A Project Report (MS-100) Synopsis Submitted

For The Degree of

Master of Business and Administration (MBA)

Total Quality Management in Management of Poultry

Industry
A case study of compliance issues and their implications in the poultry industries
in Nagpur

SUBMITTED BY
Ravindra Narayan Lanjewar

Enrolment No : 157661411
Regional Centre : Nagpur
Regional Code : 36
Study Center Code : 36029

INDIRA GADHI NATIONAL OPEN UNIVERSITY

MAIDAN GARHI, NEW DELHI-110 068

 INDEX

SR.NO. PARTICULARS PAGE.NO.

1 Introduction 2

2 Statements of The Problems in the project 3

3 Rationale of The Study 4

4 Reason behind the particular topic 4

5 Abstract 5

6 About the company profile and the industry 6

7 Objective about the project 7

8 Scope of the project study 8

Methodology

TQM Tools Used

Research design
9 8
Sample size and sampling method

Primary data

Secondary data
10 Limitations of The Study 9

11 Conclusion 9

Recommendations
12
Developing retention strategy
13 Bibliography

Introduction
 The poultry industry is considered as the most important field in food manufacturing
sectors. Due to, transformation to white meat for both natives and expatriates, one of the
researches published by Ministry of Agriculture indicated that the improvement in per capita
income and changing of consumption pattern to white meat has led to average annual per capita
consumption of poultry meat from 28.6kg/annum in the period (1996-1998) to 37.7kg/annum
for the period (2002 2004). Since total quality management as new management philosophy is
a cost added value, to be implemented in the business field there should be a clear distinction
between the values added from implementation of TQM comparatively with the corresponding
quality costs.
the positive impact of total quality management practices on productivity. Productivity is
how efficiently a firm or any other organization can turn inputs, such as labour and capital, into
outputs in the form of goods and services with the same inputs or producing the same quantity
of goods and services with less input. In other words productivity can be defined as a ratio of
total annual output out of the total annual cost [8], thereby any factor that may positively affects
annual revenue or negatively affect total annual costs will positively enhance the productivity.
The benefits of quality improvement can not only be reflected on decreasing costs, but also on
maximizing business profits. In terms of quality improvement, what really counts for a firm is
not just cost minimization, but the effect of superior quality has an effect on maximizing
profits . This study will explore the positive correlation between the degree of implementation
of TQM basing on quality practices that implemented in TQM models and the corresponding
productivity index.
Risk is an inherent feature of modern poultry production. Production systems are
complex and both the intermediate products (hatching eggs, day-old chicks etc.) and end
products (meat and eggs) are perishable. Poultry production is based on a pyramid such as is
illustrated in figure 1.

At the apex of the pyramid is a very small population of elite breeding birds.
Successive generations both within the primary breeding company and at the level of
commercial farms means that 1 male selected by the primary breeder could
theoretically contribute genes to up to 20 million broiler chickens. In this way genetic
progress can be rapidly distributed among the commercial poultry population, but, on
the other hand, genetic and infectious problems can be too. For all of these reasons
the practices of hazard identification, followed by informal risk assessment and
implementation of risk management measures have for many years been the normal
way of doing things in the poultry industry. The sorts of routine hazards which must
be considered are:
Physical, - incubation or brooding conditions, weather extremes etc.
Chemical - raw material (litter, feed, water) quality and contaminants etc.
Biological - Animal genetics, microbes, parasites etc.
Most of these hazards are of no direct relevance to food safety, and formal risk
assessment is often not required because the magnitude of risk is patently obvious
(such as, for instance, the effects of a power failure in a hatchery or controlled
environment farm). Probably the first example of a risk assessment and management
exercise in modern poultry production was the Pullorum Disease eradication
programme initiated in the 1930's. This disease is caused by a host-specific strain
of Salmonella which causes severe disease. There is a high rate of maternal
transmission (from hen to chick), yet low transmission among mature hens. The
development of a simple on-farm blood test allowed the implementation of a test-
and-remove-reactors programme to develop breeding flocks free from the disease.
Similar strategies (with some modifications) have been applied to eradication
programmes for a number of other diseases, such as Mycoplasmosis, Avian Leucosis
and so on.
Quality Systems
The above example demonstrates that we have been practising risk management in
the poultry industry for some time, even if we did not always call it this. Other
practices aimed at controlling and improving product quality have, however, a more
obvious and direct relationship to risk analysis. One such system has been developed
by and promoted by the American management consultant W. Edwards Deming from
the 50's to the present. His main innovation was to use a statistical approach to solve
practical problems, but he also promoted a concept of "continuous improvement" and
"Total Quality Management". One tool used to good effect by Deming is the "Quality
Circle", one version of which is illustrated in Figure 2 below. This is characterised by
a data-collection phase, analysis of the data, planning an intervention, and
implementing the intervention. Then the process starts all over again. It could be
argued that, in one way or another (with some insight, luck and serendipity thrown
in), most technological developments are based on this approach. The strength of this
approach is that is essentially experimental, at least in the sense that it has a specific
goal. Any results obtained, however, are immediately applicable because they are
generated under practical conditions. On the debit side it could be said that it is
reactive rather than proactive, that it may not take into account unintended side-
effects, and that it may actually introduce cyclical variation. All of these risks
associated with this model can, once they are recognised, be taken account of.
The HACCP (Hazard analysis and critical control points) system (Cross, 1996) could
be viewed as a specific application of the Deming circle. What it adds is the
recognition that in any production process there will be a whole series of possible
quality circles. It, in effect, states that such activities should be concentrated on those
points of the production chain which are known to most affect end product quality -
the critical control points. It is also intended to be proactive in that it aims to identify
and control hazards before they cause an adverse effect.

