ECONOMICS OF PRODUCTION AND MARKETING OF BROILERS IN ALLAHABAD DISTRICT OF UTTAR PRADESH

THESIS
SUBMITTED TO Allahabad Agricultural Institute-Deemed University For the award of the degree of Doctor of Philosophy In Agricultural Economics

By

Hakim Shabir Ahmad

2008
DEPARTMENT OF AGRICULTURAL ECONOMICS & RURAL SOCIOLOGY ALLAHABAD AGRICULTURAL INSTITUTE DEEMED UNIVERSITY, ALLAHABAD 211007 I. D. No. 05PHAFM001

This manuscript is Dedicated to

Well Wishers and Poultry Farmers

Chapter-I

Introduction

INTRODUCTION
India and its neighboring countries are ancestral home for the present day domestic fowl. Poultry are domesticated birds that are bred specifically to provide meat and eggs for human consumption. Poultry has been produced in India for over 5000 years, but most of the scientific knowledge of poultry husbandry has resulted from research done within the past 50 60 years. Poultry keeping in India has for a long time remained largely a rural cottage enterprise and received less care and attention but now it has been recognized as a profit oriented venture due to its high economic returns during a short span of time. Poultry keeping is one of the important subsidiary farm occupation in the rural areas in India providing additional income and job opportunities to farming community in rural and labour force in Urban areas. Poultry production in India has made rapid progress in last three decades which is envisaged from the fact that the estimated 27 billion eggs produced in India in 1991 represented 12 fold increase as compared to 1961.Broiler production which was only 4 million kgs in 1971 was 250 million kgs in 1991, which shows almost 60 fold increase in these 20 years and at present the figures are much higher. This increase in poultry production also created employment for about 1 lakh farm workers.(Source: Poultry industry year book 2004) At present the annual output of eggs is likely to increase 40 billion and broiler production to 400 million kgs during the current period (2005-2006). Poultry keeping can be flourished more by applied research, creation of infrastructure and on facilities for providing adequate number of trained personell. At present India ranks 9th in poultry production and 5th in egg production in the world. Indian poultry has emerged as one of the most important animal/ agricultural sector over the last three and a half decades. As a matter of fact it has now been increasingly

realized that poultry farming can prove to be one of the best kind of industry / job by which the evils of the society like malnutrition and unemployment can be eradicated and beaten effectively. Further it is on the threshold to play a very important role as an instrument of social change. Broilers are defined as young chickens about 5 - 6 weeks of age, which have been raised specifically for meat production. Broilers are bred for poultry meat production. They get the name broiler from the broiler houses in which they are bred. Broilers are only 5 6 weeks old at the time of slaughter. Broilers were not so popular in our country about 30 35 years back as they did not got consumers acceptance, but today the broiler farming in India has taken a stride for rapid development mainly because of gradual change in the food habits of our people, increase in the purchasing power of wider section of people, rise in income and also due to shortage of other forms of meat such as mutton, beef, fish etc. etc. Broiler meat when compared to other forms of meat has higher protein content, lesser fat and fiber. Broiler meat composition is given in table 1.1. Table 1.1: Composition of broiler meat S.No. 1. 2. 3. 4. Particulars Water Protein Fat Other like minerals Percentage 71 19 5 5

Source: Poultry Industry yearbook 2004

Calcium, phosphorous and iron constitutes are present in 12, 20 and 19 mg respectively in 100 gms of broiler meat. It has rich content of lipids, vitamins and the energy supply is 300 calories per 100 gms of meat. Even after five decades of independence the per capita consumption of animal protein food like milk, meat, egg and fish are far below the national target as fixed, due to poor purchasing power and lack of know how about the balanced diet. Also the reason for this is high incidence of vegetarian population Now, it can be rightly envisaged that with the awareness and consciousness about health and change in food habits of people the consumption of animal protein food is sure to increase more so in respect of broiler meat. The consumption is sure to increase because of it being cheap as compared to mutton and fish and also broiler meat is considered to be tastier. Broiler farming is possible in widely different agro-climatic environment, as the fowl possesses marked physiological adaptability. Requirement of small space, low capital investment, quick returns from investment and well distributed turnover throughout the year make broiler farming remunerative in both rural and urban areas. The rearing of broilers provides an excellent opportunity for gainful employment to idle or under employed members of rural, semi urban and urban families. This industry readily adopts itself to a full time or part time occupation particularly for women, children or elderly people. A sizeable supplementary income may be obtained from poultry products even though the individual producer may have other employment. Amongst farm animals, poultry is one of the quickest and most efficient converters of plant products especially low fiber feed stuffs, which are not used for human consumption, into highly nutritious, protective animal protein food. Poultry litter, if properly collected as in the deep litter system has a high manurial value containing higher percentage of nitrogen and phosphorous than manure from other

livestock. Broiler industry can be a complementary enterprise, because a ton of poultry manure can supply the required fertilizers needed under irrigated conditions for about two acres of wheat or sorghum or for about one acre of paddy or maize, or for about half an acre of vegetables or for about one fourth acre of sugarcane. To produce this the birds occupy less than 20 sq. yards of space but supply fertilizers for 1000 and up to 10,000 sq. yards according to the type of crops. The first and the foremost attempt in commercial broiler production in India took place during 1959 in Hyderabad under the supervision of Dr. Earl Moore a U.S.technical cooperation Mission poultry expert, through Kansas State University, United States Agency for International Development programme. At that time 4500 white rock day old chicks were imported form Israel and reared at Osmania Veterinary College, Hyderabad. In mid sixties 10,000 broiler chicks belonging to seven different fast growing strains were imported from Australia. Over two million chicks were produced upto 1971. However until 1975 the Indian poultry Industry was mainly age oriented and the broiler production remained as supplementary to egg production and seasonal in nature as well as operation. During late seventies and early eighties consumers realized the deliciousness of broiler meat and thereby demand for broiler meat began to creep up & demand increased to many fold. In order to save foreign exchange and prevent the danger of spreading new poultry diseases from abroad the Government of India decided to develop commercial broiler strains indigenously. This had lead to the starting of All India coordinated research projects on poultry breeding during 1970 71 with several breeding centers all over India with the objective of developing a commercial hybrid broiler suitable for the local climatic conditions and capable of attaining a minimum body weight of 1 kg with feed conversion efficiency of two to six weeks of age. India is perhaps the

only country in the developing world that can boost self sufficient breeding capacity with sophisticated S.P.F. (Specific pathogen free) technology and full-fledged

research operations combined with training facilities comparable to the best in the world. The first commercial broiler released which is purely of Indian origin and developed without any foreign assistance was B-77 from Indian veterinary Research Institute. Izzatnagar, UP. During 1977 Later 1BL-80 from Punjab Agricultural University, Ludhiana and 1BB-80 from University of Agricultural sciences Bangalore were released during 1980. Later several commercial hatcheries in collaboration with foreign poultry breeder have released commercial broilers with trade names of Ross, Indian river, Cobb, Lohmann, Hybro, Marshal, Peterson etc. Broiler production is increasing day by day, month by month and year by year. The following statistics show the many fold increase in broiler production Table 1.2: Broiler production in India (in millions kgs) Year 1971 1977 17 1980 30 1985 75 1991 250 2001 350 2004 450 2005(proj) 500

Production 4

Source: Poultry Industry Year book 2004 During the last decade or so poultry industry especially broilers in India had galloped at rapid rate and recorded tremendous increasing results. India is expecting a big leap in broiler production towards 21st century. Broiler meat consumption is increasing every year compared to other meat. Many delicious delicacies are made out of broiler meat like chicken korma, chicken tandoori, chicken Manchurian, chicken kebab and much more which are well accepted by consumers. Marketing of poultry and poultry products is one of the sensitive areas of the industry, which allows the producer to think whether to continue or close up the

activity. As it is rightly said that it is easy to raise a crop or animal product but the uphill task before the producer is that it should be satisfactorily marketed. The poultry industry engages in extensive market development and demand expansion programmes. The growth of the processed egg product industry and the development of further processed poultry meat products are examples. The rapid growth of fast food chicken industry has also influenced poultry markets. The industrys recognition that consumers desire a younger, smaller and more tender chicken than was produced as a by product of the egg laying flock, and the resulting expansion of the broiler industry, is a classic example of the marketing concept and industry market development. Most of this market development was sponsored by processors and the fast food industry. Presently the serious problem of Indian broiler industry is marketing. The marketing of a product comprises of selling, advertising and public relations assessment of consumer needs, marketing research, product development and planning, pricing and distribution. If the marketer identifies them and promotes them effectively goods will have an easy outlet. The demand for broilers meat is influenced by many seasonal factors which may increase or decrease the demand. Broilers are marketed either live or dressed. The loss due to the dressing in converting live weight to dressed weight is around thirty percent. Landless labourers often derive more than 50 percent of their income from livestock, especially poultry. The value of output from poultry sector is nearly Rs. 15,000 crore, and the sector provides direct or indirect employment to over 2 million people. With output to 45 billion eggs in 2004-05, India ranks among the top five egg producing countries in the world. Further more, poultry today is one of the fastest growing segments in the economy. (Source: Economic survey 2005-06 page 158).

India is on the 9th rank in chicken meat producing countries in the world (FAO data 2004, provisional). Around 1.65 MT of chicken meat was produced in 2004. For poverty alleviation, nutritional nourishment and gender empowerment, government is promoting the development of the poultry sector, particularly of the rural backyard variety. Under assistance to state poultry farms a centrally sponsored scheme, the North Eastern States are being provided with 100% financial assistance, while the other states receive 80% of the funds requirement. (Source: Economic survey 2005-06 page 159.) Recently with the spread of bird flu disease some setback was done to poultry industry which is slowly and steady coming back on track. The price slashed steeply and chicken menu was withdrawn from fast food junctions and restaurant owners from their recipe due to outbreak of bird flu.
Allahabad district having population near to five million is situated to south east part of Uttar Pradesh. Allahabad city is one of the oldest and historic cities of India. A large portion of people have non-vegetarian food habits, thereby increasing the demand for broilers, moreover due to high cost and non-availability of other meat products. Allahabad Agricultural Institute-Deemed University situated at Trans Jamuna region of Allahabad had firstly established broiler enterprise about four and half decades back under the supervision of Canadian expert Mr. Jim Gill. The Department of Animal Husbandry of the Institute also offers a training course for poultry management. The broiler production of the Institute created awareness and interest among the locals and other people of adjoining areas in the broiler production as it is remunerative enterprise. Justification and importance

Broiler production is showing increasing trend day by day. Entrepreneurs are adopting this enterprise due to its being highly remunerative and profitable. For

poverty alleviation, nutritional nourishment and gender empowerment, government is promoting the development of poultry (Broiler) sector. Government is also offering subsidies to poultry farm owners through centrally sponsored schemes. The problem is also justified as the broiler meat is finding its place in every kitchen due to its being tastier and cheaper than other forms of meat. A thorough study into the production and marketing will be useful to the rearers so that they can look forward for necessary changes in the production patterns and marketing practices of the broilers, which are still reared on traditional methods. The broiler farm owners will go on scientific lines as this study will locate the bottlenecks in traditional methods. Marketing results may be useful in examining the existing marketing system and in knowing the bottlenecks related to the marketing of broilers so that suitable suggestions can be communicated to curb the existing problems. The results of the study may also help government agencies, policymakers, credit institutions, co- operative societies, marketing agencies, traders and other private agencies etc to take measures regarding the production, trade and marketing practices of broilers. It will also help further research pertaining to poultry industry. Also, the work shall be of academic utility and may show some guidelines for the extension workers of the study area.

Objectives 1) To work out the costs and returns in broiler production in different size groups. 2) To evaluate the measures of farm profit in different size groups. 3) To study different marketing channels involved in the marketing of broilers. 4) To find out the producers share in consumers rupee, price spread and marketing efficiency in different channels of marketing. 5) To study the problems faced by the broiler rearers of the selected area and suggest suitable measures to curb them. Hypotheses

1) Large sized farm owners have relatively higher cost of production as compared to medium and small sized farm owners. 2) Small sized group farms have relatively higher profit than the small and large sized group farms. 3) Producers share in consumers rupee is more in direct channel (ProducerConsumer) as compared to other channels prevalent in the study area

Limitations 1) The collection of the data was entirely based upon the memory of the respondents. 2) It was very much difficult to extract information from respondents as they use to give information in their own dialect, which was also painstaking for researcher to obtain correct information 3) Since most of the broiler farmers do not keep updated records and accounts, so the data collected entirely depended upon their remembrance and experience. 4) Some entrepreneurs were reluctant to give correct information for the fear of being taxed by the government, so they would take strangers/investigators enquiring about their enterprise as government agents and alike. 5) Some entrepreneurs were hesitant in allowing investigators/ researchers in having frequent visits on their farm.
6) Resources available with the investigator were limited, which was also a

limitation in enlarging the study area

Chapter-II

Review Of Literature

REVIEW OF LITERATURE
The present problem selected for the study Economics of Production and Marketing of Broilers in Allahabad District of Uttar Pradesh is a neglected one so far. Some isolated and independent investigations as well as case studies regarding its different aspects were attempted, but not a complete study on production and marketing was done so far. It is also always desirable to analyze the research work already conducted in particular field for the systematic development of science. Therefore, it was felt necessary to retrospect the research work already done related to economics of broiler farming. To make the study about economics of production and marketing of broilers in Allahabad district more rational and useful a brief review of research findings done by different researchers is given below. Johnes and Henson (1975) conducted a study and showed many similarities in performance and some difference in individual cost items in producing broiler in the South and North East USA. From mid 1972 through 1974, costs averaged about 22.5 cents per pound of saleable live weight, feed accounted for 72-74% of total costs, chicks for over 12 percent and grower payment for 10-12 percent costs vary widely between months and within regions. Nemati (1976) reported that profitability of poultry keeping in Hungary varies from farm to farm. Some 60-65% of costs are for feed, and the study investigated the timing of feeding, the rationalization of feed structure and its effect on the efficiency of broiler production. Optimal feeding can result in saving of 0.05 -0.1 kg feed per kg of poultry meat. This would be equivalent to a saving of 10-15 thousand ton of maize a year in Hungary and could improve the profitability of broiler.

Richardson (1976) conducted a research and enlighted some light on production, marketing and consumption in United Kingdom broiler industry. According to the report consumption of chicken has risen from 1 million in 1950 to 300 million in 1975. The report draws detailed material on production, consumption and changing structure of the industry. Ahmed (1977) conducted a study for calculating the cost of broiler production in Vidarbha agro-climatic condition in three lots of broiler. The total cost per broiler worked out to be Rs 8.41. The recurring (variable) and non-recurring (fixed) expenditure per broiler was Rs 7.27 and Re 1.14 respectively. This worked out to 86.94% and 13.56% of the total cost. The cost of chicks and feed accounted for 90% of the recurring expenditure. The monetary return per broiler was Rs 10.10 at the selling rate of Rs 8.00 per kg of live weight. Al-Hassan, McRae and Hulan (1981) studied energy costs, investment costs, and the overall costs of production of chicken and turkey broilers have escalated in the past decade. Poultry scientists at the kentville research station in Nova Scotia have identified some areas where costs can be reduced by sound managerial practices. A major study area has been the effect of reducing floor space per bird below the suggested or cost of production average floor area of 0.8 ft 2 per chicken broiler and 2.33 ft 2 per turkey broiler. Sewak and Dhillon (1983) reported that cost and return structure of poultry business had undergone by change due to the severe inflationary trend in the Indian economy, since cost of feed comes around 75 per cent, cost of chicks 17 per cent, of labour cost 4 per cent and miscellaneous cost 4 per cent. As far as the cost structure for different categories of farm i.e. category I, II and III was concerned the total cost

per bird per year turned out to be Rs 60.67, 60.56 and 53.70 for small, medium and large farms respectively. Patil (1985) studied by means of benefit cost ratio that broiler production can be a profitable enterprise in India. Since feed is the major cost item, profitability can be improved by proper feeding management, well balanced diet should be prepared by cheaper and easily available ingredients.It was concluded in the study that feed accounted for nearly 65 per cent in the total cost. Pandey and Tewari (1985) conducted a study to assess the profitability of commercial egg and broiler production and attempted to determine the minimum economic size of commercial layer and broiler unit and there financial feasibility and to identify the constraints in poultry development. Unplanned expansion of broiler farms and increased production cost and marketing problem are major constraints of broiler production. Prasad (1986) conducted three experiments on 100 broilers from day old to 10 weeks of age at three different climatic conditions on the performance of broilers. Three periods of the year was selected as (I) September October-November (II) February-March-April and (III) April May-June and broilers were reared at standard ration. The body weight gain, feed grain ration, mortality rate and cost of production were estimated for 10 weeks. It was concluded that the broiler production is economical during September October November as well as February-march April as compared to hot climate conditions that is during April May- June. Popioick (1987) conducted a study in 14 farms situated in cooperative within the Lublin regions of Poland and he analyzed overheads in broiler production. The use of raw material cost, variable costs or the value of the total gross production as a basis for the calculation of fixed costs is reviewed. Overheads incurred from individual

production cycles can be calculated more precisely by incorporating data regarding chick number and fatteny rates in the cost analysis. Due to the specific production structure of chicken broiler farming the use of material costs values as a basis for calculating indirect costs is seen as highly appropriate. Yanakieva (1987) reveals that change in the economic performance of broiler rearing in Bulgaria are outlined along with the influence of important factors over the 1976-84 period. Results indicate that when the level of intensification in production is raised, economic performance decreases as a result of the rise in prices of raw materials of industrial origin. With these prices and prices of broiler meat is not profitable. Gates and Timmons (1988) conducted a study and showed a methodology for economic optimization of broiler production can provide an environmental control strategy that will select inside temperature as outside temperature, and bird age change. Their environment can be optimized on either a per unit weight basis or on a per bird day basis. The system can be used for any type of housing. As parameter prices change e.g. fuel or feed costs the optimum inside temperature may shift and this can be computed by broiler economic optimizing system. Shingal et al. (1988) showed the importance of feeding value of Gulli danda seeds in broiler diet. Gulli danda (Phalaris minor) is widely available weed which was unknown in agricultural field a decade ago has very extensively spread at the present time in wheat rice rotation fields. The investigation were divided into two parts(1) in the laboratory and (2) at the poultry farm. Comparison of chemical constituents in gulli-danda and maize seeds indicated that they are chemically comparable so far as dry matter, crude protein crude fat and metabolizable energy are concerned. At the

