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Three-Way Partnership for Contract Broiler Growing

by 5m Editor
20 October 2010, at 9:36am

INDIA - Successful contract broiler growing needs a partnership between processor, farmer and bank.

In an effort to encourage chicken farmers to take care of broiler birds, poultry firms are following a carrot-and-stick policy while entering into agreements for contract farming with them, according to The Hindu Business Line.

Under this scheme, a farmer is expected to take care of chickens and he is rewarded depending on the healthy growth of the bird. Poor maintenance means lower compensation.

For contract farming, a farmer has to have his own land with a shed to maintain chickens. The poultry firms will provide the farmer suggestions on how to construct the shed, besides ensuring proper water and power availability.

According to B. Soundararajan, managing director of Suguna Poultry Farm Ltd, his company helps farmers to get bank credit through a tri-partite tie-up. Project reports are given to banks to help them provide loan to farmers. The tri-partite agreement is to ensure that banks recover their dues through the poultry firms when farmers are paid for the birds they grow.

He said: "We help the farmers also by providing the chick stock, feed and veterinarian. A staff from our firm will also supervise the farms regularly to ensure better maintenance of chickens."

A. Shivakumar, Managing Director of VKS Farms Pvt Ltd explained that growing chicken is a six-week cycle, once the chicken is harvested, the farm will be left idle for three weeks so that it can be cleaned.

He said: "The health of a bird depends on how hygienic a farm is. Therefore, the three-week idling is necessary."

On an average, a farmer can get 3.50 rupees (INR) for every kilo a bird weighs. But some farmers even get INR4.00 to INR4.50, while the worst performance could fetch around INR3.00.

"We have found out that 85 to 90 per cent of farmers take good care of the birds," he said.

According to Mr Soundararajan, the performance of each farmers is weighed through a simple process.

He explained: "Normally, it takes 36 to 40 days for a chicken to be harvested. But if the growth is good, it can be harvested in 33 days. Most of the time, it is harvested after 35 or 36 days."

This is the incentive for a farmer. If a bird grows quickly, it is taken delivery of at least a week earlier, ensuring better and quicker returns to farmers.

Most of the poultry firms are following the contract system for their broiler requirements as this saves them from the trouble of growing chickens, acquiring lands and other such issues, according to The Hindu Business Line.

Suguna Poultry follows the contract system in Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Orissa, West Bengal, Uttar Pradesh, Rajasthan, Haryana and Punjab.

Mr Soundararajan said: "A farmer has to maintain at least 2,000 birds to enter into contract farming. But on an average, our contract farmers maintain 6,000 birds."

In Tamil Nadu alone, Suguna poultry has roped in 3,000 farmers under contract farming.

The poultry firms are, however, choosy in picking up their sourcing farms. "There are more farms than our company needs," commented a poultry firm owner.