.
Against this backdrop, contract farming is billed to be a
veritable instrument to address many
of the traditional ills affecting the agriculture sector and the
farmers, such as fragmentation
and subdivision of land holding, long chain market
intermediaries, ignorance about the
requirements of the buyers, low farm mechanization,
inadequacy of capital and distress sale
and consequent heavy losses to farmers. Contract farming
is an exciting way of giving the
power of scale to the small farmers, transferring corporate
management skill to agriculture
field, providing assured markets for the produce, reducing
the transaction costs involved in
the value chains of the commodities and of ensuring vertical
integration through forward and
backward linkages.
Contractual arrangements of different types have existed in
various parts of the
country for centuries and that too not only in subsistence
and commercial crops but also in
live stock sector.
However, in the wake of economic liberalization the concept
of contract farming
involving multinational companies / firms for production and
marketing and at the same time
provide the much needed technological and capital support
to the farmers has been a reality.
Contact farming in poultry is generally defined as
production of / raising of poultry
birds under an agreement between farmers and a sponsor at
a pre-determined prices.
Within this broad frame work, there are different variants of
contracts depending on
the intensity of contractual arrangements. The basis of such
arrangements is a commitment
on the part of the farmer to provide a specific commodity in
quantity and at quality standards
determined by the purchaser and a commitment on the part
of a sponsor to support the
farmers production and to purchase the commodity.
Thus under contract farming, the farmers produce / rear
chicks under an agreement
with an agency called sponsor engaged in trading or
processing and the latter contributes
directly to the management of the farm through input supply
as well as technical guidance
through intermittent supervision and also markets for the
produce. Thus, the farmer assumes
the production related risks and the price risk is transferred
to the company.
In India contract farming has considerable potential where
small marginal farmers can
no longer be competitive without access to modern
technologies and support. These small
and marginal farmers consisting of 80 percent of the farmer
population of the country are
generally capital starved and cannot make major
investments. Contract farming can fill this
gap by providing the farmers with quality inputs, technical
guidance, management skills, credit
as well as knowledge of new improved technology. Pricing
arrangement can significantly
reduce the risk and uncertainty of market place.
From the stand point of corporate bodies, contract farming
reduces the supply risk,
while the farmers enter into contractual arrangements with
companies in order to minimize
market and price risks. Contract farming also contributes to
value addition by facilitating the
emergence of agro processing industry. Further more, it
enables export of the produce from
small farmers who otherwise would not be able to access
the potential markets. Contract
farming encourages quality production, better handling and
sorting, there by increasing the
value of the produce emanating from the small farmers.
A recent study conducted by National Institute of
Agriculture Marketing (NIAM)
reveals that the farmers have a positive perception about
contract farming and the reasons
identified were assured market for their produce, assured
cash payment by buyers in time,
technology dissemination, supply of quality inputs, increase
in productivity, production of
quality products, hedging of risk against price fluctuation
and exemption of market fees and
others benefits. On the other hand even the contracting
firms have huge benefits like
a) Firm is assured of required output to meet the market
demand and reduces its supply
risk.
b) Firm can control the quality of production by
implementing certain stipulations and
norms in their contracts.
c) Promotion of farm inputs is the potential advantage.
d) Firm shares its production risk with contract farmers.
In general the contract farming is advantageous in all
aspects. The main advantages
among these are:
a) Assures market stability.
b) Up-gradation of technology to be competitive.
c) Contract farming makes quarantine controls more manageable.
Animal husbandry and live stock management are the integral parts of agriculture in
India. It provides gainful employment particularly to small and marginal farmers and
agricultural laborers.
Poultry is one of the important components of animal husbandry, which provides
additional means of employment opportunities to large number of people. Poultry
enterprise
has been one of the important means to alleviate poverty, reduce malnutrition and
employment among both rural and urban people. It also provides employment
opportunities to
many subsidiary industries such as poultry feed, equipment, pharmaceuticals, biological
and
egg and meat processing units.
SIGNIFICANCE OF POULTRY SECTOR FOR THE NATIONAL
ECONOMY
Among different activities in the live stock sector, poultry farming is the fastest
growing. What was once started as a novelty business in the 1970s has now turned out
to be
a highly organized agribusiness with an estimated contribution of about RS. 138 billion to
the
gross national product (GNP) and employing around 1.5 million people, mostly in rural
areas.
In 2006 07 India produced around 44.0 billion eggs and 32.12 lakh metric tons of
poultry
meat (G.O.I., FAOSTAT 2008). Currently India stands fourth in egg production and is
ranked
sixteenth in broiler meat products in the world.
Recent studies suggest that the poultry sector has an enormous potential to improve
the socio-economic status of rural population. Poultry farming is labor intensive, requires
minimum capital and ensures quick returns. It thus helps to improve the quality of rural
population. Estimates show that it can create as many as 25,000 additional jobs on the
consumption of one more egg per head, and 20,000 additional jobs on consumption of 50
grams of more chicken meat per head. It has tremendous potential to create non farm
employment and check migration from rural to urban areas.
Besides this, India has also great potential to exploit the international market. Owing
to the strong agrarian base, India is favorably placed for poultry production. Although
Indias
current share in world trade is small, the prospectives are large when we compare
ourselves
with other developing nations.