poultry farm experiments higher body weight gains were obtained in the group of birds fed with gulli- danda seed compared to those fed with maize. Rajendra Prabhakaran and Subramania (1988) reported in their study that seasonal index for broiler prices were highest in January (108.32) and lowest in September (93.76). The high price in November, December and January could be partly attributed to the increased demand during festivals like Christmas, New year etc and low price in September was because of the religious restrictions of eating nonvegetarian dishes. In summer months (March, April, May) broiler prices fall because both production of chicks as well as consumption of broiler were less. Chhikra and Chidha (1989) recorded that the cost and returns structure of the poultry enterprises has undergone a big change due to the severe inflationary trend in the Indian economy so far as costs are concerned the major items of costs such as feed (70.12%), cost of day old chicks (6.82%), labour cost (2.24%) and interest on variable cost and fixed cost (1.73%) and (5.42%) respectively. In cost structure, the total cost per birds per year calculated are to be Rs 104.38 Rs 92.41 and Rs 88.52 for small, medium and large farms respectively. It shows that cost on large farms are substantially lower than the small and medium farms. This due to superior

management skill, use of better genetic stocks and the economic of scale. Gross returns were also found to be highest for large farms followed by medium and small farms. Dagaas (1989) stated the relative production performance and the economic profitability of raising 5 broiler strains at 6, 7 and 8 weeks of age and marketing them at different forms such as live, dressed or cut up parts were studied. Parameters used to determine the production performance of the broilers were body weight, feed consumption, weight gain, feed efficiency, mortality and carcass yield. Results

showed that strain was found to have significant influence on all the production parameters except on mortality. Rahmatullah (1989) studied that poultry faming has become very popular. Broiler rearing is much more profitable than layer farming and the return in case of broilers in quicker. In his article Economics of broiler rearing, he has found that the farmers have initial capital expenditure of Rs 10,0000 in establishing the farm. The construction of one poultry house (1000 sq.ft.) was Rs 12,500 and the equipments and fittings etc. Rs 2,500. In this study the capital investment was not taken into consideration since the farmers were rearing 1000 broilers within 60 days. Considering the maintenance cost of broiler rearing, the farmer gained an over all profit of Rs 700 in 60 days for 1000 broilers. The average returns was Rs 2.70 per bird in commercial farming. Timmons, Bottcher and Scheideler (1990) an expert system was developed to analyze the effects of various design and management options to reduce heat stress and /or increase economic returns in broiler housing. Returns are given in terms of their expected values and an expected range in 7 yrs. Safley and Safley Jr (1991) stated that poultry is the main agricultural industry in North Carolina, USA. The majority of broilers and turkeys grown are raised in confinement housing and different bedding materials include wood shavings, sawdust and peanut hulls. The litter from the houses in rich in nutrients and can be used as an organic fertilizer on cropland or as feed ingredient. This study estimates the land, equipment, labour and cost requirements associated with operating six model compost facilities. Cost estimates were based on 1989 prices. Differences between the systems are discussed.

Kim (1991) reported the analysis concentrates on structural changes on different sizes of chicken farms and uses a Markov model analysis. Of the farmer with less than 5000 broilers, between 35% and 10% survived the transition period 1980-95, while for farms with over 30,000 chickens 14% to 35% remained in business. The profitability of survival for farms with 5000 to 30,000 chickens was 51% to 57% during the same period. The optimal size of a broiler chicken farm with one person of labour input is 3333 chickens and these farms average 1.6 million won (US $1964.40, 1US $ 814.50 won, October 25,1996) income. The consumption of chicken meat has been increasing as GNP per capita has risen. However, the level of producer price per kg has not increased at the same rate as labour and feed costs during this time period. Panday and Aggarwal (1992) reported the analysis of monthly and annual broiler and feed prices in India for the period 1980-88 show that, in general, broiler prices were relatively higher in colder months than in warmer months. By contrast feed prices registered an increasing trend during summer and a declining trend in the winter season which shows higher profitability to producers during winters and less profitability in summers. In contrast other heating charges will go up in winters which are very less in summers. Variability (28%) in broiler prices was highest in August and lowest (15%) in May. Feed prices observed the highest variability in March (21%) and lowest in October (15%). Both broiler and feed prices significantly increased between years and months. Broiler prices increased at the rate of 6% - 7% per annum, in different seasons broiler prices increased by about 18% in September and feed prices by 8% in August. Broiler prices declined by 13 pecent in June and feed price by 6% in January. The parity indices for broilers and feed prices observed a mixed situation over the period and across months. To maintain price parity, the study recommends either the creation of cold storage facilities or encouragement of consumers to consume broilers in summers.

Mian, Akbar and Barman (1992) observed than poultry is an important source of animal protein. In Bangladesh poultry is produced in a backyard subsistence method and the existing poultry marketing is reportedly inefficient. This study was conducted to analyze the problems of marketing poultry in some selected areas of Mymensingh district. Findings reveal that poultry birds are marketed through the channel: producer-Biopary 1 Aratdar 2 Retailer- consumer. The intermediaries faced various problems in running their business. The study shows that marketing cost per 50 kg birds was Taka 263.36 in which transportation accounts for the highest cost whereas, the profit earned by them was not encouraging as compared to the marketing cost. Despite low profit, poultry marketing seemed to be more or less efficient. However, since the marketing channel was long, the consumer had to pay a high price and the producer was deprived of fair returns. Kolic (1994) indicated that main factors in determining the profitability of poultry farming enterprises are income, cost and price of the component. Important factors for total income are weight and quality at delivery, feed conversion and bird mortality rate. Cost and price factors include personal earning, labour, technical equipment, average number of birds and production system. Larger farms have better production as well as profit results. Heru (1995) did study which described the linkage between corn markets and poultry market. Specially, this determines the behaviour of supply and demand for dressed broiler chicken and egg, analyzes the dynamic system of integrated corn and livestock markets in terms of stability condition and long run multiplier, and used this for policy analysis on fertilizer subsidy phase out. Gajendra and Sadagopen (1996) studied that since feed is the major item of cost in producing meat and egg, favourable feed efficiency and avoidance of feed

wastages indicates a sound poultry farming system. An economic feeding with nutritious balanced ratio maintaining all technical and managemental practice bring about poultry a profitable venture. Kitsopanidis and Manos (1996) stated that the most important factors for the economics of poultry meat production are mortality and age of final live weight (FLW) of broilers, because they affect the total feed consumed and the total FLW of broilers achieved. Analysis of these factors showed that an increase of mortality from 2.5% to 10.0%, and the age of FLW of broilers from 53 to 62 days leads to a decrease in profitability by 96.7% and 77.7% respectively. the marginal analysis showed that under the economic conditions of 1990, the best day for selling broilers is the 51 st while under the economic conditions of 1994 this day is the 49th or 50th.Also the use of the decision tree technique showed that the actual gross returns per broiler is lower than usual by 2.5% -2.6%. Shanmugam and Mohan (1997) did the study of economic analysis of broiler production in kamarayar district of Tamil Nadu revealed that Rs. 27.10 per broiler was invested to start a broiler farm. The total cost of broiler production per bird was Rs. 22.18 of which variable and fixed costs constituted 93.24% and 6.76 % respectively. Cost of feed alone accounted for more than 50% of the total cost followed by cost of chicks, about 25%. There is wide scope to reduce the total cost by substituting the least cost farm mixed rations. Amount realized by sale of broilers formed the major source of return (96.21%) in broiler enterprise. The net return per broiler and per kg of live weight of broiler produced were Rs. 5.51 and Rs 3.01 respectively. Benefit cost ratio was 1.25:1 in the present study. Break even analysis revealed that at least 127 broilers must be reared by the farmers to cover the cost of production. The economic analysis also proved that the entire investment could be repaid in one year which reflects the economic viability of the broiler farms located in the study area.

Mugga (1997) reported the production and consumption trends in the Ugandan poultry meat. Over the past five years broiler meat production in Uganda has increased by around 25% per year. Consumption has increased by the same percentage. In spite of this both remain low relative to neighboring countries. Topics covered include increasing scale of operations, the need for marketing, production methods, import of chicks and industry performance. Tupy and Shirota (1998) research estimates the economic efficiency (cost efficiency) in poultry production of companies in south and southeast Brazil. A stochastic frontier econometric method in a dual approach is used to obtain the economic efficiency estimates. The economic efficiency estimated for the firms studied was very high, ranging between 93-100 per cent, approximately. Iddamalgoda et. al. (1998) examined the production cost factors and marketing margin involved in producing eggs in the surveyed countries. In this study the egg production cost in defined as the total of the direct costs (feed and chick) and indirect costs (labour, machinery and implement, building, power and medicine). Marketing margin is considered as the difference between egg retail price and producer price. The cost of production for eggs varies widely around the world and the feed cost is the single most important factor among them followed by labour and bird depreciation cost. The objectives of this study are to analyze the different cost factors affecting the production of a kilogram of eggs, to compare the marketing margin from producer to retailer. In order to fulfill the objectives, 15 selected countries around the world were surveyed during 1996. Data was collected based on different cost factors as well as producer and retailer prices for the respective countries.

Srivastava, Ashutosh (1999) did the study on economic of poultry production and marketing in Jabalpur district (M.P) with the main objection (1) to study the socioeconomic status of the organized and unorganized poultry farms in Jabalpur district of Madhya Pradesh state India, (2) to find out the cost of production of eggs and broilers on organized and unorganized farms; and (3) to study the marketing channels of eggs and broilers. A sample of 15 poultry units and 12 broiler farms was selected from the organized sector and 25 poultry farms were randomly selected from the unorganized sector. The study covers the period January 1997 to March 1998 for broiler farms. Results reveal that commercial layer and broiler units, particularly the larger farms were well managed and cost effective as compared to the small and medium farms. Among the four main marketing channels two accounts for a 75% share of egg marketing and one accounts for a 90 percent share of broiler marketing. Poultry farming is considered to have good prospects in the district due to relatively cheaper land and labour input originating from tribal areas. It is recommended that efforts should be made to exploit this potential. Farooq, Mian and Asghar (1999) reported that cost of production and net profit per broiler were Rs 51.38 and Rs 7.92 respectively. Percent mortality has a negative effect on net profit per broiler but did not effect cost of production. Market age and flocks size were positively and negatively associated with net profit. Net profit was lower when the flock size was less than 1500 birds for broilers maintained under average hygienic conditions higher flock size, reduction in mortality and market age, better utilization of the available shed capacity and use of concrete floors were suggested as important factors for increasing net profit for broiler production. Patel (1999) study revealed cost benefit analysis that broiler production can be profitable enterprise in India. As feed is the major cost of input in broiler production and cost can be reduced and profitability can be increased by having proper feeding

management. Cost of feed and cost of chicks accounted for maximum cost approximately 80 per cent. Othman, Salman and Shakib (2000) stated that poultry industry in Jordan has witnessed an accelerating development since the early 1960s, with the launching of private investment. The poultry sector is considered as the most important agricultural sector in the country and contributed about JD 180 million to the GDP in 1995. This study was undertaken on the majority of the broiler breeder stock farms in Jordan and aimed to investigate the technical standards and equipment for broiler breeder houses and determine the size needed to achieve economic efficiency and maximum profit. Analysis of variance was conducted to determine the technical factors affecting the mortality and hatchability rates. Prasad, Jagdish (2000) in his book and particularly in the chapter on economics of poultry farming gave a detailed account how remunerative and profitable broiler farming is. He discussed at length the total recurring cost of 2500 broilers per cycle with five crops a year and in that he showed maximum expenditure on feed. The results of study showed broiler farming is economically viable. Richard and Joseph (2000) observed that poultry and egg marketing channels and processes continue to be shaped by the forces of production concentration, integration and decentralization. The industry is in the advanced stage of industrialization, with close coordination of production and marketing. Integration extends from the input supply industries to wholesale distribution. Open market negotiating and pricing are rapidly disappearing. Nevertheless, this industry exhibits a relatively high degree of operational and pricing efficiency. Riaz and Syed (2000) examined the economic viability of broiler farms in Kamrup district of Assam. A typical farm had to incur about Rs 31.00 to produce one

kg of broiler and earn a net income of Rs 7.21 from the same in a cycle of eight weeks. The income of farmers increased with an increase in size groups. Both breakeven production and break even price were lower than the respective average production and average price received. Regression analysis on gross income showed that coefficients of cost of feed, cost of chick and cost of electricity were positive and significant. Cobanoglu et al. (2002) analyzed the economic structure and economic results of commercial broiler producing farms in Aydn province, Turkey. Data were collected through a questionnaire, survey of 30 broiler farms, conducted between November and December 1999. The biggest part of the farms assets consists of building capital (41.46%) and machinery capital (19.75%). Average slaughter age was 42.50 days. Average feed consumption was 3.60 kg and live weight was 1.9 kg per chick at the end of the fattening period. Feed conversion rate was 1.93, while feed efficiency was 51.80. Total production expenses consisted of feed costs (67.95%) chick costs (17.37%) and other costs (14.68%). Average income per live weight was 35,829.24 TL/kg. Kohls and Uhl (2002) reported in the book about poultry and egg marketing in United States. They reported that both poultry and egg marketing showed an increasing trend. Broilers showed maximum increasing trend in poultry production when compared to chickens and turkeys. Biswas et al. (2003) gave the results of a survey report on broiler production and marketing situation conducted in three coastal districts of west Bengal particularly South 24 parganas, North 24 parganas and Midnapore, are presented. The survey was designed at two levels for broiler farmers and for broiler meat retailers, Four farmers were randomly selected from each village. The relevant parameters of broiler chicken

production and marketing are discussed. These include period of operation, stock procurement, market sales, profit, monthly income, sale of meat, utilization of dead stock, rearing systems and marketing age. The study results showed that the larger farms are better managed by trained personnel and give higher returns. The findings indicate the sustainability of broiler farming in the locality. Areas for further improvement are identified and discussed. Torkamani and Shirvanian (2003) investigated to study the production function and technical efficiencies in broiler units, determine the optimum levels of production factors as well as optimum and near optimum feed rations for broilers. Data was collected from 192 broiler units in Fars province, Iran. Transcendental production and stochastic frontier functions were used to investigate the production relationships and technical efficiencies in the study units respectively. Optimum and nearly optimum food rations were determined using linear programming and modeling to generate alternative techniques. Analysis of the results showed the possibility of increasing technical efficiencies and well as decreasing feed costs in broiler units. Olukosi, Daniyan and Matanmi (2003) reported that over one hundred and thirty two-4 weeks old unserved Anak-200 broiler strain chickens to study the effect of feeder space allowance on agonistic behaviour and growth performance from week 4 to 8.The feeder space allowances (cm/bird) were 2.4, 3.0 and 3.6. The agonistic behaviour that was observed included head pecks, steps, pushes, threats and chase during feeding and non feeding periods. Increasingly the feeder space reduced agonistic acts (acts/bird/hour) during the feeding period from 7.8 (at 2.4 cm feeder space) to 4.5 (at 3.6 cm/bird). There was no effect of feeder space allowance on mean agonistic acts during the non-feeding period. Feeder space allowance had no effect on growth performance parameter.

Sokoowicz and Krawczyk (2004 a) studied the factors affecting the profitability of broiler production in Poland in 2001-03 were analyzed using a selected broiler farm in Podkarpackie province as case study. For all the cycles analyzed, basic production results were determined and a European production India (EPI) and costs of broiler production were calculated. The production profitability index was also calculated. For all the cycles analyzed, the EPI index exceeds 220, which indicates good productivity. Feed costs accounted for the greatest proportion (61.8-69.1%) of the production costs, while the proportion of non-feed costs of farm operations during the analyzed period tended to decline. The economic analysis of farm performance showed that during the analyzed period the selling price of live broilers showed frequent fluctuation regardless of the prices of inputs. No clear relationship was observed between production results and production profitability. Selvam (2004) conducted a study in 2000-01 in 5 villages of Namakkal district (Tamil Nadu, India) to find out the economic potential of free range desi poultry rearing by rural women. The farms were post stratified into small (41 farms), medium (40 farms), and large (14 farms). The flock sizes were 5,12 and 26 and egg production for each flock size was 44, 49 and 52 respectively. The average annual farm income from sale of eggs and birds was Rs 2667.90, Rs 6971.04 and Rs 15273.44 for small, medium and large farms, respectively. For brooding, birds were used. The sale price of eggs and birds on free range rearing was much higher than the sale price of commercial eggs and broilers. No periodic vaccination and no proper shelter were provided to the birds. Sarbiland et al. (2004) undertook a study to investigate the economic status of 83 broiler farms in chakwal, Punjab, Pakistan during the year 1998-99. The average fixed cost per broiler (Rs 51.92) represented Rs 48.51 and Rs 3.41, respectively, for building construction and equipment cost. Average variable cost, gross return and net

profit per broiler was Rs 63.42 + or -1.97, Rs 77.16 + or -1.61 and Rs 13.74+ or - 2.29 respectively. Average turnover rate of net profit on the invested, capital per flock and on an annual basis was 24.17 or -2.36 and 127.27 + or - 13.90%, respectively. Feed cost was the major component contributing 60.27% to the total cost. All the farmers were following almost similar standard vaccination practices; thus its effect on cost of production and net profit was not established. Rate of mortality, flock size, number of flocks per year, duration between two batches, feed efficiency and broilers age at the time of marketing did not affect cost of production and net profit per broiler. Hygienic conditions at the farm, weight at marketing, floor space utilization and house construction, significantly (P<0.01) affected net profit per broiler. Aside from better management, stable market, better utilization of available facilities, appropriate house construction, accelerated gain in weight at the lowest market age and maintenance of standard hygiene would further improve profitability of broiler farming in chakwal district, Punjab province, Pakistan. Krawczyk and Sokoowicz (2004) studied the performance and profitability of hatching egg production in two flocks of broiler hens used in different periods. Economic analysis showed that hatching egg production was profitable in both cycles. Sokoowicz and Krawczyk (2004 b) observed rearing performance and profitability of broiler chicken production were analyzed under conditions of variable prices of live birds, chicks and feeds from 2001-03. In all the cycles analyzed basic productive results were determined and the European Production Index (EPI) and costs of broiler chicken production were calculated. To determine the economic results of the farm, income was estimated in each cycle and the index of profitability and the live bird to feed and chick price ratio were calculated. The economic analysis of farm results showed that in the analyzed period the price obtained for live poultry

was subjected to frequent changes regardless of the prices of cost carriers. No marked relationship was observed between production results and profitability of production. Hakeem (2006) in his article described the importance of broilers in the human diet he described commercialization as essential for the appropriate growth of broiler keeping industry. The concept of sideline, subsidiary or semi-commercial broiler keeping is becoming a thing of the past. Though broiler rearing fits in nicely with the integrated system of agriculture for most peasants with small or marginal holdings, commercial broiler farming is catching on. Larger farms are better managed by trained people and give higher yields as compared to smaller colonies which are inappropriately managed. Khan (2007) in his article described poultry as domesticated birds that are bred specifically to provide meat and eggs for human consumption. They include fowl, duck, geese and turkeys. Fowl are the main source of meat and eggs for human consumption. He also described the safety of poultry meat especially broilers and layers. The findings of the earlier studies helps in conceptualizing the problem and the methodology of investigation and analytical techniques were followed in the present study. The reviewed studies reflect that not much work has been attempted or undertaken to analyze the economics of broilers and marketing prospects. Most of the work on the economics of broilers has been done abroad and not much work has been done in India regarding this sector. However through related research reviews, methodology adoption and analytical tools to analyze the economics of production and marketing of broilers were very useful in the present study. Main issues of the different studies reviewed in the preceding paragraphs shows how much remunerative is the broiler industry, if managed properly as per the

guidelines outlined by poultry experts and if trained personal are available. This study will help policy makers, govt. agencies, marketing agencies and alike to take measures regarding the production, trade and marketing practices of broilers. My study will also help further research pertaining to the industry. Also this work shall be of academic utility and may show some guidelines to the personal involved in this trade.

