is less particularly during summer months reducing farmers returns. Higher mortality, surpassing the fixed cost of production attracts penalty. The penalty clause is only for farmers and no mention of it for integrators for any delay, deviations or violations.
 
Date 2016-06-23T11:28:35Z
2016-06-23T11:28:35Z
2007-08-20
 
Type Thesis
 
Identifier http://krishikosh.egranth.ac.in/handle/1/67827
 
Language en
 
Format application/pdf
 
Publisher Karnataka Veterinary, Animal and Fisheries Sciences University, Bidar