Currently poultry contributes about 13 15% share based on quantity in total meat
production. A peculiar feature of the poultry industry is that it is highly fragmented.
There are
several thousand independent poultry producers and there is a very little or no
promotion of
brands either in egg or chicken meat sector. There are also significant variations in
poultry
development across the regions. The southern States account for more than 50% to the
nations egg production. Presently the per capita consumption of eggs and chicken meat
per
annum is 42 numbers and 1.67 Kgs respectively. (FAOSTAT 2006).
The increasing awareness of the need for balanced nutrition has led to changes in
the eating habits with vegetarians accepting eggs as a part of their diet compared to all
other
animals sources of protein. Broiler chicken is the most efficient converter of feed and
cost of
production of animal protein from broiler chicken is therefore the lowest. Thus, in recent
years, poultry and poultry products have assumed a dominant role in the supply of
animal
protein for human consumption. Another important fact to be noticed in the Indian
nonvegetarian
consumer base is that the poultry contributes around 75 80 percent of the food
habits.
PRESENT STATUS AND PROBLEMS FACED BY THE
POULTRY INDUSTRY
India, with a population of more than a billion is moving up in the world poultry map
and is expected to occupy the number one position in coming years.
Indian poultry industry has been growing at an annual varying rates of 8-15% in the
past few decades making India fifth largest producer of eggs and ninth largest producer
of
poultry broiler. At present the industry is estimated at over Rs 30,000 crore and is
expected to
grow over Rs 60,000 crore by 2010. It contributes about $230 million to the Gross
National
Product. But in statistical terms the industry has reported a loss of over Rs 4,000 crore
as an
aftermath effect of the bird flu crisis.
Poultry farming in India has transformed from a mere tool of supplementary income
and nutritious food for the family to the major commercial activity generating the
required
revenue. The growth of the industry with steady production of 1,800 million kg of poultry
meat,
40 billion egg per year and employment generation of about 3 million people indicates
the
future prospects for the industry. Changing food habits, rising income of the middle class
Indian, presence of private players, rising market demand of the Indian poultry produce
in the
export market are some of the contributing factors to the growth of the industry.
This transformation of the backyard activity into a major contributor to the
foodprocessing
sector and to the economy as a whole, is a positive development. At the same
time this opens a new chapter of addressing policy issues, public health, poultry hygiene,
poultry vaccination, consumer market, investment etc. This makes all the more
important to
pay attention towards the development and sustainability of the sector.
There is a huge unorganized sector with backyard flock ranging from 25 to 250
birds. The demand for free-roaming indigenous chicken is substantial in many parts of
the
country. However, the number of such birds is decreasing day by day in major producing
belts. In recent years, efforts were made towards development of birds, which resembles
the
local ones with respect to disease resistance, consumer-preferred meat quality and
rearing
requirements.
Off late, the domestic poultry industry is facing a number of problems and the trade
is in real doldrums. The major problems are, the shortage in major feed ingredient i.e.,
maize, which constitutes more than 50 percent of feed rations. Therefore, even a small
increase in costs can wipe out the profits. Further, the recent avian flu has spread a
wave of
panic across the globe. Adding to these problems other major lacunae is, with respect to
infrastructure. The present infrastructure is highly inadequate. The other aspects that
have
dragged the poultry industry are the recent SARS and Ebola and also the older diseases
like
tuberculosis and malaria.
Owing to all these problems the Indian poultry industry has lost around Rs. 200
crores in the previous financial year (World Agro Trade Scanner, March 2006).
The poultry processing industry is in a very nascent stage of growth. Presently 97%
of the production is sold as live birds only 3% is processed and sold as fresh, chilled or in
the
frozen form. The share of further processed and ready to cook products is even lesser at
about half a percent. The market for processed chicken is confined to metros and a few
large
urban areas.
One of the major obstacles in the way of growth of poultry processing industry is high
incidence of duties and taxes. The cumulative impact of excise duty, sales tax, surcharge
on
sales tax, Octroi and turn over tax in various states ranges from 25 percent to 35.3
percent
(Desai Anuradha J. Venkateshwara Hatcheries Private Limited, 2005). As a result the
consumer price of processed chicken is unaffordably high for the lower and middle-
income
groups. This definitely restricts the expansion of the poultry processing industry.
Value addition through poultry processing not only adds to the income of the farmers,
but also prevents wastage of this food article, which incidentally, is the cheapest
sources of
animal protein.
Based on the estimates of the USA Poultry and Egg Expert Council (USAPEEC),
frozen poultry products are produced and consumed annually in India to a total of about
12000 tons or about 1.5 - 2.1 per cent of total consumption. Frozen birds and parts are
more
difficult to find at the retail shops. Indian consumers prefer freshly slaughtered birds, as
opposed to chilled and particularly frozen poultry. The broiler industry operates
completely as
a live bird market with birds retailed as live birds and slaughtered in front of the
customers in
the retail shop.
Customers have over the years developed a perception that fresh poultry meat
purchased as live bird and slaughtered on site in their presence is better in quality.
Additionally, poor transport, infrastructure and lack of cold chain facilities currently limit
the
feasibility of handling significant volumes of chilled or frozen products.
As poultry is sensitive to both income and price, the recent trends towards faster
growth in per capita incomes; as well as declining real prices of poultry are likely to
contribute
to more rapid growth in poultry consumers.
Some of the critical issues facing contract farming were its role in improving livelihood
security in rural areas, role of the State in promoting contract farming and minimizing
the
transaction costs while dealing with small farmers