Chapter-III

Materials And Methods

MATERIALS AND METHODS

Research methodology A researcher is guided by the maxim that while discoveries cannot be planned, work must be planned, if it is to lead to discoveries. All researches begin with the preparation of a research design. To design means to plan. A research design is the overall plan or programme of research. It is the blueprint for the collection, measurement, analysis and interpretation of data. It includes an outline of what the investigator will do from writing the hypothesis and their operational implications to the final analysis of data. There are four parts of research design 1) Sampling design, which describes the various sampling methods to be used for selecting subjects for study, 2) Observational design, which describes the way in which the observations were made, 3) Statistical design, which describes the statistical techniques used for analyzing and interpreting data and 4) Operational design, which describes how the entire operation of research was carried out. Based on there factors, a single value of each parameter under study such as yield, returns, profitability etc. is generated. The present chapter deals with the operationalization of concepts and measurement techniques in view of the objectives of the study. The purpose of this chapter is to present briefly the sampling technique followed, research strategies adopted & statistical tools used for drawing valid inferences. Area of study The area of the study has been various villages of Shankargarh and Chaka Block of Allahabad district, as broiler rearing and production is practiced on commercial scale in the district in general and these blocks in particular. Poultry keeping is one of the leading farms occupation in these selected blocks as well as

villages. These two blocks (Shankargarh and Chaka) contribute nearly 70 per cent of broiler production in the Allahabad district. Sampling Design
For the present study entitled Economics of production and marketing of Broilers in Allahabad District of Uttar Pradesh, four stages stratified sampling procedure was adopted to select the sample.

First stage Second stage Third stage Fourth stage Stage first:

: : : :

Selection of the district Selection of the blocks Selection of the villages Selection of broiler farmers

Purposive Purposive Random Random

Selection of the district Broiler production is practiced as one of the subsidiary farm operation in rural areas but it is practiced on a commercial scale in Allahabad district. Allahabad district was purposively selected as the researcher was well acquainted with the locale. Financial constraint and available resources in the command area were also the reasons behind purposive selection of district. Stage second : Selection of the blocks Out of the total 20 blocks of district Allahabad, Shankargarh and Chaka blocks are purposively selected as these blocks accounted for the maximum production of broilers as well as these two blocks were easily accessible to the researcher. The population of these two blocks was also maximum in Allahabad district as this being the reason behind purposive selection of blocks. Stage third:

Selection of the villages

A complete list of all the poultry rearing villages of both blocks was obtained from block development offices of concerned blocks. Then villages were arranged in descending order on the basis of number of poultry farms. Then 10 per cent of the villages were selected randomly from each block. As a result out of 38 poultry rearing villages of Shankargarh block four villages were selected and out of 44 poultry rearing villages of Chaka block four villages were again selected. These, eight villages of both blocks were selected randomly by Simple Random Sampling Technique. Table 3.1 Selection of blocks and sample villages. S. No. Name of selected villages Random No.

SHANKARGARH BLOCK 1 2 3 4 Janya Pandva Madanpur Sunderpur 12 45 23 15

CHAKA BLOCK 1 2 3 4 Piparsa Dandopur Imelia Mahewa 09 14 07 32

Stage fourth: Selection of the broiler farmers A list of all the broiler farm owners of the selected villages was obtained from village revenue office and village heads. The broiler farm owners were categorized

into three groups on the basis of their size of broiler farms. First group (small size broiler farm owners) comprised of those having below 500 birds in their herd, second group (medium size broiler farm owners) comprised of those having 500 1000 birds in their herd, whereas third size group (Large size broiler farm owners) comprised of those having above 1000 birds in their herd. From each village and size group a sample of 10 per cent of respondents were selected with a minimum of 10 respondents from each village by stratified random sampling technique. The distribution of sample broiler farm owners under different size groups has been presented in table 3.2 Table 3.2: Selection of sample respondents. Total No. of broiler farms Villages Smal l 48 57 59 70 47 60 49 46 436 Mediu m 41 61 28 38 32 48 52 94 394 Larg e 29 51 39 76 22 29 49 47 342 No. of selected broiler farms Smal l 5 6 6 7 5 6 5 5 45 Mediu m 4 6 3 4 3 5 5 10 40 larg e 3 5 4 8 2 3 5 5 35

S.No . 1 2 3 4 5 6 7 8

Tota l 118 169 126 184 101 137 150 187 1172

Tota l 12 17 13 19 10 14 15 20 120

Janya Pandva Madanpu r Sunderpu r Piparsa Dandopur Imelia Mahewa Total

Selection of the market and market functionaries Allahabad district of Uttar Pradesh is having population about five million. Allahabad is traditional broiler marketing centre of Uttar Pradesh. It is the hub of

many wholesalers, poultry farm holders and exporters of broilers. The broiler production from other areas of Allahabad are also brought to Allahabad market. The main market for broilers selected was Kuldabad market in Allahabad district. The main market functionaries involved in the marketing of broilers are itinerant traders, hoteliers, wholesalers and retailers and consumers, A sample of 25 from each of market functionaries involved in the marketing of broilers was drawn from the Allahabad market. Method of study and collection of Data Primary: Survey method was used for the collection of the primary data. The selected respondents were contacted on regular visits and relevant data were collected with the help of pre-tested and pre-structured schedules, particularly designed for the selected problem. The primary data was obtained from the broiler farm owners of the study area. Secondary: The secondary data were collected from the records of the published reports, journals, bulletins, folders, books, records of Animal Husbandry offices, Vikas Bhawan, block development office record, district information centre village heads, district animal husbandry officers, block development officers, revenue office, agriculture office, marketing officers and other relevant sources. Period of enquiry The period of enquiry is related to the agricultural year 2005-06. Prices of inputs The price of inputs and outputs were collected along with the physical quantity from farm owners, wholesalers, retailers, marketing agencies etc. The information

about prices was also obtained from district animal husbandry office, co-operative department, poultry officer and other such relevant experts. The wages for human labour were given on prevailing wage rate in the study area. Electricity charges were charged at prevailing rate. Output prices were those which were prevailing after the sale of broilers.

Estimation of costs and returns

a. The data collected were tabulated and analyzed with the help of suitable statistical tools and measures. b. For estimation of costs and returns, the costs of all the inputs such as of poultry equipment, chicks, feed, medicine, labour charges, watch and ward, as reported by the broiler farm owners. c. Family labour and home producing inputs were evaluated at the price prevailing in the villages. d. All material input costs and the labour input cost were used to calculate the total operational costs. e. Interest on working capital was evaluated at the rate of 4 per cent per annum on the total operational cost. f. Interest on fixed capital at the rate of 12 per cent and depreciation on fixed assets were worked out on the basis of the assets reported to be in use by broiler farm owners. g. The rental value of the land was estimated on the basis of opportunity cost of land. h. The cost of production of broilers included expenses of human labour (hired as well as imputed value of family labour) + interest on working capital + expenses incurred on material inputs (cash and kind) + depreciation and

interest on fixed investment + imputed rental value of land + marketing charges incurred by the producer. i. The gross return was computed as gross value of out put of farm at gate prices and the net return as gross returns minus total cost of production.
ANALYTICAL TECHNIQUES Techniques employed
Several techniques are available for evaluating the economic viability of an investment project. To evaluate the economics of any enterprise, the following important indicators are used

(a) Pay Back Period (PBP) (b) Net present value (NPV) (c) Internal rate of return (IRR) (d) Benefit-Cost Ratio (BCR) The formal definitions of these investment criteria are given below:(a) Pay-Back Period (PBP) The pay back period is the number of years an investment project takes to recover its costs from its returns. Symbolically, t* t =0 Ct = t* Rt t =0

Where, Rt = Return in period t Ct = cost in period t t*= Pay back period (b) Net present value (NPV)

The net present value of an investment is the discounted value of all cash inflows, net of all cash out flows of the project during its lifetime. It can be computed as
T NPV = t =0

Rt Ct (1+ i)T

Where the new notations have the following meanings. i = Discount rate T = Project life

(c) Internal rate of return (IRR) The internal rate of return (r) is that discount rate at which the NPV is zero. The equation for its calculation is:

IRR = t =0

Rt Ct (1+ i)T

=0

(d) Benefit Cost Ratio (BCR) The benefit cost ratio of an investment is the ratio of the discounted value of all cash inflows to the discounted value of all cash outflows during the life of the project. It can be computed as:

BCR =

T t =0 T t =0

Rt / (1+i)t

Ct / (1+i)t

Where

Rt =

Return in period t

Ct = Cost in period t i = Discount rate T = Project time

The criteria adopted to select the project investment as worth while. (a) Pay Back period (PBP) should not be greater than the investors desired PBP. (b) Net present value (NPV) should be positive and greater than zero. (c) Internal rate of return (IRR) of the project should be positive and greater than the cost borrowing. (d) Benefit Cost ratio (BCR) of the investment should be positive and greater than one. If all these criteria are fulfilled, then the investment will be justified as profitable and economically feasible (Gittinger, 1976). For the present study two criterias are taken to find the economic viability of broiler enterprise i.e Benefit Cost ratio and Net Present Value. These two indicators were selected as ANALYSIS OF COST CONCEPT Determination of the profit level is very much affected by the element of cost taken into consideration. Cost concepts are widely used because of their relevance in the decision making process. This means that these costs serve as a basis to expand the size of the farm, to buy the requisite capital assets and inputs. The concepts of cost have been classified into four categories depending on the purpose of study. Cost A1

This gives the total cash expenses incurred by the owner or operator. This includes the cost of the following items: a) Cost of chicks. b) Cost of feed. c) Cost of medicine & vaccination charges d) Cost of hired labour. e) Cost of electrical items, saw dust & others. f) Cost of electricity and water charges. g) Depreciation on fixed capital. h) Interest on working capital. i) Miscellaneous charges Cost A2 = Cost A1+ Rent paid for leased in land Cost B = Cost A2+ Rental value of owned land + interest on value of owned fixed capital assets (excluding land) Cost C = Cost B + Imputed value of family labour. Measures of Farm profit There are various measures which can be used to evaluate farm profit. The measures listed below were used for measuring farm profit. Net income It is excess of gross income over cost C obtained by deducting all the expenses from gross income. Farm Business Income It is computed as gross income minus cost A2 FBI = Gross income Cost A2

Or

FBI = Net income + interest on fixed capital + rental value of owned land + imputed value of family labour

Family Labour income It is the return to the farm operator and his family and it is computed by deducting cost B from the Gross income. F.L.I = Gross Income Cost B Farm Investment Income It is obtained by adding rental value of owned land and interest of fixed capital to Net income. F.I.I.= Net income + Rental value of owned land + Interest on fixed capital
ESTIMATION OF MARKETING COSTS AND MARGINS

The term marketing margin refers to the difference in the prices paid for a commodity at different stages of the marketing system. The marketing margin is the difference in the price received by the primary producer and the price paid by the ultimate consumer. This difference is often called as price spread. Marketing margin includes all costs of assembling, processing, storage, transportation and handling, wholesaling and retailing in the whole process of marketing i.e., moving the produce from the farmer to the ultimate consumer. The study of marketing margins is very essential for formation of an appropriate price policy and its successful implementation. It assumes particular importance in a predominantly agricultural country like India, where agricultural price policy aims at safeguarding the interests of both farm owner as well as the consumer. To safeguard the interests of the producer and the consumer, services of the intermediaries should be made available at reasonable costs. There are several methods of calculating the marketing costs and margins of the intermediaries. In the present study, concurrent margin method has been used.

Concurrent margin refers to the difference between the prices prevailing at successive stages of marketing at a given point of time, for example, the difference between the farmers selling price and retail price on a specific date is the total concurrent margin. Concurrent margins do not take into account the time that elapses between the purchase and sale of the produce. The margins in the marketing of broilers included: i) The cost involved in moving the broiler from the point of production to the point of consumption, i.e. the cost of performing the various marketing functions and of operating various agencies; and ii) Profits of the various market functionaries involved in moving the broilers from the initial point of production till it reaches the ultimate consumer. The absolute value of the marketing margin varies from channel to channel, market to market and time to time. Price Spread, Marketing Costs and Margin in broilers In the present investigation, price spread in the marketing of broiler is composed of costs of marketing incurred in rendering marketing services such as assembling. packing and packaging, dressing, forwarding, transporting/ parceling, wholesaling, retailing etc., and the margins of intermediaries. These margins and costs are influenced by the performance and efficiency of different marketing functions, which in turn, influence the returns to the farm owners on the one hand and price to the consumer on the other hand. This part of the study was undertaken to examine the marketing channels and margins retained by different agencies involved in the process of broiler marketing. The price spread has been analyzed in two terms 1. Rupees per 1 kilogram (1000 grams) 2. As percentage of producers share in consumers rupee

Measures of price spread Producers price This is the net price received by the farm owner at the time of first sale. If PA is the wholesale price in the primary assembling market and CF is the marketing cost incurred by the farmer, the producers price (PF) was worked out as follows. PF = PA - CF
Producers share in the consumers rupee It is the price received by the farm owner expressed as percentage of the retail

price (i.e., the price paid by the consumer. If PR is the retail price and PP is the producers price, the producers share in the consumers rupee (PS) may be expressed as follows. Ps = (PP/PR) /100

Marketing Margin of a middleman This is the difference between the total payments (Cost + purchase price) and receipts (sale price) of the middleman (ith agency). Two alternative measures have been used. (a) Absolute margin of the middleman (Ami) Ami (b) = PRi (PPi + Cmi)

Percentage margin of the ith middleman (Pmi)

PRi - (PPi + Cmi )

Pmi Where, PRi

PRi

x 100

Total value of receipts per unit (Sale price)

PPi Cmi

= =

Purchase value of goods per unit (purchase Price) Cost incurred on marketing per unit

Total Cost of Marketing The total cost, incurred on marketing either in cash or in kind by the producer seller and by the various intermediaries involved in the sale and purchase of the commodity till the commodity reaches the ultimate consumer, was computed as under. C Where C = Total cost of marketing of the commodity. CR = Cost paid by the producer farm owner and Cmi= Cost incurred by the ith middleman in the process of buying and selling the product. MARKETING EFFICIENCY. Marketing efficiency is essentially the degree of market performance, According to Kohls and Uhl, marketing efficiency is the ratio of market output (satisfaction) to marketing input (cost of resources). An increase in this ratio represents improved efficiency and a decrease denotes reduced efficiency. A reduction in the cost at the same level of satisfaction or an increase in the satisfaction at a given cost results in the improvement in efficiency.(Acharya 1999) According to Jasdanwalla, The term marketing efficiency may be broadly defined as the effectiveness or competence with which a market structure performs its designated functions.(Acharya 1999)
Shepherds Index of marketing Efficiency

CF + Cm1 + Cm2+ Cm3+. . . . . . . . .+ Cmn

Shepherds Index of Marketing Efficiency (ME) was calculated by:

Retailers sale price or consumers purchase price

ME =

Total costs & margins

An ideal measure of marketing efficiency particularly for comparing the efficiency of alternate markets/ channels, should be such which takes into account all of the following. (a) Total marketing costs (MC) (b) Net marketing margins (MM) (c) Prices received by the farmer (FP) (d) Prices paid by the consumer (RP)
In the present study, Shepherds method was employed for determining the efficiency of different marketing channels involved in the marketing of broilers.

Chapter-IV

Description Of Tract

DESCRIPTION OF THE TRACT

The aim of this chapter is to present maximum information about the actual surroundings of the locale in which the study was undertaken. The state of Uttar Pradesh is one of the great historical and religious centers of India. Its name means "Northern Provinces." Although Uttar Pradesh is only India's fourth largest state in area and largest state in population. It is truly a miniature of India in terms of diversity of people, religions, languages as well as geographical features and agro-climatic conditions. History of Uttar Pradesh: Many Hindus believe that Uttar Pradesh is the birth place of Rama and Krishna, the heroes of India's two great epic poems, the Ramayana and the Mahabharata. The region is associated with all the religions of India, and it contains important places of worship for Hindus, Muslims, Jains and Buddhists. Buddha preached his first sermon at Sarnath near Varanasi. From the 200s BC, Uttar Pradesh was part of the Mauryan Empire. Later, Various Hindu dynasties controlled the region. In the late A.D. 1100s, invading Turks established a Muslim empire called the Delhi sultanate. It extended its influence over Uttar Pradesh. In mid 1500s, Uttar Pradesh became the political and cultural heart of Mughal empire. Shah Jahan build Taj Mahal at Agra. Revolt of 1857 started at Meerut city and spread to Lucknow, Allahabad, Kanpur, Agra and Jhansi. During 1900's Uttar Pradesh was in the vanguard of the national movement for Independence. Location: Garlanded by the Ganga and Yamuna, the two pious rivers of Indian mythology, Uttar Pradesh is surrounded by Bihar in the East, Madhya Pradesh in the

south, Rajasthan, Delhi, and Haryana in the west and Uttaranchal in the North and Nepal touch the northern borders of Uttar Pradesh, it assumes strategic importance for Indian defence. Its area of 2,36, 286 sq. kms lies between latitude 24 degrees to 31 degrees and longitude 77 degrees to 84 degrees East. In sheer magnitude, it is half of the area of France, three times of Portugal, four times of Ireland, seven times of Switzerland, ten times of Belgium and little bigger than England. Soil: The soils of Uttar Pradesh are different in different regions. They differ from sandy loam to black soils. Minerals: Minerals found in Uttar Pradesh include limestone which is found in GurumaKanach-Bapuhari in Mirzapur district and Kajrahat in Sonebhadra district; dolomite found in Mirzapur, Sonebhadra and Banda districts; glass sand found in Allahabad and Banda districts; marble found in Mirzapur and Sonebhadra ; Bauxite found in Banda district ; non-plastic found in Bansi and Mirzapur and Uranium found in Lalitpur district. Besides Barytes, Edalusite, sand stone, pebbles, reh, salt punter, marang, sand and other minor minerals are found in the state. Vegetation (flora and Fauna) The flora of a region includes all the varieties of plants which grow in Uttar Pradesh. The plains of Uttar Pradesh have been very rich in natural vegetation. The diversity of fauna living in water and land in the air are found in the state e.g. fish, amphibia, reptiles, aves, mammals etc,. Other common species found in Uttar Pradesh are Tiger, Panther, Snow leopard, Smbhar, Cheetal, Kastura, Chinkara, Black deer, Nilgai, Back-brown bear, Mountain goat, Hyena, Hill dog, Elephant etc. Among the

birds Fowl, Pheasant, Partridge, Florican, Duck, Goose, Broilers and wader are common.

MAP OF SHANKARGARH BLOCK

MAP OF CHAKA BLOCK

Climate: The whole state has a tropical monsoon climate. Winter (December to February) temperatures range from 70C minimum to 270C maximum. Summer (April to June) temperatures range from 220C minimum to 420C maximum, with occasional extremes of 450C. A hot, dry wind often blows from the west. The monsoon lasts from mid June to mid September, during which time the maximum temperature drops a few degrees, humidity increases and 80 per cent of the annual rain falls. The eastern parts of the state receive between 100 and 200 centimeters of rain per year. Rain fall in the west is less, with some places receiving under 50 centimeters per year. Economy of state: Agriculture: Farming is the main occupation of the three fourth of the working population. Many peasants have farms that are too small for efficient agriculture. The main problem is the pressure of population on land sources. The soils are fertile and there is good rainfall over nearly all the region. Irrigation facilities bring water to about one-third of the cropped area. Wheat, rice, maize, millet and pulses, such as beans, peas and lentils are the major food crops. Uttar Pradesh is one of the major producers of sugar cane in India. Cotton, oilseeds, jute, potatoes and tobacco are other important cash crops. As part of national and state projects for sericulture (the production of silk fibre), large-scale planting of mulberry trees is under way across the state. Mulberry trees provide food for the caterpillars of the silkworm moth. Manufacturing: Cotton mills were first established in Kanpur in 1869,making it one of the older factory cities of India. It has become one of the greatest industrial cities, with woolen and leather industries, cotton, flour and vegetable oil-mills, sugar refineries and chemical works. The state government has established cement factories near Mirzapur, precision instrument factories around Lucknow, a chemical plant at Bareilly and a diesel locomotive factory at Varanasi. It has also introduced fertilizer

factories at Gorakhpur and Allahabad, telephone industries at Genda Naini and Rae Bareli, electronics industries at Ghaziabad, and scooter factories at Lucknow, as well as an oil refinery at Mathura. Mining : Uttar Pradesh does not have rich mineral resources. Mines and quarries produce limestone, silica, magnesite, and phosphatic shale. Soapstone, copper, lead, zinc, marble, and bauxite are also found in the state. There are coalfields in Mirzapur district. Electricity produced by coal burning power stations is the most important source of energy. Transportation :There is an extensive road and rail network throughout the state. Because of the size of the population, this network is constantly under pressure. The main railway junctions include Agra, Allahabad, Gonda, Gorakhpur, Jhansi, Kanpur, Lucknow, Mathura, Moradabad, Gaziabad and Varanasi. The major defect of the rail system is that there are two different gauges (widths of track). Air routes link several large towns with Delhi and with one another.
Tourism : Uttar Pradesh contains many famous tourist sites. They include ancient monuments, such as the Taj Mahal at Agra and the Mughal city of Fatehpur Sikri. Millions of pilgrims visit Allahabad and Varanasi to bathe in the waters of the Ganges River, which Hindus consider to be sacred.

Table 4.1 : U.P. At a glance S. No. 1 a) b) 2 3 4 Particulars Population Males Females Sex ratio (females per 1000 males) Density of population (persons per sq. km.) Urban population ( Percentage) Status 166197921 87565369 78632552 898 689 20.78

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Literacy rate (Percentage), 2001 census Male literacy (Percentage) Male literates in numbers Female literacy (Percentage) Female literates in numbers Birth rate (per 1000) Death rate (per 1000) NSDP at current prices (2002-03) Rs. crores Per capita NSDP (2002-03) at current prices, Rs. Area (Sq.Km.) Coastline (Km) Districts Parliament constituencies Legislature Constituencies Surfaced roads (per 100 sq/km) Road length (per 1000 km) Railway track length (per 100 sq km) Capital

57.36 68.8 48901413 42.2 26817871 31.6 9.7 170424 9895 236286 0 70 80 242 47.1 818 206 Lucknow

Source : Directorate of Economics and statistics of respective state governments (As on March 26, 2004), Ministry of Health and Family welfare, Govt. of India.

Table 4.2 : Percent share of Economic Activity S.No. 1 2 3 Sector Agriculture Services Manufacturing Percent Share 43 37 20

Source : www. Google.com; www.upgov.nic.in

Table 4.3 : Investors Profile S. No. 1 2 3 Sector Government Indian Foreign Percent Share 49.3 40.8 9.9

Source : www. Google.com; www.upgov.nic.in

The Uttar Pradesh state comprises of 70 (seventy) districts. Allahabad district, which is the area of study for the present research problem is among the largest district of Uttar Pradesh and situated at the confluence of three riversGanga, Yamuna and the invisible Saraswati. Allahabad was the heart of Indian freedom movement against the British rule with Anand Bhawan being the epicenter. Allahabad is basically an Administrative and Educational city. High court of Uttar Pradesh, Auditor General of Uttar Pradesh, Principal controller of defence accounts (Pension) PCDA, U.P. Education board etc are situated here. ITI Naini, IFFCO Phulpur & Triveni glass are some of the major industries here at Allahabad. The details about Allahabad district are given in table 4.4. Broiler industry in Allahabad: Allahabad district having population about five million is having good scope for broiler industry. There are many hatcheries located at Mumfordganj, Naini and adjoining places. These hatcheries were supplying one day old chicks to the farm owners and these chicks were raised upto slaughter age. There were also many feed centers located in Allahabad which were supplying feed to the broiler farm owners. There was no dearth of inputs for broiler industry in Allahabad. The output i.e live as well as dressed broilers were disposed off in local as well as in other states market. Local market where broilers were disposed off was Kuldabad market and produce was also sent to Madhya Pardesh, Bihar, Delhi etc.

Table 4.4 : Allahabad at a glance

S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Area Area under cultivation Population Male Female Total Blocks Total Tehsils Total villages Inhabited villages Uninhabited villages Electrified villages

Particulars

Status 5482 sq. km 555413 ha. 4936105 2626448 2309657 20 07 2802 2540 262 2202 68 13 47.75

Primary Health centers (PHC) Community Health centers (CHC) Literacy rate in percentage

Source : Distt. Economic and Statistics Office, Vikas Bhawan, Allahabad.

Allahabad district comprises of seven tehsils i.e. Karchhana, Meja, Karoan, Bara, Handia, Saroan and Phulphur. Out of the total 2802 villages,2540 villages are inhabited villages. According to revenue records 262 villages are uninhabited. The population of the district is around five million and it is located at an altitude of 98 meter above the sea level. The males are more than females as males are 2626448 and females are 2309657. Agriculture is the main occupation of the people. The main crops grown are wheat, paddy, arhar, soyabean, pea etc. The broiler production is also catching on in Allahabad district. The two blocks selected for the study are practicing broiler

production on a commercial scale. Allahabad is also famous for the cultivation of guava.

Table 4.5: Month-wise mean maximum and minimum temperatures at Allahabad Mean maximum(0c) S. No Month 2005 1 2 3 4 5 6 7 8 9 10 11 12 January February March April May June July August September October November December 23.18 29.58 35.15 39.56 43.75 42.70 33.28 33.94 33.12 33.06 33.05 25.72 Year 2006 26.51 32.46 33.45 39.92 40.00 38.57 33.60 33.50 34.47 34.50 29.82 26.95 2005 8.58 12.90 18.20 20.28 24.52 28.60 25.14 25.12 24.52 19.67 11.30 6.52 Mean minimum(0c) Year 2006 7.06 13.07 15.78 20.94 25.80 27.70 25.36 25.47 25.42 20.93 13.89 9.20

Source: Agro meteorology, College of Forestry, AAI-DU. Allahabad

Table 4.6 : Month wise mean humidity (%age) and total rainfall (mm) of Allahabad district for year 2005 and 2006)

Mean Humidity (%) S. No Month 7 am 1 2 3 4 5 6 7 8 9 January February March April May June July August 93.8 88.25 79.0 56.8 37.97 52.62 88.02 87.23 Year 2005 2 pm 50.32 39.6 32.75 18.34 14.6 28.83 62.36 64.95 64.2 46.74 29.18 8 8.38 Source: Agro meteorology, College of Forestry, AAI-DU. Allahabad 29.98 7 am 90.63 76.46 75.55 62.78 67.65 71.57 87.16 85.42 87.28 89.16 91.3 81.3 2006 2 pm 33.91 28.25 29.0 23.96 36.92 44.53 73.14 65.35 63.5 48.12 36.07 30.48

Total rainfall (mm) 2005 2006

4.1 14.4 15.2 89.5 281.1 175.5 121.9 33.1 0.1

0.1 19.7 29.7 29.0 104.5 378.6 163.0 58.5 11.3 -

September 87.27 86.0 89.5

10 October 11 November 12 December

The two blocks selected for the study were Shankargarh and Chaka. The names of the villages are given in Table 4-7. Table 4.7 : Name of selected villages along with Blocks Block Shankargarh Shankargarh Shankargarh Name of village Janya Pandva Madanpur Block Chaka Chaka Chaka Name of village Piparsa Dandopur Imelia

Shankargarh

Sunderpur

Chaka

Mahewa

The details of block Shankargarh is given in following table.

Table 4.8 Details about block Shankargarh S. No. 1 2 A B 3 4 A B 5 A B 6 A B 7 8 9 10 12 13 14 15 16 17 A B Health centres Nyay Panchayat Gram Panchayat Literates Literacy Percentage Livestock Population Anganwadi centres Mahila Mandal Assembly constituency Banks Nationalized Banks Grameen Banks Total villages Inhabited Uninhabited Educational Institutions Upto Primary School level Upto High school level 154 8 3 10 60 38423 54.17 12718 123 04 01 05 02 03 Forest land Total population Male Female Particulars Total Area Land under cultivation Unirrigated land Irrigated land Status 469.108 sq. km 46908 ha. 31627 ha. 15281 ha. 4818 ha. 135486 71739 63747 187 163 24

18

Principal crops

Wheat, Rice, etc.

Source : Block office, Shankargarh. The details about block Chaka is given in table 4.9 Table 4.9 : Details about block Chaka S. No. Particulars 1 2 A B 3 4 A B 5 A B 6 A B 7 8 9 10 12 13 14 15 16 Health centres Nyay Panchayat Gram panchayat Literates (in numbers) Literacy percentage Livestock population Anganwadi centres Mahila Mandal Assembly constituency Total villages Inhabited Uninhabited Educational Institutions Upto Primary School level Upto High School level Forest land Total population Male Female Total Area Land under cultivation Irrigated land Unirrigated land

Status 573.74 Sq.km 7666.5 ha. 4599.9 ha. 3066.6 ha. 2095 ha. 173084 92860 80224 127 100 27 163 92 47 07 8 49 72002.94 41.6 % 48503 104 104 02

17 A B 18

Banks Nationalized Banks Grameen Banks Principal crops

12 10 02 Wheat,paddy,etc.

Source : Block office, Chaka.

Chapter-V

Results & Discussion

RESULTS & DISCUSSIONS

The present study pertains to Economics of Production and Marketing of broilers in Allahabad district of Uttar Pradesh. The sources of data collection were primary as well as secondary and then there data were tabulated, analyzed and the results are interpreted and presented in this chapter keeping in view the objectives of the study. Average size of broiler farm This aspect was studied to determine the number of birds raised in different season wise and lot wise each size group and in each farm in a year. Table 5.1: Average size of the broiler farms in all size groups in different seasons in a year with total.

S. No.

Particulars No. of Households Selected

Small 45

Size Group Medium Large 40 35

Sample Average 40

A. SUMMER SEASON Total no. of broilers raised in summer season (two production cycles) Average no. of broilers raised in one 2. cycle Total no. of broilers raised in, I Production cycle 3. II Production cycle B. WINTER SEASON Total no. of broilers raised in winter 1 season (two production cycles) Average no. of broilers raised in one 2 cycle Total no. of broilers raised in, 3 I Production cycle II Production cycle C. RAINY SEASON 1. 34380 382 380 384 35640 396 390 402 70080 876 870 882 73200 915 912 918 114660 1638 1628 1648 138530 1979 1968 1990 69695 913.00 907.33 918.66 78169.58 1030.70 1024.25 1037.16

1 2 3 D 1 2 3

Total no. of broilers raised in rainy season (two production cycles) Average no. of broilers raised in one cycle Average no. of broilers raised in, I Production cycle II Production cycle ALL SEASONS (TOTAL) Total no. of broilers raised in all seasons (two production cycles) Average no. of broilers raised in one cycle Average no. of broilers raised in, I Production cycle II Production cycle

31050 345 342 348 101070 1123 1112 1134

66400 830 825 835 209680 2621 2607 2635

107800 1540 1542 1538 360990 5157 5138 5176

65218.75 855.20 853.00 857.41 213083.3 2798.91 2784.58 2813.25

Total number of broiler farms selected for study was 120 comprising 45 small, 40 medium and 35 broiler farms of large size. Structure of farm families The information about farm families is an important aspect of any study concerning farmer. The structure of the family plays a vital role in the farm economy since it is related to the pressure of population on land. The income earning capacity of the family and the decision making in the management of farm are closely related to the structure of the farm families. This particular aspect was studied and is depicted in the table 5.2. Table 5.2: Structure of Farm families S. No. 1. 2. 3. Size group Small Medium Large Sample Average Average size of family 6.94 (100) 7.96 (100) 9.89 (100) 8.14 (100) Sex ratio Male 3.93 (56.63) 4.50 (56.54) 5.35 (54.10) 4.53 (55.78) Female 3.01 (43.37) 3.46 (43.46) 4.54 (45.90) 3.60 (44.22)

Figures in parentheses indicate percentage to total. Table 5.2 shows the average size of families of the selected broiler producers along with sex ratio. It is inferred from the above table that the number of males was higher as

compared to that of females in all three size groups. It was highest in small size group (56.63 per cent) followed by medium (56.54 per cent) and large (54.10 per cent) size groups. The sample average number of males was 55.78 per cent and that of females 44.22 per cent. The sample average of size of family was estimated as 8.14. Age: The age of the members of broiler producers family has a great influence on the efficiency of the farm / hatchery operations. The age wise categorization of the family members of the selected respondents had been depicted in the table 5.3 below.