Statements of The Problems in the project :

The statement of the problem either in question form or as a declarative statement
attempts to focus on a goal and thereby gives direction to the research problem. It must be
limited in scope to achieve a definite conclusion. A problem suggests a specific answer or
conclusion. A cause effect relationship may be suggested upon the basis of personal
observation, experience and review of selected studies.
People credited with this unit standard are able to demonstrate knowledge of: quality
assurance systems and improvement processes in assurance in the poultry industry; and food
safety, welfare, and environmental issues affecting the poultry industry.
Quality is the fabric of every organization, and it is a vital component for its survival.
So industry must focus on quality. Achieving excellence in poultry industry is not an easy
task. It can be achieved only through implementation of Integrated Total Quality
Management (ITQM) concept in its operations ; this is high time that ITQM model was
implemented for improving quality in the performance of all operational activities in the
industry .

Rationale of The Study :

The aim of the project is to study the Total Quality Management in Management of Poultry
Industry with a factors like Food safety issues affecting the poultry industry are described in
terms of their implications for poultry producers and the poultry industry like feed handling,
hygiene, health, legal requirements, industry codes of practice.

Welfare issues affecting the poultry industry are described in terms of their implications for
poultry producers and the poultry industry. Legal requirements, feeding, housing, environment,
husbandry practices, disease control, humane destruction.
Quality assurance systems in the poultry industry are described in terms of the ways the poultry
producer and the poultry industry may benefit.

Improvement processes in the poultry industry are described in terms of the ways the poultry
producer and the poultry industry may benefit.

Reason behind the particular topic :Risk Analysis and Management in

Practical examples relevant to poultry
1. Salmonella infection on meat
The general principles of risk assessment as applied to the food chain have been
reviewed recently (Ahl and Buntain, 1997). The depiction of a food chain in Figure 3
was adapted from a figure in that paper. The concept of a food chain is particularly
relevant to the control of chemical and microbiological hazards in food. Risk
assessment has been proposed as a possible valuable tool in this area (Kindred, 1996)
though there are still very few references in the literature to practical application of
these techniques to poultry production.

These concepts of risk assessment have considerable promise for the control of food-
borne infections , such as Salmonella sp.(Notermans & Teunis 1996). In fact work is
already ongoing at the UK Central Veterinary Laboratory to develop QRA models for
this purpose (Kelly et al 1998). The UK has one of the most sophisticated regimes in
the world for the testing and reporting of Salmonellainfections in food producing
animals and their environment. In addition to official tests required by legislation a
large number of tests are carried out in accordance with agreements between
producers and retailers and under voluntary monitoring exercises. The pattern of
occurrence of different serotypes of Salmonella sp. in chickens is actually quite
different from that which is reported to occur in the human population, however some
serotypes of considerable human health importance (e.g. S.enteritidis,
and S.typhimurium ) are capable of establishing themselves in poultry production
systems. Unfortunately Salmonella sp. are widely dispersed in nature - Figure 4
attempts to illustrate some of the complexity this introduces in any model of this
infection. The thicker arrows indicate what are, in the authors opinion, the greater
risks of transmission of these infections. Note that other infected chickens (either
parents, or other commercial flocks) are only one of a large number of possibilities.

There is a voluminous literature on the epidemiology of Salmonella infections.

Recently the strategies to control both Salmonella and Campylobacter on raw poultry
products have been reviewed (White et al. 1997). This body of published information