Table 5.3: Age groups of different farm size groups Age (Years) S. No. Size group 1. 2. 3. Small Medium Large Average size of family (No.) 6.94 (100) 7.96 (100) 9.89 (100) 8.14 (100) Below 15 years 1.97 (28.39) 2.05 (25.75) 3.13 (31.64) 2.33 (28.68) 15-60 years 3.85 (55.47) 4.96 (62.320 5.19 (52.47) 4.61 (56.65) 60 years & above 1.12 (16.14) 0.95 (11.93) 1.57 (15.89) 1.19 (14.67)

Sample Average

Figures in parentheses indicate percentage to total. Table 5.3 gives the age group (in years) of small medium & large size groups with sample average. In the small size group with average size of family as 6.94, the maximum no. of members were in the age group of 15-60 yrs (55.47 per cent) followed by below 15 yrs (28.39 per cent) and 60 years & above (16.14 per cent). In medium size group with average size of family as 7.96, 62.32 per cent were in the age group of 15-60 years, 25.75 per cent in the age group of below 15 years and 11.93 per cent in the age group of 60 years & above. Large size group with average size of family as 9.89, 52.47 per cent were in the age group of 15-60 years, 31.64 per cent in the age group of below 15 years and 15.89 per cent in the age group of 60 years & above. In all the size groups maximum persons were seen in the age group of 15-60 years due to the maximum range and this group also comprises of experienced and trained broiler farmers. The services of children were utilized in watch & ward and for feeding the broilers. Education:

Literacy of the farm keeper and his family plays a pivotal role in the adoption of new technologies, management of broiler farms and improved marketing practices as well as strategies. The literacy of the respondent has been shown in table 5.4 below. Table 5.4: Educational status of sample respondents

S. No. 1. 2. 3.

Size group Small Medium Large

Average size of family (No.) 6.94 7.96 9.89 8.14

Level of education (in percentage) Upto high school 49.35 48.61 46.12 48.02 Intermediate 35.89 34.96 33.83 34.89 Graduation 11.61 10.92 10.61 11.04 Post graduation & above 3.15 5.51 9.44 6.03

Total literacy (%age) 40.19 41.36 42.82 41.45

Total illiteracy (%age) 59.81 58.64 57.18 58.54

Sample Average

Table 5.4 indicates the educational background of the selected broiler farm owners and their families, It is clear from the table that the literacy level was highest in large size group (42.82 per cent) followed by medium (41.36 per cent) and small (40.19 per cent) size groups. The break-up of level of education shows that the maximum literates were having education up to High school in all the three size groups (49.35, 48.61, 46.12 per cent respectively). The sample average of respondents having education up to High school was 48.02 per cent, up to intermediate as 34.88 per cent, up to graduation as 11.61 per cent and up to post graduation and above as 3.15 per cent. The sample average of total literacy of the respondent in all the three size groups has been estimated as 41.45 per cent. Literacy level was studied, as literate entrepreneurs minimized the cost of production by going on scientific lines provided they are given adequate training in broiler keeping.

Economics of broiler production:

The cost of production / rearing is an important indicator being taken into consideration by the Government of India while fixing support / procurement price for various crops and commodities, but in case of broilers, prices tend to fluctuate of and on because demand and supply factors come into operation. The cost of production varies from

region to region and even from farm to farm of a given region. The study of costs and returns provides an idea of profitability of an enterprise and could be a yardstick to planners and policy makers. Broiler production is continued whole year. One day old chicks take about 4-5 weeks to gain a weight of 1 kg or more, provided they are given appropriate feed, medicine etc. and arc suitably taken care of. For the present study, the costs and returns have been estimated for the whole year in all three size groups. It was observed in the field that broiler farm owners use to raise one day old chick upto its slaughter age six times a year (2 each in Summer, Winter and Rainy seasons).The life cycle wise cost of production in different size groups which includes cost of poultry pen has been shown in subsequent tables and also with the help of graph.

Table 5.5: Description of fixed assets of different size groups (Beginning inventory value) (Value of assets as on 2005 2006) S. No. Particulars 1 2 3 4 5 6 7 Poultry Pen Brooders Feeders Water troughs Water Tank Buckets Water pump, Generator etc. TOTAL Number 1.00 2.52 10.77 8.89 1.00 7.04 0.47 Size Group Small 50000.00 2450.00 1735.53 850.75 1500.00 306.72 5015.77 61858.77 Medium 75000.00 5000.00 2342.50 1180.10 1600.00 824.00 9115.50 95062.10 Large 100000.00 7051.14 3003.00 1418.55 1800.00 928.74 12260.62 126462.35 (Rupees/Farm) Sample Average 72916.66 4641.99 2307.53 1126.14 1620.83 660.56 8495.42 91769.25

It is observed from the table 5.5 that in all the three size groups maximum capital investment was on construction of Poultry house/Poultry Pen. The capital invested on poultry pen was highest in all the three size groups. In the above table the different items which were required to start poultry farm are brooders, feeders, water trough. Buckets, water tank, water pump, generator etc.

Table 5.6: Detailed description of Farm inventory in all size groups (Rupees) Size group Small 61858.77 5623.50 56235.27 Medium 95062.10 8641.98 86420.12 Large 126462.35 1 1496.54 114965.81 Sample Average 91769.25 8342.63 83426.62

S.No. 1 2 3

Particulars Beginning inventory value Depreciation Ending inventory value

The average ending inventory value of all these items have taken after deducting depreciation from average beginning inventory value. The average ending inventory value or capital investment of small, medium and large groups came out to Rs. 56235.27, Rs. 86420.12, Rs. 114965.81 respectively, which is depicted in table 5.6. Depreciation on fixed capital i.e. poultry pen and poultry equipments were calculated on a flat rate of 10 per cent per annum.

Table 5.7: Cost incurred on raising broilers in different seasons for small farm size group
Summer season S. No. Particulars Production cycle-I 1000.00 (4.95) 4202.00 (20.82) 267.70 (1.32) 10814.00 (53.59) 152.80 (0.75) 350.50 (1.73) 150.00 (0.74) 677.48 (3.35) 937.25 (4.64) 1124.70 (5.57) Production cycle-II 1010.00 (4.96) 4238.00 (20.84) 270.05 (1.32) 10905.00 (53.63) 155.06 (0.76) 352.01 (1.73) 151.06 (0.74) 683.24 (3.36) 937.25 (4.60) 1124.70 (5.53) 505.00 (2.48) 20331.37 (100.00) Winter season Production cvcle-I 1000.00 (4.02) 4554.00 (18.32) 286.97 (1.15) 14855.00 (59.78) 198.00 (0.79) 365.75 (1.47) 167.78 (0.67) 857.10 (3.44) 937.25 (3.77) 1124.70 (4.52) 500.00 (2.01) 24846.55 (100.00) Production cycle-II 1013.00 (4.03) 4604.12 (18.34) 296.05 (1.17) 15001.20 (59.76) 199.65 (0.79) 375.82 (1.49) 172.72 (0.68) 866.50 (3.45) 937.25 (3.73) 1124.70 (4.48) 508.00 (2.02) 25099.02 (100.00) Rainy season Production cycle-I Production cycle-II Total

(Rupees)

Av. Cost per broiler 2.68 (4.64) 11.23 (19.48) 0.72 (1.24) 32.42 (56.24) 0.45 (0.78) 0.90 (1.56) 0.41 (0.71) 1.95 (3.38) 2.50 (4.33) 3.04 (5.27) 1.34 (2.32) 57.64 (100.00)

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Hired labour charges Cost of chicks Cost of Sawdust etc. Cost of feed Medicine and vaccine charges Electricity and water charges Miscellaneous charges Interest on working capital Depreciation on fixed capital Interest on fixed capital

1000.00 (5.15) 1008.00 (5.13) 3795.00 (19.58) 248.75 (1.28) 10556.75 (54.41) 155.25 (0.80) 290.70 (1.49) 145.50 (0.74) 647.67 (3.33) 937.25 (4.83) 3841.57 (19.57) 251.75 (1.28) 10695.10 (54.50) 157.23 (0.80) 295.75 (1.50) 150.02 (0.76) 655.97 (3.34) 937.25 (4.77)

6031.00 (4.65) 25234.69 (19.48) 1621.27 (1.25) 72827.06 (56.24) 1017.99 (0.78) 2030.53 (1.56) 937.08 (0.72) 4387.96 (3.38) 5623.50 (4.34) 6748.20 (5.21) 3019.00 (2.33) 129478.28 (100.00)

1124.70 (5.79) 1124.70 (5.79) 500.00 (2.57) 19401.57 (100.00) 506.00 (2.58) 19623.90 (100.00)

Imputed value of family labour 500.00 (2.47) Total 20176.43 (100.00)

Figures in parentheses indicate percentage to total.

Table 5.7: Cost incurred on raising broilers in different seasons for small farm size group
Summer season S. No. Particulars Production cycle-I 1000.00 (4.95) 4202.00 (20.80) 267.70 (1.32) 10814.00 (53.59) 152.80 (0.75) 350.50 (1.73) 150.00 (0.74) 677.48 (3.35) 937.25 (4.64) 1124.70 (5.57) 500.00 (2.47) 20176.43 (100.00) Production cycle-II 1010.00 (4.96) 4238.00 (20.84) 270.05 (1.32) 10905.00 (53.63) 155.06 (0.76) 352.01 (1.73) 151.06 (0.74) 683.24 (3.36) 937.25 (4.60) 1124.70 (5.53) 505.00 (2.48) 20331.37 (100.00) Winter season Production cycle-I 1000.00 (4.02) 4554.00 (18.32) 286.97 (1.15) 14855.00 (59.78) 198.00 (0.79) 365.75 (1.47) 167.78 (0.67) 857.10 (3.44) 937.25 (3.77) 1124.70 (4.52) 500.00 (2.01) 24846.55 (100.00) Production cycle-II 1013.00 (4.03) 4604.12 (18.32) 296.05 (1.17) 15001.20 (59.76) 199.65 (0.79) 375.82 (1.49) 172.72 (0.68) 866.50 (3.45) 937.25 (3.73) 1124.70 (4.48) 508.00 (2.02) 25099.02 (100.00) Rainy season Production cycle-I 1000.00 (5.15) 3795.00 (19.58) 248.75 (1.28) 10556.75 (54.41) 155.25 (0.80) 290.70 (1.49) 145.50 (0.74) 647.67 (3.33) 937.25 (4.83) 1124.70 (5.79) 500.00 (2.57) 19401.57 (100.00) Production cycle-II 1008.00 (5.13) 3841.57 (19.57) 251.75 (1.28) 10695.10 (54.50) 157.23 (0.80) 295.75 (1.50) 150.02 (0.76) 655.97 (3.34) 937.25 (4.77) 1124.70 (5.79) 506.00 (2.58) 19623.90 (100.00) Total 6031.00 (4.65) 25234.69 (19.48) 1621.27 (1.25) 72827.06 (56.24) 1017.99 (0.78) 2030.53 (1.56) 937.08 (0.72) 4387.96 (3.38) 5623.50 (4.34) 6748.20 (5.21) 3019.00 (2.33) 129478.28 (100.00)

(Rupees)
Av. Cost per broiler 2.68 (4.64) 11.23 (19.48) 0.75 (1.24) 32.42 (56.24) 0.45 (0.78) 0.90 (1.56) 0.41 (0.71) 1.95 (3.38) 2.50 (4.33) 3.04 (5.27) 1.34 (2.32) 57.64 (100.00)

1.

Hired labour charges

2.

Cost of chicks

3. 4. 5. 6. 7. 8. 9. 10. 11.

Cost of Sawdust etc. Cost of feed Medicine and vaccine charges Electricity and water charges Miscellaneous charges Interest on working capital Depreciation on fixed capital Interest on fixed capital Imputed value of family labour Total

Figures in parentheses indicate percentage to total.

Table 5.8: Cost incurred on raising broilers in different seasons for large farm size group
S.No. Particulars Summer season Winter season Rainy season Total

(Rupees)
Av. cost per broiler

1 2 3 4 5 6 7 8 9 10 11

Hired labour charges Cost of chicks Cost of Saw dust etc. Cost of feed

Production Production Production Production Production Production cycle-I cycle-II cycle-I cycle-II cycle-II cycle-I 4066.67 4102.50 (4.97) 4066.67 (3.87) 4215.90 (3.98) 4066.67 (5.24) 4040.50 (5.22) (4.96) 15400.00 16380.00 21769.00 22012.00 15360.50 16416.22 (19.89) (19.99) (20.76) (20.81) (19.86) (19.85) 900.90 (1.09) 50859.90 (62.08) 915.23 (1.10) 51287.00 (62.15) 660.20 (0.80) 825.00 (0.99) 660.30 (0.80) 2994.6 (3.62) 1916.09 (2.32) 2299.31 (2.78) 438.05 (0.53) 82514.61 (100.00) 1088.45 (1.03) 1125.45 (1.06) 66890.20 (63.79) 791.60 (0.75) 989.50 (0.94) 791.60 (0.75) 67237.70 (63.59) 798.50 (0.75) 995.05 (0.94) 801.60 (0.75) 847.00 (1.09) 47817.00 (61.66) 616.00 (0.79) 770.00 (0.99) 616.00 (0.79) 842.00 (1.08) 47692.50 (61.66) 614.35 (0.79) 768.00 (0.99) 615.25 (0.79)

24558.91 (4.63) 107337.72 (20.25) 5719.03 (1.07) 331784.30 (62.61) 4135.85 (0.78) 5166.55 (0.97) 4139.95 (0.78) 19145.68 (3.61) 11496.54 (2.16)

2.38 (4.63) 10.40 (20.24) 0.55 (1.07) 32.16 (62.60) 0.40 (0.77) 0.55 (0.97) 0.44 (0.85) 1.85 (3.60) 1.11 (2.16)

Medicine and vaccine charges 655.20 (0.79) Electricity and water charges Miscellaneous charges Interest on working capital Depreciation on fixed capital Interest on fixed capital 819.00 (0.99) 655.20 (0.79) 2930.80 (3.57) 1916.09 (2.33) 2299.31 (2.80)

3812.81 (3.63) 3887.45 (3.67) 2762.64 (3.56) 2757.32 (3.56) 1916.09 (1.82) 1916.09 (1.81) 1916.04 (2.47) 1916.04 (2.47)

2299.31 (2.19) 2299.31 (2.17) 2299.31 (2.96) 2299.31 (2.97) 433.33 (0.41) 104848.56 (100.00) 441.67 (0.42) 105730.72 (100.00) 433.33 (0.55) 77543.99 (100.00) 430.50 (0.55) 77336.27 (100.00)

Imputed value of family labour 433.33 (0.52) TOTAL 81916.40 (100.00)

13795.86 1.33 (2.58) (2.60) 2610.21 0.25 (0.48) (0.49) 51.37 529890.55 (100.00) (100.00)

Figures in parentheses indicate percentage to total.

Table 5.7 gives cost incurred on raising broilers in different seasons for small size group. Two production cycles were practiced in each season i.e summer, winter and rainy season. Cost of feed accounted for maximum cost in all the seasons. Cost of feed accounted for 56.24 per cent followed by cost of chicks (19.48 per cent). Total annual cost incurred in small size group for raising broilers came out to be 1 lac 29 thousand. Table 5.8 shows cost incurred on raising broilers in medium size group in a year. Cost of feed accounted for maximum cost (59.67 per cent) followed by cost of chicks (19.91 per cent). Total cost incurred for medium size group for raising broilers came out to be 2 lac 96 thousand. 1 able shows the fragmented production cycles, two each in different seasons (summer, winter and rainy season). Table 5.9 highlights cost incurred on raising broilers in large size group in a year. Cost of feed and cost of chicks again accounted for maximum contribution in cost of production nearly 80 per cent. Cost of feed calculated to be 62.61 per cent and cost of chicks nearly 20 per cent. Average cost per broiler was also calculated for all the three size groups and it was Rs. 57.64, Rs. 56.45 and Rs. 51.37 in small, medium and large size group respectively. Table 5.10: Cost incurred in different size groups for average farms in broiler production during a year (2005-2006) (Rupees) S. No. Particulars 1 2 3 4 5 6 7 8 Hired Human Labour Cost of Chicks Cost of electrical items, saw dust etc. Cost of feed Medicine & vaccine charges Electricity and water charges Miscellaneous charges Interest on working capital Size Group Medium 15294.77 (5.16) 58940.00 (19.91) 3678.20 (1.24) 176600.50 (59.67) 2284.555 (0.77) 4199.35 (1.41) 2627.75 937.08 (0.72) (0.88) 4387.96 10480.9 (3.38) (3.54) Small 6031.00 (4.65) 25234.69 (19.48) 1621.27 (1.25) 72827.06 (56.24) 1017.99 (0.78) 2030.53 (1.56) Sample Average 14522.89 (4.81) 60416.36 (20.01) 3502.09 (1.16) 182947.40 (60.62) 2349.55 (0.77) 3668.14 (1.21) 2434.80 (0.80) 10723.30 (3.55)

Large 24558.91 (4.63) 107337.72 (20.25) 5719.03 (1.07) 331784.30 (62.61) 4135.85 (0.78) 5166.55 (0.97) 4139.95 (0.78) 19145.68 (3.61)

9 10 11

Depreciation on fixed capital Interest on fixed capital Imputed value of family labour TOTAL

5623.50 (4.34) 6748.20 (5.21) 3019.00 (2.33) 129478.28 (100.00)

8641.98 (2.92) 10370.40 (3.50) 2813.02 (0.95) 295931.51 (100.00)

11496.54 (2.16) 13795.86 (2.60) 2610.21 (0.49) 529890.55 (100.00)

8342.63 (2.76) 10011.16 (3.31) 2831.10 (0.93) 301749.42 (100.00)

Figures in parentheses indicate percentage to total. It is inferred from the table 5.10 that the major item of cost incurred in broiler production by all the three-size group of producers was amount spent on feed. It was the feed responsible for the gain in weight of broilers which ultimately increased the income of respondents. It was 56.24 per cent in small size group, 59.67 per cent in medium size group and 62.61 per cent in size group large. Cost of chicks formed second major component in cost of production. It is inferred from table that 19.48 per cent in small size group, 19.91 per cent in medium size group and 20.25 per cent of amount in large size group was incurred on the cost of chicks. Cost of chicks and feed accounted for nearly 80 per cent of the recurring expenditure. In conformity to present study Shanmugam and Mohan (1997) in their study on economic analysis of broiler production in Kamarayar district of Tamil Nadu revealed that cost of feed alone accounted for more than 60% of the total cost followed by cost of chicks, about 20%. Interest of working capital was calculated @ 4 per cent per year. Depreciation on fixed capital i.e. poultry pen and poultry equipments were calculated on a flat rate of 10 per cent per annum. Interest on fixed capital was calculated @ 12 per cent per year. There were six production cycles practiced by farm owners in a year i.e two each in summer, winter and rainy season. The total cost of production on average farm per year was calculated as Rs. 1 lac 29 thousand for small size group, Rs. 2 lacs 96 thousand for medium size group and Rs. 5 lacs 30 thousand for large size group.

Table 5.11: Average cost of production of broiler.

(Rupees)

S. No. 1 2 3

Size group 1 Small Medium Large Average

Average cost of Average no. of production / farm/ broilers/ farm/ year 2 year 3 129478.28 295931.51 529890.55 301749.42 2246.00 5242.00 10314.00 5597.83

Average cost of production/ broiler 4(2-3) 57.64 56.45 51.37 53.90

It is inferred from table 5.11 that cost of production per broiler was higher for small size group followed by medium and large size groups. This was also due to the higher overhead charges per unit on smaller farms. In conformity to the present study, Murthy (1986) in his study on resource productivity in agriculture observed that the cost of cultivation per acre was highest for marginal fanners and the lowest for large farmers. Table 5.12: Average cost incurred by different size groups. Cost of production per broiler (Rs) 57.64 56.45 51.37 Cost of Production per Kilogram (Rs) 41.17 38.93 34.70

S.No. 1 2 3

Size Group Small Medium Large

Average weight per broiler (Kg) 1.40 1.45 1.48

Per kilogram cost was also calculated as broiler is sold in kilogram basis. It is evident from the table 5.12 that average cost of production per kilogram of broiler was highest in small size group followed by medium & large size groups. It was Rs.41.17, Rs.38.93 and Rs 34.70 for small, medium and large size groups respectively. Week-wise cost of production was also calculated for a single broiler. As it was observed from the field that five weeks were taken by broilers to gain a weight of 1 kg or more. The week-wise cost of production per broiler is given in table 5.13.

Table: 5.13: Week-wise cost of production per broiler in different size groups. (Rupees)

Age in weeks S. No. 1 2 3 Size group Small Medium Large 1st 16.26 15.13 13.07 2nd 10.15 10.25 9.05 | 3rd 11.51 10.32 10.51 4th 10.13 10.81 9.86 5th 9.59 9.94 8.88 Total 57.64 56.45 51.37

The cost of production per broiler is seen higher in small size group as compared to medium and large size groups. The hypotheses framed as Large sized farm owners have relatively higher cost of production as compared to medium and small sized farm owners was tested by using analysis of variance technique. Results indicated that the calculated value of F = 0.44 was less than the table value of F = 3.88 at 5% level of probability with 2 & 12 degrees of freedom. So it was concluded that there is non significant difference between the three size groups and hence the hypotheses as framed is hereby rejected. (ANOVA table in appendix) Returns from broilers The returns from broilers include the main product i.e. sale of broiler (live or dressed), by product (manures, gunny bags). Broiler producers brought one day chicks upto its sale ie. 1.00-1.50 kg/ broiler six times a year. So, the returns from this enterprise were quick and continuous throughout the year. The present study is a study of one calendar year (20052006). i.e from raising of one day chick to its slaughter age throughout the year. The results of the returns analysis have been presented in the table 5.14 and also shown with the help of graph (Fig.5.3&5.4)

Table: 5.14: Costs and returns of broiler for different size groups. S. No. 1 2 3 4 5 6 7 8 9 10 Particulars Small Average total cost of production (in Rs) Average number of broilers/farm (no.s) Average weight per broiler (in kgs) Average price per broiler (in Rs) Total value (in Rs.) Value of manures (in Rs) Value of sale of gunny bags (in Rs) Gross return (in Rs) Net return (in Rs.) Net returns/broiler (In Rs.) Size Group Medium Large Sample Average

129478.28 295931.51 529890.55 301749.42 2246.00 1.40 66.74 1 5242.00 1.45 66.00 10314.00 1.48 65.85 5597.83 1.44 66.23

149898.04 345972.00 679176.90 369629.02 4059.50 1180.75 6571.00 1782.50 7685.50 2085.65 5954.25 1645.26

155138.29 354325.50 688948.05 377228.57 25660.01 11.42 58393.99 11.13 159057.50 15.42 75478.93 13.48

It is inferred from table 5.14 that there were two types of returns from broiler production i.e. one was main product and the other was by product. Main product includes the sale of broiler, which is meant for consumption by consumers. The by-product includes the manure which comes from the droppings of broiler while they are kept in poultry houses/ poultry pens. Gunny bags are also the sale of other items. It is observed from the table that the gross return per farm was Rs. 155138.29 for small size group followed by Rs 354325.50 for medium and Rs. 688948.05 for large size group. Maximum returns comes from the sale of main products. Net returns were calculated as Rs 25660.01. Rs 58393.99 and Rs 159057.50 for small, medium and large size groups, respectively. The hypothesis framed as Small size group farms have relatively higher profit than medium and large size group farms was tested by determining correlation and using F statistic. The results indicted that calculated value of F =3.14 is less than the table value of F= 5.14 at 5% probability level with 2 and 6 degrees of freedom. It means there is non

significant difference between the three size groups. Therefore the hypothesis as framed is hereby rejected.(ANOVA table in appendix)

Cost concepts and income measures The cost of production of broilers in the study area has been further examined by using the various cost concepts. These costs included cost A1, cost A2, cost B and Cost C. The costs A1 and A2 have been combined to represent cost A the distinction of cost A1, and A2 had no significance. The break-up of the total costs into cost A, cost B, and cost C has been evaluated for each size groups. Different income / profitability measures were derived by using cost concepts. The measures included net income, family labour income, farm business income and farm investment income. Net income has been calculated by deducting cost C from gross income. Farm business income has been calculated by deducting cost A1 and A2 from gross income. Family labour income was computed by deducting cost B from the gross income whereas farm investment income was obtained by adding interest on fixed capital to net income. The results are depicted on average farm basis and are presented in the tables 5.15-5.18.

Table 5.15: Measures of Cost concepts and farm profitability in small size group. (Rupees)

Seasons S. No. Particulars Summer season Production cycle I Measures of Cost concepts 1 2 3 Cost A1/A2 Cost B Cost C 18551.73 19676.43 20176.43 18701.67 19826.37 20331.37 23221.85 24346.55 24846.55 23466.32 24591.02 25099.02 17776.87 18901.55 19401.57 17992.70 19117.40 19623.90
11971.08 126459.28 129478.28

Winter season Production cycle II

Rainy season Production Production cycle I cycle II

Total

Production Production cycle II cycle I

Measures of Farm profitability/Income measures 1 2 3 4 5 6 Gross Income Net Income Farm Business Income Farm Investment Income Family Labour Income Benefit Cost Ratio 26234.57 6058.14 7682.84 7182.84 6558.14 1.30:1 26501.53 6170.16 7799.86 7294.86 6675.16 1.31:1 26901.97 2055.43 3680.12 3180.13 2555.42 1.08:1 27702.85 2603.83 4236.53 3728.53 3111.83 1.10:1 23698.45 4296.88 5921.58 5421.58 4796.90 1.22:1 24098.89 4474.99 6106.19 5599.69 4981.49 1.22:1 155138.29
25660.01 35427.21 35427.21 28679.01 1.19:1

Table 5.16: Measures of Cost concepts and farm profitability in medium size group. (Rupees)

Seasons S. No. Particulars Summer season Production cycle I Measures of Cost concepts 1 2 3 Cost A1/A2 Cost B Cost C 45414.88 47143.28 47609.94 45711.8 47440.28 47911.62 51919.15 53643.55 54114.21 52511.71 54240.11 54712.16 43415.59 45143.99 45610.65 43774.88 45503.28 45972.93
282748.09 293118.49 295931.51

Winter season Production cycle II

Rainy season Production Production cycle I cycle II

Total

Production Production cycle II cycle I

Measures of Farm profitability/Income measures 1 2 3 4 5 6 Gross Income Net Income Farm Business Income Farm Investment Income Family Labour Income Benefit Cost Ratio 58812.24 11202.30 13397.36 12930.70 11668.96 1.23:1 59604.24 11692.62 13892.36 13421.02 12163.96 1.24:1 61584.24 7470.03 9665.09 9198.43 7936.69 1.13:1 61980.24 7268.08 9468.53 8996.48 7740.13 1.13:1 55842.24 10231.59 12426.65 11959.99 10698.25 1.22:1 56502.24 10529.31 12727.36 12257.71 10998.96 1.22:1
354325.50 58393.99 71577.41 68764.39 61207.01 1.20:1

Table 5.17: Measures of Cost concepts and farm profitability in large size group. (Rupees) Seasons S. No. Particulars Summer season Production cycle I Measures of Cost concepts 1 2 3 Cost A1/A2 Cost B Cost C 79183.76 81483.07 81916.40 79777.25 82076.56 82514.61 102115.92 104415.23 104848.56 102989.74 105289.05 105730.72 74811.35 77110.66 77543.99 74606.46 76905.77 77336.27
513484.48 527280.34 529890.5

Winter season Production cycle II

Rainy season Production Production cycle I cycle II

Total

Production Production cycle II cycle I

Measures of Farm profitability/Income measures 1 2 3 4 5 6 Gross Income Net Income Farm Business Income Farm Investment Income Family Labour Income Benefit Cost Ratio 108832.31 | 110149.31 26915.91 29648.55 29215.22 27349.24 1.32:1 27634.70 30372.06 29934.01 28072.75 1.33:1 131221.31 26372.75 29105.39 28672.06 26806.08 1.25:1 132670.01 26939.29 29680.27 29238.60 27380.96 1.25:1 103169.21 25625.22 28357.86 27924.53 26058.55 1.33:1 102905.81 25569.54 28299.35 27868.85 26000.04 1.33:1
688948.05 159057.50 175463.57 172853.36 161667.71 1.30:1

Table 5.15 depicts measures of cost concepts and farm profitability in small size group. Cost C in small size group came out to be Rs. 1 lac 29 thousand. Gross income was calculated for different seasons and in total it was calculated as Rs. 1 lac 55 thousand with Net income as Rs.25660.01. Farm Business income. Farm Investment income and Family Labour income was also calculated per annum and it came out to be Rs.35427.21, Rs.32408.21 and Rs.28679.01 respectively. Benefit-Cost ratio was calculated and it came out to be 1.19:1.

Table 5.16 depicts measures of cost concepts and farm profitability in medium size group. Cost C in medium size group came out to be Rs. 2 lac 96 thousand. Gross income was calculated for different seasons and in total it was calculated as Rs. 3 lac 54 thousand with Net income as Rs.58393.99. Farm Business income, Farm Investment income and Family Labour income was also calculated per annum and it came out to be Rs.71577.41, Rs.68764.39 and Rs.61207.01 respectively. Benefit-Cost ratio was calculated and it came out to be 1.20:1.

Table 5.17 depicts measures of cost concepts and farm profitability in large size group. Cost C in large size group came out to be Rs. 5 lac 30 thousand. Gross income was calculated for different seasons and in total it was calculated as Rs. 6 lac 89 thousand with Net income as Rs.l lac 59 thousand. Farm Business income, Farm Investment income and Family Labour income was also calculated per annum and it came out to be Rs. 1 lac 75 thousand, Rs. 1 lac 73 thousand and Rs. 1 lac 62 thousand respectively. Benefit-Cost ratio was calculated and it came out to be 1.30:1.

Table 5.18 Cost concept and measures of farm profitability per average farm. (Rupees) S.No. Particulars Size Group Medium 282748.09 293118.49 Sample Average 288907.32 298918.49 301749.60

Small 119711.08 126459.28 129478.28

Large 513484.48 527280.34

Measures of cost concepts 1 2 3 Cost A1/A2 Cost B Cost C

295931.551 529890.55

Measures of farm profitability/income measures 1 2 3 4 5 6 Gross Income Net Income Family Labour Income Farm Business Income Farm Investment Income Benefit Cost Ratio 155138.29 25660.01 28679.01 35427.21 32408.21 1.19:1 354325.50 58393.99 61207.01 71577.41 68764.39 1.20:1 688948.05 159057.50 161667.71 175463.57 172853.36 1.30:1 377228.54 75478.93 78310.04 88321.21 85490.10 1.25:1

The different measured used to evaluate farm profit were net income, farm business income, family labour income and farm investment income. Net income was calculated by deducting cost C over gross income. Net income computed for small, medium and large size group came out to be Rs 25660.01, Rs 58393.9 and Rs 159057.50 respectively (Table 5.18). Farm business income calculated for small, medium and large came out to be Rs.35427.21, Rs 71577.41 and Rs. 175463.57 respectively. Family labour income was calculated as Rs.28679.01, Rs. 61207.01 and Rs. 161667.71 for small, medium and large size groups

respectively. Farm investment income was computed as Rs.32408.21 for small size group, Rs.68764.39 for medium size group and Rs. 172853.36 for large size group. Farm business income was highest followed by farm investment income among income/ profitability measures in all the three size groups. Benefit Cost ratio calculated for all the three size groups and it came out as 1.19:1, 1.20:1 and 1.30:1 for small, medium and large size groups respectively. It will be further cross examined in capital productivity analysis.

Cost and returns per 100 broilers

Costs incurred and return analysis was also computed for 100 broilers in all the three size groups as it may give an birds eye view to the entrepreneurs about the cost structure and profitability in broiler enterprise. Likewise in the field crops cost and returns are calculated on per hectare basis and it was felt necessary to calculate cost and returns on per 100 basis as it will give uniformity to all size groups. In the following tables (fable no.5.19, 5.20 and 5.21) measures of cost concepts and farm profitability have been calculated for small, medium and large size group separately that too season wise and cycle wise. Results are presented in the following tables.

Table 5.19: Measures of Cost concepts and farm profitability per 100 broilers in small size group. (Rupees)

Seasons S. No. Particulars Summer season Production cycle I Measures of Cost concepts 1 2 3 Cost A1/A2 Cost B CostC 4857.47 5150.89 5281.78 4870.22 5163.11 5294.62 5864.10 6148.11 6274.38 5837.39 6117.16 6243.53 5152.71 5478.71 5623.64 5170.31 5493.50 5639.05 31752.20 33551.48 34357.00 Production cycle II Winter season Production cycle I Production cycle II Rainy season Production cycle I Production cycle II Total

Measures of Farm profitability/Income measures 1 2 3 4 5 6 Gross Income Net Income Farm Business Income Farm Investment Income Family Labour Income Benefit Cost Ratio 6903.83 1622.05 2047.36 1922.51 1752.94 1.30:1 6901.44 1606.82 2031.22 1899.71 1738.33 1.30:1 6897.94 623.56 1033.84 924.02 749.02 1.08:1 6891.25 647.72 1053.86 940.61 774.09 1.10:1 6929.37 1305.73 1776.66 1606.19 1450.66 1.22:1 6924.96 1285.91 1754.65 1578.80 1431.46 1.22:1 41448.79 7091.79 9696.59 8871.84 7897.31 1.19:1

Table 5.20: Measures of Cost concepts and farm profitability per 100 broilers in medium size group. (Rupees)

Seasons S. No. Particulars Summer season Production cycle I Measures of Cost concepts 1 2 3 Cost A1/A2 Cost B Cost C 5184.34 5381.65 5434.92 5182.75 5378.71 5432.155 5674.22 5863.12 5914.12 5720.22 5908.50 5959.93 5230.79 5439.03 5495.25 5242.50 5449.49 5505.74 32234.82 33420.50 I 33742.11 Winter season Production cycle II Rainy season Production Production cycle I cycle II Total

Production Production cycle II cycle I

Measures of Farm profitability/Income measures 1 2 J 4 5 6 Gross Income Net Income Farm Business Income Farm Investment Income Family Labour Income Benefit Cost Ratio 6760.02 1325.10 1575.68 1522.95 1378.37 1.23:1 6757.85 1325.70 1575.10 1521.66 1379.14 1.24:1 6752.65 838.53 1078.43 1036.38 889.53 1.13:1 6751.66 791.73 1031.44 987.69 843.16 1.13:1 6768.75 1273.50 1537.96 1471.35 1329.72 1.22:1 6766.73 1260.99 1524.23 1456.95 1317.24 1.22:1 40557.66 6815.55 8322.84 7991.31 7137.16 1.20:1

Table 5.21: Measures of Cost concepts and farm profitability per 100 broilers in large size group. (Rupees) Seasons S.No. Particulars Summer season Production cycle I Measures of Cost concepts 1 2 3 Cost A1/A2 Cost B Cost C 4834.17 4974.54 5001.01 4840.85 4980.37 5006.95 5159.97 5276.16 5298.05 5175.36 ! 5290.90 5313.10 4857.87 5007.18 5035.32 4850.87 5000.37 5028.36 29719.09 30529.52 30682.79 Winter season Production cycle II Rainy season Production Production cycle I cycle II Total

Production Production cycle II cycle I

Measures of Farm profitability/Income measures 1 2 3 4 5 6 Gross Income Net Income Farm Business Income Farm Investment Income Family Labour Income Benefit Cost Ratio 6685.03 1684.02 1850.86 1817.77 1710.49 1.32:1 6683.81 1676.86 1842.96 1816.38 1703.44 1.33:1 6667.74 1369.69 1507.77 1503.44 1391.58 1.25:1 6666.83 1353.73 1491.47 1493.25 1375.93 1.25:1 6690.61 1655.29 1832.74 1789.04 1683.43 1.33:1 6690.88 1662.52 1840.01 1802.04 1690.51 1.32:1 40084.90 9402.11 10365.81 10239.23 9555.38 1.30:1

Measures of cost concepts and farm profitability were also calculated per 100 broilers in all the three size groups to give an idea about the profitability in broiler enterprise keeping same yardstick for all the three size groups. Table 5.19 gives measures of cost concepts and farm profitability per 100 broilers in small size group per year. Cost C was calculated and it came out to be Rs. 34357.00. Gross income was computed and it came out to be Rs. 41448.79 with the net income as Rs. 7091.79. Farm Business income, Farm Investment income and Family Labour income was also calculated per 100 broilers and it came out Rs. 9696.59, Rs.8871.84 and Rs.7897.31 respectively. Benefit-cost ratio for small size group came out to 1.19:1.

Table 5.20 gives measures of cost concepts and farm profitability per 100 broilers in medium size group per year. Cost C was calculated and it came out to be Rs. 33742.1 1. Gross income was computed and it came out to be Rs. 40557.66 with the net income as Rs. 6815.55. Farm Business income, Farm Investment income and Family Labour income was also calculated per 100 broilers and it came out Rs. 8322.84,Rs.7991.31 and Rs.7137.16 respectively. Benefit-cost ratio for medium size group came out to 1.20:1.