in conjunction with expert opinion already forms the basis of control programmes in
most countries. In spite of the considerable knowledge accumulated there is still
much uncertainty about what will happen in any given combination of circumstances.
One possible risk analysis pathway is shown in Figure 5, but it needs to be kept in
mind that there are multiple other pathways by which infection may occur. A recent
paper (Vose, 1997) illustrates 2 mathematical approaches to the calculation of risk in
an example similar to this. It is hoped that this approach will allow the industry to
better allocate resources among the broad range of control measures now available.
2. Digestive Enhancers
Recently considerable attention has been focused on the use of antimicrobial
digestive enhancers in animal agriculture. It has been suggested that there is a risk
that such use has a significant impact on the ability of doctors to control certain rare
but serious infections, by transfer of infection or resistance genes from the animal to
the human population. To people unfamiliar with agricultural production systems
digestive enhancement may seem a trivial use for anti-bacterials. The effects of such
use are, however, far from trivial. In addition to their direct economic effects, they
can have a significant benefit for animal welfare. Sometimes they act directly by
helping control a specific disease such as necrotic enteritis in poultry, but they may
also improve welfare by improving the utilisation of nutrients and reducing the
volume or moisture of undigested material deposited in the animals environment.
Wider environmental issues are also significant. It is currently estimated that the use
of digestive enhancers in pigs and broiler chickens in the UK saves 290500 tonnes of
feed, 11620 lorry journeys, 714000 cubic metres of water and avoids the need for
25538 hectares of arable land planted with cereals. In addition 532000 cubic metres
of pig slurry do not need to be spread. These savings are made every year we
continue to use these products. There are also benefits for society and the consumer
through the maintenance of animal agriculture and food processing in the Europe,
both of which provide employment and revenue. Under the current, more liberal,
international trade agreements it is inevitable that unilateral bans on these production
aids will result in production moving to other countries. To address medical and
public concerns about the use of these compounds FEFANA (the European federation
of feed additive manufacturers) plans to carry out a detailed survey on resistance
patterns in intestinal bacteria from the major food species in a number of European
countries. It is to be hoped that the results of this information and various other
research initiatives in this area will provide sufficient information to develop an
adequate risk assessment of this issue.
The Precautionary Principle
There seems to be a growing tendency for society to demand zero risk, while
accepting zero responsibility, indeed this seems to be the central message of many
"consumerist" organisations. The political response to this (if the pressure groups are
sufficiently vocal) is to apply "the precautionary principle" - i.e. risk, no matter how
small, is unacceptable. Although this may appear at first glance to be reasonable, it
fails to take into account the complex web of interacting factors which make up real-
life food production systems. Most importantly, it assumes that the precaution itself
introduces no risk. Take, for example, the Swedish proposal to extend their ban on
digestive enhancers throughout Europe. There is no evidence that this will actually
improve human health, but it will certainly reduce the already meagre profitability of
European poultry companies, making it even more difficult to justify the investments
required to further reduce the level of Salmonella infections. It is also likely to
increase the proportion of poultry meat sourced from third countries, many of which
have limited control programmes for food-borne infections and no or very lax
controls on the use of antibiotics in food animals. Thus implementation of a ban on a
European basis may actually be counter-productive in the things it is seeking to
achieve! A full risk assessment of these issues should be able to take account of all
such factors.

Poultry production systems are complex, multi-layered and deal with perishable or
short shelf-life products. It is common for feed-mills, hatcheries, farms and
processing plants to be owned and/or managed by the same company. Effective
recognition of hazards and informal assessment of risk has long been the basis of
progress in the industry. One early example was the eradication of the poultry
specific pathogen Salmonella pullorum from commercial breeding stock. Many other
hazards are dealt with on a daily basis. Many developments are implemented through
a "quality circle" approach involving monitoring, analysis of data, planning
interventions and applying the appropriate intervention. HACCP systems essentially
apply this principle at a series of control points in the food production chain. The
industry has always been good at collecting production data, but increasingly is also
collecting microbiological and other data relevant to the control of poultry disease
and potential food-borne infections. Quantitative risk analysis is a method applied to
the data to calculate the relative chance of specific undesired outcomes. In addition to
the data it may incorporate expert opinion and information on the severity of outcome
in the model. Examples dealing with control of Salmonella infections in meat poultry,
and the use of digestive enhancers, are used to explore the benefits and limitations of
risk analysis.
ABSTRACT
Agriculture is one of the key sectors for international trade that supply food to the world
population. Further improvement would be strengthening the contract farming system at the
operation level and improving the profitability of producers. Measuring business performance
provides the required information to the management for effective decision- making and is used
by businesses to evaluate progress against objectives in an assessable coordination. This study
highlighted the impact of Supplier Involvement and Customer Involvement, later termed as
Integrator Involvement (II) and Grower Involvement (GI) in contract broiler production. The
research then focused on determining the relationship between integrator involvements and
grower involvements moderated by managerial skill towards business performance. This would
enable improved contribution of the broiler - farming system in the country and boost profit.
Then correlation and hierarchical regression analysis were done to
gauge the preliminary results and relationship between the variables. The research also
identified
the theory and practice gaps applicable to broiler - contract farming and provided moderating -
effect explanations linking those gaps. The result thus derived, suggests that in order for
businesses to capitalize and benefit from the working skills, companies need to train their staff
in
technical and administrative fields. Hence, this study empirically demonstrated its importance
and urged the firms to focus on it when applying managerial skills. Staff equipped with better
innovative knowledge and managerial skills would be able to deliver operational efficiency and
affirm that enhanced managerial skills would be able to strengthen the companies ability to
augment business performance.
Keywords: integrator involvements, growerPoultry industry in India is facing large
problems in recent years due to price
fluctuation and high cost of feeds. Hence, different methods of management in the
industry
has been introduced. Hence, a study was undertaken with the aim of studying the
management of contract farming activities in the poultry industry.
To achieve the objective, the primary data was collected from the selected 30 poultry
farmers in each category, spread across two districts i.e., Bangalore rural and Dharwad
in
Karnataka in view of concentration of poultry activities. The Principle component
analysis was
employed to analyse the factors influencing the farmers to enter a poultry contract and
to
assess the factors influencing the farmers not to enter in contract. In case of
procurement
management, the total value of inputs procured per bird was Rs. 48.89 in contract
farmers
case and was Rs. 52.81 in non-contract farmers case. The non-contract farmers
procured
their inputs through three sources viz., poultry dealers, integrators and local market.
Under
cost comparison, in case of contract farming, the total cost incurred was Rs. 3.75 per
bird. In
case of non-contract total costs incurred per bird was Rs. 58.31. The net returns
obtained per
bird was Rs. 1.94 in case of contract and was Rs. 1.23 in case of non-contract. The
Meetfeed
price ratio was 1.74 in contract arrangements and it was 1.56 in case of non-contract.
Similarly, the benefit-cost ratio in case of contract poultry farming was 1.52 and it was
1.02 in
non-contract case. The various problems faced by contract and non-contract farmers
were
analyzed by employing cluster analysis and were grouped under high, medium and low
aggregate clusters. The major problems in case of contract were that of delay in
payment,
non-availability of credit, inadequate capital and disease occurrence. On the other hand,
the
major problems faced by non-contract farmers were that of high initial investment, water
scarcity, lack of technical guidance, and the diseases occurrence. The problems faced
by the
contracting firms were demand for the products and price fluctuations, problem of
diseases,
input diversion by the farmers and extra contractual sales