Table 5.21 gives measures of cost concepts and farm profitability per 100 broilers in large size group per year. Cost C was calculated and it came out to be Rs. 30682.79. Gross income was computed and it came out to be Rs. 40084.90 with the net income as Rs. 9402.11. Farm Business income. Farm Investment income and Family Labour income was also calculated per 100 broilers and it came out Rs. 10365.81, Rs. 10239.23 and Rs.9555.38 respectively. Benefit-cost ratio for large size group came out to 1.30:1.

Table 5.22: Measures of cost concepts and farm profitability per 100 broilers. (Rupees) Size Group S.No. Particulars Measures of cost concepts 1 2 3 Cost A1/A2 Cost B Cost C 31752.20 33551.48 34357.00 32234.82 33420.50 33742.11 29719.09 30529.52 30682.79 31320.08 32626.41 33080.39 Small Medium Large

Sample Average

Measures of farm profitability/Income measures 1 2 3 4 5 6 Gross Income Net Income Farm Business Income Farm Investment Income Family Labour Income Benefit-Cost Ratio 41448.79 7091.79 9696.59 8871.84 7897.31 1.19:1 40557.66 6815.55 8322.84 7991.31 7137.16 1.20:1 40084.90 9402.11 10365.81 10239.23 9555.38 1.30:1 40753.94 7673.55 9433.86 8977.15 8127.53 1.24:1

The measures of cost concepts and measures of profitability/income measures were calculated for 100 broilers in all the size groups. Results reveal that cost incurred on raising 100 broilers or Cost C came out to be Rs. 34357.00, Rs.33742.11 and Rs.30682.79 on small, medium and large size groups respectively (Table 5.22). Gross income calculated for small size group came out to be Rs.41448.79, for medium size group as Rs.40557.66 and for large size group as Rs.40084.90. Net income which was calculated by deducting cost C from gross income and was found out to be Rs.7091.79, Rs.6815.55 and Rs.9402.11 for small, medium and large size groups respectively. Farm business income, farm investment income and family labour income was also calculated for all the three size groups and is depicted in table no.5.22. Benefit Cost ratio was also calculated for all the three size groups.

Economic viability of broiler production or Capital productivity analysis:-

Economic viability or capital productivity analysis brings out the efficiency of capital use in production. The different capital productivity analysis techniques are pay back period, benefit-cost ratio, net present value and internal rate of return. Here only two techniques i.e. benefit-cost ratio and net present value are depicted in table 5.21 and benefit-cost ratio is also expressed in figure 5.5 (discounted as well as undiscounted)

Table 5.23: Benefit-cost ratio (BCR) and Net present value (NPV) in broiler production. (Rupees per farm)

Size group Small Medium Large

Total cost of production 129478.28 295931.51 529890.55

Benefit /Return 155138.29 354325.50 688948.05

Discount coefficient @ 10% 0.909 0.909 0.909

Present value at 10% discounting Cost 117695.75 269001.74 481670.51 Benefit 141020.70 322081.87 626253.77

Small size group: Benefit cost ratio = Present value of benefit divided by present value of cost Present value of benefit = Rs 141020.70 Present value of cost = Rs 1 17695.75 Benefit cost ratio (BCR) at 10% discounting rate = 1.19: 1 Benefit cost ratio (BCR) undiscounted = 1.19:1 Net present value = Present value of benefit minus present value of cost. = Rs 23324.95 Medium size group: Benefit cost ratio = Present value of benefit divided by present value of cost Present value of benefit = Rs 322081.87 Present value of cost = Rs 269001.74 Benefit cost ratio (BCR) at 10% discounting rate = 1.20:1 Benefit cost ratio (BCR) undiscounted = 1.20:1 Net present value = Present value benefit minus present value of cost = Rs 53080.13 Large size group: Benefit cost ratio = Present value of benefit divided by present value of cost Present value of benefit = Rs 626253.77 Present cost of cost = Rs 43 1670.51 Benefit cost ratio (BCR) at 10% discounting rate = 1.30:1 Benefit cost ratio (BCR) undiscounted = 1.30:1 Net present value = Present value of benefit minus present value of cost = Rs 144583.26 It is inferred from above calculations that the benefit cost ratio (BCR) was 1.19:1 undiscounted as well as at discounting rate of 10 per cent in small size group. The net present value at 10 per cent discounting rate for small size group was Rs 23324.95 per farm. The benefit cost ratio (BCR) for medium size group was computed as 1.20: 1 undiscounted as well as at 10 per cent discounting rate. The net present value at 10 per cent discounting rate came out to be Rs 53080.13 per farm for medium size group. For the large size group the benefit cost ratio was calculated as 1.30: 1 for undiscounted as well as at 10 per cent discounting rate. The net present value at 10 percent discounting rate was found to be Rs 144583.26 per farm in size group large.

MARKETING OF BROILERS Agricultural marketing plays an important role not only in stimulating production and consumption, but in accelerating the pace of economic development. Marketing also innovates producer or entrepreneur to make necessary changes in marketing his produce. Its dynamic functions are of primary importance in promoting economic development. For this reason it has been described as the most important multiplier of agricultural development. An efficient agricultural marketing system leads to the optimization of resource use and output management. It also ensures higher levels of income for the farmers / producers / entrepreneurs by reducing the number of middlemen or by restricting the commission on marketing services and the malpractices adopted by them in the marketing of their commodities. An efficient system guarantees the farmers/ producers better prices for their commodities and induces them to invest their surplus in the purchase of modern inputs so that production and efficiency may increase. Broilers are considered important subsidiary occupation of Indian agriculture. Our country has a great potential in increasing its production and it can be a good foreign exchange earner by exporting dressed broiler to other countries. Most of the broilers produced in Uttar Pradesh especially in study area, Allahabad district, finds its place in restaurants, five star hotels, marriages, functions, parties and consumption outlets throughout the state & other neighbouring slates like Madhya Pradesh, Bihar, Delhi etc. Marketing of Broilers has been largely in the hands of private enterprises and there exists a long chain of middlemen between the producer and ultimate consumer. The main marketing agencies involved in the marketing of broilers in Allahabad district arc itinerant traders, wholesalers, hotels and institutions and retailers. This whole process makes it complex for the producer to increase his herd or to increase the number of birds for the reason being less share of producer in consumers rupee. The marketing functionaries expropriate a substantial proportion of the profit and both the farm owner / producer as well as consumer suffer. The field study revealed that farm owners largely sold their produce through itinerant trader, wholesalers, retailers and hotels and institutions in descending order. The disposal of broiler through different agencies involved in the marketing of broiler in the study area has been presented in table 5.22. Table 5.24: Disposal of broilers through different agencies.

S.No. 1 2 3 4

Disposal Agency Itinerant trader Wholesaler Retailer Consumer (Direct sale) Total

No. of producers 22 (18.33) 61 (50.83) 27 (22.50) 10(8.34) 120 (100)

Figures in parentheses indicate percentage to total

Marketing channels

The following channels were identified as the main marketing channels of broilers. 1. Channel I = Producer 2. Channel 11 = Producer 3. Channel 111 = Producer 4. Channel IV = Producer 5. Channel VI = Producer Consumer Retailer Wholesaler Itinerant trader - Consumer - Retailer - Consumer - Retailer - Consumer

Wholesaler-Hotels& Institutions - Consumer

PRODUCER

ITINERANT TRADER WHOLESALER

RETAILER

HOTELS & INSTITUTONS

CONSUMER

Figure 5.6: Marketing mechanism model of broilers

CHANNEL WISE MARKETING COST, MARGINS AND PRICE SPREAD IN THE MARKETING OF BROILERS. The marketing cost, margin, producers share in consumers rupee and marketing efficiency in different marketing channels of broiler, have been presented in the following tables.

Channels I: Producer - Consumer Table 5.25: Marketing cost, margin, producers share in consumers rupee and marketing efficiency of broilers.

S.No. Particulars 1 2 a) b) c) 3 4 5 Producer sale price Total expenses incurred by the producer Cutting, Packing etc. Weighing / Taulai Miscellaneous charges Net price received by producer Producers share in consumers rupee (in percentage) Index of marketing efficiency (shepherds method

Amount in Rs / kg 55.00 2.00 0.50 0.50 1.00 53.00 96.36 27.50

It is inferred from the table 5.25 that the producers sale price for 1 kg of broiler (live) was Rs 55.00 The total marketing cost borne by the producer was Rs 2.00. The producers share in consumers rupee was worked out to be 96.36 per cent as it remained highest, as there was no intermediary involved in this channel. However only 10 per cent of the producers sold their produce / commodity through this channel in the study area. The marketing efficiency by shepherds index method was calculated as 27.50. Marketing efficiency was higher on account of low marketing expenses.

Channels II: Producer Retailer Consumer Table 5.26: Marketing cost, margin, producers share in consumers rupee and marketing efficiency of broilers.

S.No. 1 2 a) b) c) 3 4 a) b) c) 5 6 7 8 9

Particulars Amount in Rs / kg Producers sale price 53.00 Total expenses borne by producer 3.75 Transportation 1.25 Weighing / Taulai 1.00 Miscellaneous charges (packing, grading etc.) 1.50 Net price received by producer 49.25 Total expenses borne by retailer 2.75 Taulai / Weighing 0.75 Transportation 1.00 Miscellaneous Charges (Packing, Handling etc.) 1.00 Retailers sale price 60.50 Net price received by retailer 57.75 Margin obtained by retailer 4.75 Producers share in consumers rupee (in percentage) 81.40 Index of marketing efficiency (Shepherds method) 5.37

The table 5.26 reveals that the producers selling price to retailer was Rs 53.00 for one kg of broiler. The marketing charges borne by the producer were estimated as Rs 3.75. The expenses incurred by the retailer were calculated as Rs 2.75 which included weighing charges, transportation charges, packing and handling charges etc. Prod ucers share in consumers rupee in this channel was 81.40 per cent. The marketing efficiency as calculated by shepherds method was 5.37.

Channels III: Producer Itinerant Trader Retailer Consumer Table 5.27: Marketing cost, margin, producers share in consumers rupee and marketing efficiency of broilers.

S.No. 1 2 a) b) c) 3 4 5 a) b) c) d) 6 7 8 9 a) b) c) 10 11 12 13

Particulars Producers sale price Total expenses incurred by producer Taulai / weighing charges Handling charges i.e. labour etc. Miscellaneous charges Net price received by producer Itinerant trader sale price Total expenses borne by itinerant trader Transportation Weighing charges Handling & packing charges Miscellaneous charges Net price received by itinerant trader Itinerant traders margin Retailers sale price Total expenses incurred by retailer Transportation Weighment charges / Labour charges Miscellaneous charges Net price received by retailer Retailers margin Producers share in consumers rupee (in percentage) Index of marketing efficiency (shepherds method)

Amount in Rs/kg 50.00 2.00 0.50 1.00 0.50 48.00 54.75 2.00 0.50 0.50 0.50 0.50 52.75 2.75 62.25 1.75 0.50 1.00 0.25 60.50 5.75 77.10 4.36

The above table 5.27 indicates that the producers selling price to itinerant trader was Rs 52.00 per kg. It is evident from the table that the retailer was earning reasonable margin in this channel as he was offering services to consumers. The marketing charges borne by producer were found out to be Rs.2.00, by itinerant trade were Rs. 2.00 and by retailer were Rs. 1.75, which included weighing, transportation, handling and miscellaneous charges. Producers share in consumers rupee in channel was 77.10 percent. The marketing efficiency as calculated by shepherds method was 4.36. Channels IV: Producer Wholesaler Retailer Consumer

Table 5.28: Marketing cost, margin, producers share in consumers rupee and marketing efficiency of broilers. S. No. 1 2 a) b) c) d) 3 4 5 a) b) c) d) 6 7 8 9 a) b) c) d) 10 11 12 13 Particulars Producers sale price Total expenses borne by producer Transportation Weighing / Taulai Handling and labour charges Miscellaneous charges Net price received by producer Wholesalers sale price Total expenses borne by wholesalers Transportation Weighing / Taulai Handling and labour charges Miscellaneous charges Net price received by wholesaler Wholesalers margin Retailers sale price Total expenses incurred by retailer Transportation Weighing / Taulai Handling and labour charges Miscellaneous (storage) charges Net price received by retailer Retailers margin Producers share in consumers rupee(in percentage) Index of marketing efficiency (Shepherds method) Amount in Rs/ kg 52.50 1.50 0.50 0.50 0.25 0.25 51.00 56.25 1.75 1.00 0.25 0.25 0.25 54.50 2.00 65.00 3.25 0.50 0.50 1.50 0.75 61.75 5.50 78.46 4.64

It is inferred from the table 5.28 that producers sale price to wholesaler was Rs 52.50 per kg. Net price received by producer was calculated as Rs 51.00 per kg after meeting some expenses like transportation, weighing, handling and miscellaneous charges. Wholesalers

sale price to retailer was Rs 56.25. Net price received by wholesaler was Rs 54.50 after incurring some marketing expenses. The consumers purchase price or retailers sale price was Rs 65.00 per kg in this channel. Net price received by retailer was calculated as Rs 59.75 after incurring Rs 3.25 expenses on transportation, weighing, Handling, labour and miscellaneous charges. The producers share in consumers rupee was calculated as 78.46 per cent. The marketing efficiency calculated was 4.64 as calculated by shepherds index formula.

Channel V: Producer-Wholesaler- Hotels and Institutions - Consumer

Table 5.28: Marketing cost, margin, producers share in consumers rupee and marketing efficiency of broilers.

S. No. Particulars 1 2 a) b) c) d) 3 4 5 a) b) c) d) 6 7 8 9 a) b) Producers sale price Total expenses borne by producer Transportation Weighing handling charges Labour charges Miscellaneous charges Net price received by producer Wholesalers sale price Total expenses borne by wholesalers Transportation charges to hotel outlet Weighing / Taulai Handling, labour & packing charge Miscellaneous charges Net price received by wholesaler Wholesalers margin Hotel & Institutions sale price Total expenses borne by Hotel & Institutions Dressing & cooking charges Handling and catering charges

Amount in Rs/ kg 54.00 2.00 0.75 0.25 0.50 0.50 52.00 58.75 2.00 0.60 0.45 0.45 0.50 56.75 2.75 90.00 15.75 6.50 5.75

c) 10 11 12 13

Miscellaneous (storage) charges Net price received by Hotel & Institutions Hotel & Institutions margin Producers share in consumers rupee (in percentage) Index of marketing efficiency (Shepherds method)

3.50 74.25 15.50 57.78 2.36

It is inferred from the table 5.29 that producers sale price of live bird was Rs. 54.00 per kilogram, but the net price received by producer was Rs. 52.00,as Rs. 2.00 were his expenses to be borne on weighing, transportation, handling charges etc. Wholesalers sale price to hotels & institutions were Rs.58.75 after meeting expenses of Rs.2.00 on transportation, weighing & miscellaneous charges. Wholesalers margin in this channel was computed as Rs.2.75.Hoteliers sale price to consumer was Rs. 90.00.The expenses borne by Hotels was computed as Rs. 15.75 on dressing, cooking, catering and handling charges. .Hoteliers margin was Rs. 15.50. The producers share in consumers rupee was calculated as 57.78 per cent. The marketing efficiency calculated was 2.36 as calculated by shepherds index formulae.

Table 5.30: Price spread in different marketing channels of broilers. Channels III IV 48.00 (77.10) 50.00 80.32) 2.00 (3.21) 2.75 (4.41)

S. No. A. Producer

Particulars

I 53.00 (96.36) -

II 49.25 (81.40) -

V 1 52.00 (57.78) -

Net price received by producer B Itinerant trader I 1 2 3 Purchase price Marketing cost Marketing martin

51.00 (78.46)

C. Wholesaler 1 2 3 Purchase price Marketing cost Marketing margin 52.50 (80.76) 54.00 (60.00) 1.75 (2.69) 2.00 (2.23) 2.00 (3.07) 2.75 (3.05) 58.75 (65.27) 15.75 (17.50) 15.50 (17.23)

D. Hote1s & Institutions 1 Purchase price 2 Marketing cost 3 Marketing margin E. Retailer 1 2 3 F G
[

Purchase price Marketing cost Marketing margin Purchase price of consumer Gross price spread

55.00 (100) 2.00 (3.63)

53.00 54.75 56.25 (86.53) (87.60) (87.95) 2.75 1.75 (2.81) 3.25 (5.00) (4.54) 4.75 5.75 (9.23) 5.25 (8.46) (7.85) 60.50 62.25 (100) 65.00 (100) 90.00 (100) (100) 11.25 14.25 38.00 (42.22) 14.00 (21.53) (18.59) (22.89) |

Figures in parentheses indicate percentage to purchase price of consumer. Table 5.30 shows price spread in different marketing channels of broilers. Five channels were studied for the present study. In first channel (Producer-Consumer), purchase price of consumer was Rs. 55.00 with net price received by producer as Rs. 53.00,Rs. 2.00 as gross price spread. In channel II (Producer-Retailer-Consumer), purchase price of consumer was Rs. 60.50, with the gross price spread as Rs. 11.25. Net price received by producer in channel II was found out to be Rs. 49.25. In marketing channel no III (Producer-Itinerant trader-Retailer-Consumer),

The gross price spread came out to be Rs. 14.25, with the purchase price of consumer as Rs. 62.25. The net price received by producer in this channel was Rs.48.00. Marketing channel no. IV studied was Producer-Wholcsaler-Retailer-Consumer. In this channel purchase price of consumer being Rs.65.00 with the gross price spread as Rs. 14.00. The net price received by producer in this channel was Rs. 51.00. In channel no. V (Producer-Wholesaler-Hotels & Institutions-Consumer), the gross price spread was Rs. 38.00, with the purchase price of consumer as Rs.90.00. The reason for high purchase price of consumer as well as price spread was due to high marketing cost and marketing margin incurred by hotels & institutions. The net price received by producer in this channel (channel V) came out to be Rs. 52.00. Table 5.31: Producers share in consumers rupee and marketing efficiency in different marketing channels of Broilers. Channels I II III IV V

Particulars Producers share in consumers rupee Index of marketing efficiency (Shepherds index)

96.36 81.40 77.10 78.46 57.78 27.50 5.37 4.36 4.64 2.36

It is observed from the above tables that the maximum margins were taken by Hotels and Institution followed by retailers. The maximum marketing costs were also incurred by the same intermediaries. The gross price spread was highest in channel V, due to the fact the huge marketing cost incurred by hotels and institutions in making broiler ready to serve to consumers. The producers share in consumers rupee was highest in direct channel i.e. Producer consumer (channel -I), followed by channel II, channel IV, and channel III (Table 5.31). The producers share in consumer rupee was low in channel V, because of the huge margin received by hotels and Institution as they also incur huge marketing cost. It is also observed that as the number of intermediaries reduced, the marketing efficiency increased. Chauhan (1999) also confirmed the findings that the price received by the producer declined with the increase in the number of intermediaries in marketing channels. As the produce or product moved from the wholesaler to distant markets, the marketing costs increased and the marketing efficiency decreased. The hypotheses framed as producers share in consumers rupee is more in direct channel (Producer- Consumer) than other channels was tested by using formulae of producers share in consumers rupee and it was found that direct channel was having

producers share in consumers rupee of 96.36 per cent which was highest than other four channels studied. Therefore the hypotheses as framed is hereby accepted. The gross prices spread, producers share in consumers rupee and marketing efficiency in different marketing channels of boilers hare also been shown with their help of graphs (fig. 5.7, 5.8 & 5.9).