Productivity index as an important business determinant factor for profitability and business
performance has been studied in this research versus TQM varibles. The study highlighted out the impacts of
implementation of TQM on productivity in poultry processing plants in Saudi Arabia Central Region.
The significance of this research represented in exploring the impact of TQM practices on Poultry Processing
Plants' productivity. Seven determinants of TQM practices and their impacts were measured against
productivity. The determinants included top management commitment, customer focus, rewards & training,
continual improvement, cooperation & teamwork, prevention focus and measurement system.
Data was collected by using Questionnaire tool. The Questionnaire is of closed ended questions. It consists
of three parts, the first part is demographic information about the study sample, the second part about
implementation of the total quality management and the third part is to measure productivity. A sample of three
poultry processing plants that effectively implemented total quality management were purposively chosen out of
eight plants in Saudi Arabia Central Region. The study respondents are purposively chosen which consists
quality team, production supervisors, Total quality management and production managers. 73 respondents out
75 participated in the survey. The finding indicated that the TQM practices have positive impact on poultry
processing plants' productivity

The paper argues that the total quality management concept and its implementation is the
critical need for the survival of industries. In the meantime, lean manufacturing and
constraint management could work together to improve productivity, efficiency and quality.
This article discusses the environment in which businesses are operating, the effect of the
total quality management on productivity and presents some of the benefits that were realized
by implementing total quality management. Direct benefits from combining the concepts of
lean manufacturing and constrained management during the productivity improvement
process by using automation reduce production cycle times by more effectively designing and
scheduling the movement of operations. The ultimate goal is to satisfy customers demand.
This paper discusses how TQM tool like constrained management substantially increases
production.

Keywords: Productivity; Performance management; Total quality management; Constraint

management; Lean production.

Objective about the project :

Following are the objectives of the study:

To understand whether customers are satisfied with the present system.

To know whether proper training programmes like refresher course, conferences,

seminars and workshop are being conducted periodically for the improvement
of
productivity and also to impart the quality product the customers.
To understand whether the concept of teamwork is being implemented.

To know whether the institutions are taking steps towards the quality
improvement
programme.
To compare the views of the poultry producers and retailers .

To compare the views of the consumers and poultry product producers

To suggest ways and means to improve the quality product in the Industry .

Scope of the project study

Though contract farming is not a new concept in Indian Agriculture, its quest as a
strong and established weapon still hangs as a split sword. Contract farming in case of
subsistence and commercial crops is a well known thing but contracting in case of live
stock
and that too poultry is a new beginning.
In Karnataka, contract farming has existed for decades mainly in sugar mills where
farmers have been growing sugarcane at a pre-guaranteed price. In case of other
commercial
and horticultural crops such as Gherkin, Tomato, Tobacco, Chilli, Potato and also in case
of
Medicinal and Aromatic crops, Contract farming is an established avenue presently.
Contract
farming in poultry is entirely a new avenue and hence there arises a need to assess the
major
differences and problems of Contract farming with that of independent farming. Keeping
this
in view, the present study was conducted with the following specific objectives.
1. To study the factors influencing the poultry farmers to be in contract and non-contract
in
poultry farming.
2. To evaluate the procurement management of inputs and its cost.
3. To analyze production management and its cost.
4. To study the marketing management of out put.
5. To analyze cost and returns structure in contract and non-contract poultry farming
activities.
6. To analyze the problems in contract and non-contract activities.
Methodology
The chapter deals with the various details about contract poultry farming, study area,
sampling procedure, nature and sources of data, selection of respondents, collection of
data
and various analytical techniques employed.
The details are presented under the following heads.
3.1 Description about Contract Poultry Farming in Karnataka.
3.2 Description of the study area.
3.3 Sampling procedure
3.4 Nature and sources of data.
3.5 Analytical techniques employed.
3.6 Definition of terms and concepts used in the study.
Research design

Sample size and sampling method

Primary data

Secondary data

Limitations of The Study

Since, the survey method was adopted for the study, heavy
reliance was on recall memory of the respondents for the
data. There is no certain protocol where in the growth
patterns and methods are systemized on a large and these
are confined to individual growers or otherwise regions.
This breaks the uniformity in rearing practices and other
production
applications. No systematic study was carried out on the
comparative study of poultry integration and independent
business, thus the statistics lacks dimension. The
contractual terms are not disclosed as such and hence this
can lead to some speculation in the processes of poultry
integration.

Conclusion
The poultry industry is a large and well-organised system for the efficient production
of animal protein foods. It has a long history of pragmatic measures for the control of
animal health and other risks. More recently a structured approach of cyclic data
collection, analysis, planning, and implementation has become the norm. This
process underpins most technological developments. Quantitative risk assessment
techniques hold considerable promise for analysing and allocating resources in
complex production systems. However they are complex and cannot produce zero-
risk. Whether they can produce information in a form appropriate for communication
of risk to the general public has yet to be seen. It is, in any case, vital that all
discussions of the results of risk analysis make the assumptions on which the analysis
is based totally clear.

Recommendations:
1. As the poultry industry is among the fastest growing in the world, its potential to attract
to big-time foreign investment is negligible and that is why it is necessary to change it
needs greater integration, better cost-effectiveness and improvement in the distribution.

2. There should be proper storage facility for maize as it is produced as rain-fed crop and
therefore subjects to vagaries of monsoon. Maize production has not been able to keep
pace with its consumption by animal feed sector.

3. The poultry companies have to encourage direct procurement of maize from the farmers
by using contract farming, models that are currently use in oilseeds and wheat.

4. Indian poultry industry needs good branding system in order to increase the consumption
of chicken.

5. More retail outlets, mass gathering and creating awareness home to home about the
nutrient values of chicken and egg.

6. Reduce the feed cost by integration and even 50-paisa reduction per Kg of feed can
make all the difference in the net realization.

7. Collection of reliable, updated statistics necessary for immediate and long term planning
and thus help preventing surplus, shortages etc.

8. Develop mechanism to counter anti-meat lobbies.

9. Developing efficient, independent, authority for disease monitoring, biological quality

control.
 Developing retention strategy

Bibliography

References:
1.

6. Chakrabarti, A. 2003. Hand Book Of Animal Husbandry, Kalyani Publishers.

7. 8. http://www.fao.org/WAIRDOCS/LEAD/X6170E/x6170e2k.htm

10. www.blonnet.com/2004/02/06/stories/2004020600211100.htm

13. www.indiaagronet.com/indiaagronet/ poultry_management/Poultry_3.htm

CHANDRA, S., SINGH, B. AND BALISTER, 1982, Economics of poultry enterprise in Ajmer.
Poultry Guide, 19(3) : 67-75.

CHHIKARA, O. P. AND SINGH, S. S., 1989, Cost structure of poultry farming in Haryana.
Poultry Guide, 24(6) : 45-51.

DHILLON, B. S., CHABHAL, S. S. AND JOHL, B. S., 1985, A study into the costs and
margins in egg marketing in Punjab. Poultry Guide, 22(4) : 55-62.

GANESH KUMAR, B. AND RAI, R. B., 2006, Economic status of poultry farming
enterprises
in Andaman and Nicobar islands. Agricultural Economics Research Review,
.
GNANAKUMAR, P. B., 2007, Financial feasibility of investments in contract poultry
farming.
Indian Journal of Marketing, XXXVII (2) : 12.
KULKARNI, A., 1982, Economics of poultry farming around Hyderabad, India. M. Sc. (Agri.)
Thesis, Andhra Pradesh Agric. Univ. Hyderabad, India.

PARMOD KUMAR, 2006, Contract farming through agribusiness firms and state
corporation:
a case study in Punjab. Economics and Political Weekly, 41(52) : 5367-5375.