Constraints / problems in the production and marketing of Broilers The various problems related to production and marketing of broilers faced by producers, were identified and these have been presented in the tabular form below. Table 5.32: Problems faced by Broiler farmers. Number of Per cent respondents 93 90 88 49 21 95 85 101 32 35 54 98 75 25 50 105 105 1 90 80 77.50 75.00 73.30 40.84 17.50 79.17 70.84 84.17 26.67 29.17 45.00 81.67 62.50 20.84 41.66 87.50 87.50 1 75.00 66.67

S.No. Problems/Constraints A. Production led constraints Non-availability of feed supplements during critical periods No extension facilities Inadequacy of poultry expert Weak research base Improper weighment Lack of availability of quality chick breeds Insufficient help from animal husbandry department No access to financial facilities particularly during initial years of establishment No risk cover by government B. Market led constraints No regulated market Discouraging market mechanism Lack of government intervention Non-availability of credit facilities Lack of storage facilities Delay in payments Price fluctuations Insufficient export facilities 1 High cost of transportation No sale promotion schemes

1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 10

Regarding the production side the broiler farmers were not given ample support from the government led agencies, which included non-availability of one day old chicks timely and at concessional rates. The producers were forced to procure chicks from private firms that too on high rates. Chicken feed was not readily available to producers, as feed used to play vital role in the weight gaining of broilers, which ultimately is directly proportional to profitability of broiler farm owners. Outbreak of disease like bird flu etc. were also hurting the producers interest as mere rumour about disease outbreak sharply declines the demand of broiler meat consumption, which ultimately reduced the profit of producers. Producers sometimes insure losses that too huge losses. These huge losses were not compensated by the government led agencies. Risk involved in the enterprise was also seen a factor responsible for disinterest of the entrepreneurs towards this trade/ enterprise. Low production of broilers was also due to unawareness of the farmers towards raising of broilers on scientific lines. They were still having hatcheries as well their broiler units based on traditional lines. Among the market led constraints prices fluctuations was viewed as a core problem by majority of the producers / respondents. The prices of broilers witness day to day fluctuation, which was causing serious concern to producers and marketers. Discouraging market mechanism and lack of government intervention was expressed as the serious problem. Price fluctuations and insufficient export facilities were viewed by the farm owner as other major problems.

Chapter-VI

Summary & Conclusion

SUMMARY AND CONCLUSION

The present study entitled, "Economics of Production and Marketing of broilers in Allahabad district, Uttar Pradesh" was carried out with the following specific objectives. 1. To work out the costs and returns in broiler production in different size groups. 2. To evaluate the measures of farm profit in different size groups. 3. To study different marketing channels involved in the marketing of broilers. 4. To find out the producer's share in consumer's rupee,price spread and marketing efficiency in different channels of marketing. 5. To study the problems faced by the broiler farmers of the selected area and suggest suitable measure to curb them. The research methodology consisted of multistage sampling design. In the first stage, Allahabad district was selected purposively, as researcher was well known to the area and also broiler farming is practiced on a commercial scale in Allahabad district. It was followed by the selection of two blocks also purposively, owing to their highest number of broiler farms. The blocks selected for the study were Shankargarh and Chaka. In the third stage, the villages were selected. A list of all the broiler rearing villages of Shankargarh and Chaka blocks were obtained and arranged in ascending order according to their number of broiler farms. Thereafter out of total thirty eight broiler rearing villages of block Shankargarh, a

sample of ten percent (4 villages) and out of total forty four broiler rearing villages of block Chaka, a sample of ten percent (4villages) were selected randomly. In all eight villages were selected from these two blocks, which formed the third stage of sampling. In the fourth stage a complete list of all broiler farm owners of the selected villages was obtained and they were categorized into three size group on the basis of number of broiler farms. Small size group comprised of those rearers having below 500 number of birds in their herd, medium group and large group broiler farmers were those having 500 1000 birds, and above 1000 birds respectively in their flock during the course of study. A sample of ten percent (10%) of the broiler farm producers from each selected village, thus a total of 120 broiler farm producers (small = 45, medium = 40, Large = 35) were randomly selected for the present study. This practice formed the fourth stage of sampling. Finally, Allahabad market where broilers were brought and sold was selected purposively. The different market functionaries like Itinerant trader, Wholesaler, Co-operative society, Hotels and Institutions, Retailer etc, were selected randomly. Survey method was used for the collection of primary data. The producers were contacted on regular visits and data were collected from them with the help of pre tested and pre structured schedules. The secondary data was collected from the records of the published records of the various concerned offices and other relevant sources. The data pertained to the agricultural year 2005-2006 and were tabulated, analyzed with the help of appropriate statistical / analytical tools.

The findings of the study revealed that whole year chicks were purchased and raised upto its consumption. Two production cycles were being practiced in every season i.e summer,winter and rainy season.The average size of broiler farm owners with small, medium and large size group producers was 382, 876 and 1638 number of birds in one production cycle with cumulative total of 17190, 35040 and 57330 in one production cycle respectively. Similarly in winter season it was 396, 915 and 1979 with cumulative total of 17820, 36600 and 69265 in one production cycle for small, medium and large farms respectively and in rainy season it was 345, 830 and 1540 with cumulative total of 15525, 33200 and 53900 in one production cycle for small, medium and large farms respectively. Average size of family was 6.94, 7.96 and 9.89 in small, medium and large size groups respectively. The number of males was higher than that of females in each size group. The literacy percentage was higher in the case of third size group, followed by second and first size groups. The maximum family members were in the age group "15-60" years followed by below 15 years of age. The results of economics of broiler production, revealed that for broiler farm, the capital investment of Rs 56235.27,Rs 86420.12 and Rs 114965.81 was incurred for small, medium and large size group respectively. Maximum share of fixed investment is to be made on poultry house/ poultry pens. The results of economics of broiler production calculated for one year, which include six production cycles revealed that cost of production per broiler was higher for size group first (small) followed by second (medium) and third (large) size group indicating existence of economies of scale. The major item of cost was feed cost which accounted for more than 60 per cent in all size groups followed by cost of

chicks which accounted for nearly 20 per cent in all the three size groups. Therefore, feed and chick cost accounted for nearly 80 per cent of the total recurring cost. Imputed value of family labour was also computed and hired labour was engaged on pay roll basis/ monthly basis. The cost A, cost B, and cost C were examined and studied. The hypotheses framed as" Large size farm owners have relatively higher cost of production as compared to medium and small size farm owners" was tested and the results indicated that the hypothesis was rejected. The results of the return analysis indicated that yields were maximum for large size group followed by medium and small size group of main product. By products like manures, gunny bags etc. also fetched higher price for large size group followed by medium and small size group. Average weight per broiler was found out to be 1.40 kg for small, 1.45 kg for medium and 1.48 kg for large size group. The average price per broiler calculated was Rs 66.74, Rs 66.00 and Rs 65.85 for small, medium and large size groups respectively and average price of Rs 47.67 per kilogram for first size group Rs 45.51 per kilogram for second size group and Rs. 44.49 per kilogram for third size group. The higher price per kilogram for first size group was due to the fact because they were selling the produce directly to consumer . The measures of farm profitability analysis indicated that the net income, family labour income, farm business income and farm investment income was positive on average basis. Net income calculated was Rs. 25660.01 for small size group, Rs. 58393.99 for medium size farms and Rs. 159057.50 for large size

group farms. Family labour income came out to be Rs. 28679.01, Rs.61207.01 and Rs. 161667.71 for small, medium and large size groups,respectively. Farm business income calculated was Rs. 35427.21, Rs.71577.41 and Rs.175463.57 for small, medium and large size group respectively. Farm investment income was also computed and it came out to be Rs.32408.21, Rs.68764.39 and Rs.172853.36 for small, medium and large size groups, respectively. Cost and income measures were also calculated for 100 broilers in all the size groups and the results were positive. The hypothesis as framed Small size group farms have relatively higher profit than medium and large size group farms was tested and the results indicated that the hypothesis is rejected. Capital productivity analysis was carried out to evaluate the efficiency of capital use in the investment project. Different measures to evaluate the investment proposal are Pay Back Period (PBP), Net Present Value (NPV), Benefit Cost Ratio (BCR) and Internal Rate of Return (IRR). For The present study Benefit-cost ratio and Net Present value was calculated. Benefit-cost ratio was found out to be 1.13:1 at 10 per cent discounting rate as well as undiscounted for small size group, 1.14:1 at 10 per cent discounting rate As well as undiscounted for medium size group and 1.24:1 at 10 per cent discounting rate as well as undiscounted rate for large size group farm owners. Net Present value at 10 per cent discounting rate was higher at Rs.116582.44 for large size group, Rs.38693.39 for medium size group and Rs.15730.41 for small size group broiler farm owners.

Marketing of broilers was largely in the hands of private enterprises and there existed a long chain of middlemen between the producer and ultimate consumer. The main marketing agencies involved in the marketing of broilers were Itinerant trader, Wholesaler, Hotel and institution dealers and Retailers. The results revealed that 18.33 per cent of the selected respondants disposed off their produce through itinerant traders. The Wholesalers were responsible for the disposal of 22.50 per cent and 8.34 per cent of the total produce was sold directly to consumer. A number of marketing channels were identified that were involved in marketing of broilers. Among them, five main channels were studied in detail. The channel I (Producer-Consumer) was followed by ten per cent of the selected respondents. Through this channel the producers share in consumers rupee was estimated as 96.36 per cent. The marketing efficiency by Shepherds method was calculated as 27.50. The channel II (Producer-Retailer-Consumer) was followed by 18.92 per cent of the selected broiler farm owners. Through this channel producers share in consumers rupee was 81.40 per cent. The marketing efficiency calculated as by Shepherds method came out to be 5.37. The retailer got a margin of Rs.4.75 per kilogram (7.85 per cent). Through channel III (Producer-Itinerant trader-Retailer-Consumer) about 14.39 per cent of the respondents sold their produce. The producers share in consumers rupee in this channel was estimated as 77.10 per cent. In this channel itinerant trader got a margin of Rs.2.75 per kilogram and retailer got a

margin of Rs.5.75 per kilogram (i.e 4.41 per cent and 9.23 per cent for itinerant trader and retailer). The channel IV (Producer-Wholesaler-Retailer-Consumer) followed by 38.83 per cent of the selected respondent was studied and the results reveal that wholesaler and retailer earned a margin of Rs.2.00 and Rs.5.50 per kilogram respectively. The producers share in consumers rupee was 78.46 per cent and marketing efficiency as computed by Shepherds index formulae was 4.46. Channel V (Producer-Wholesaler-Hotels and Institutions-Consumer) was practiced by 17.86 per cent of the selected respondents and the results reveal Hoteliers margin was Rs.15.50 although their marketing cost was high i.e Rs.15.75 per kilogram. The reason of the high marketing cost and marketing margin for the Hoteliers was because it were Hoteliers and different Institutions who incur much amount on broilers to make it ready to serve. The producers share in consumers rupee in this channel was very low, which was 57.78 per cent. The Shepherds index of marketing efficiency was 2.36. It was observed that marketing margins and marketing costs were neck to neck for all intermediaries except for Hoteliers and Retailers. As in case of Hotels and Institutions marketing cost was higher as compared to marketing margin, which was seen just opposite in case of retailers where marketing margin was more or equal to marketing cost except in channel no II. As the production cycle of broilers was very short , so, every marketing operation was very quick and fast.

The hypothesis framed as Producers share in consumers rupee is more in direct channel (Producer-Consumer) as compared to other channels was observed and the results indicated that the hypothesis was hereby accepted. Various production and marketing led problems were studied related to production and marketing of broilers. Among the production led constraints unavailability of feed, inferior quality of feed, inadequate medical facilities during critical periods, weak research base on high yielding progenies, no access to credit facilities for broiler farm owners and no encouragement from government agencies for scientific rearing were serious problems opinioned by majority of respondents. The serious market led constraint included lack of government interventions in the marketing system, price fluctuations, no control on intermediaries, no regulated market and no support from department of animal husbandry. CONCLUSIONS The study on Economics of Production and Marketing of Broilers in Allahabad district of Uttar Pradesh revealed that broiler production is remunerative and offers ample scope for employment generation when it is operated on a large scale. The economic analysis in terms of cost and returns, Net Present value (NPV), Benefit-cost ratio (BCR) indicated that the broiler farming is economically viable. It was also concluded that larger broiler farms are better managed by trained people and give higher yields as compared to smaller rearers. There is also a great scope for broiler industrys development on a large scale as there is huge domestic and foreign demand for broilers. Broilers can

also become an important source of foreign exchange earner. It was also concluded that smaller and medium broiler farms are not economically viable as compared to large size farms, as the law of economies of scale operates so it was concluded that small and medium farms should be discouraged and if this enterprise is to be started, it is recommended to start on a large scale. SUGGESTIONS Following suggestions have been made keeping in view the problem, related to production and marketing of broilers faced by the producers of the study area. 1). The broiler farm owners should increase the size of their business as they can get the benefit of economies of scale. 2). As feed was the major input in the cost of production of broilers so, it is recommended to have proper feeding management to increase the income. 3). Adequate and timely institutional finance and the required inputs need to be provided, particularly during the initial years of establishment of the enterprise. 4). High yielding breeds of broilers should be made available to broiler farmer through modern breeding techniques, which are virus resistant and can withstand adverse conditions. 5). The production of broilers needs to be done on scientific lines so as to increase the productivity and make this venture economically viable and more profitable. 6). Since broiler industry involves a lot of risk ,as outbreak of any disease can wipe out the whole flock. So, it was recommended and suggested to broiler

farm owners to insure their establishment against any untoward which can keep the entrepreneurs on a safer side. 7). Training of poultry farmers is sine-quo-non of poultry enterprise. The concerned department should come forward to train poultry farmers on upkeeping their flock on scientific lines. 8). The recommended package of practices for broilers needs to be followed for getting higher returns. 9). More farmers should be motivated to venture in this trade as broiler production is having high economic returns. 10). Strong packaging of dressed broilers, particularly the export quality needs to be done on scientific lines, which can prolong their keeping quality. 11) Marketing of broilers through proper channels needs to be encouraged like co-operative societies which was lacking in the field. 12). Export facilities for broilers need to be strengthened as there is great demand of dressed broiler in Gulf countries. 13). Creation of broiler marketing board, which can take care of both, marketing of output as well as timely supply of inputs. 14). Extension activities needs to be strengthened, so as to guide the poultry farmers about latest happenings around the world related to poultry industry.

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SCHEDULE
Topic : Economics of Production and Marketing of broilers in Allahabad district of Uttar Pradesh Table 1: Details about Allahabad District and Blocks (Shankargarh and Chaka) S. No. Particulars Information in figures District Allahabad Block Block Handia Shankargarh

1 2 3 4 5 6 7 8 9 10 12 13 14 15 16 17 18

Total Area Land under cultivation Forest land Total population Total villages Educational Institution Health centres Nyay Panchayat Gram panchayat Literates Literacy percentage Livestock population Anganwadi centres Mahila Mandal Assembly constituency Banks Principal crops

Dr.Nahar Singh (Advisor)

Hakeem Shabir Ahmad (Research Scholar)

Proforma A Name of the village : Total area of the village : Total number of broiler houses: Major crops grown in village : Method of marketing the produce : Proforma B Name of the village : Table 2 : Study about the respondent/Producer
Name of the Age producer Sex Caste Primary occupation Secondary occupation Others (if any)

Table 3 : Details about respondent and his family

Worker/nonworker Literacy On farm Outside farm

S.No. Name

Relationship with the head

Sex Age

Marital status

Table 4 : Educational Qualification (Numbers)

Age group (in years)

Upto High school M F

Intermediate Graduation

Post Graduation M F

Total workers on farm M F

Up to 15 20-60 60 and above

Table 5 : Details of broiler farms

Name of the respondent Total number broilers of Category Other enterprises

Table 6 : Credit
Utilization Broiler productio n Agril purpose s Any othe r Remark s

S.N o

Source

Amoun t (Rs)

Rate of Amoun Interes t t unpaid

Institution al

NonInstitution al

Table 7 : Income from other sources (Rupees)

Category of the respondent Income from secondary occupation Income from tertiary occupation (if any)

Table 8 : Farm Inventory

Particulars Qty. or Date/year of Beginning number purchase/construction Inventory value Depreciation Ending inventory value Remarks

FIXED ASSET Poultry house Land Any other BUILDING Residence Implement shed Broiler house Hatchery Miscellaneous LIVESTOCK Bull Cow Goat Buffalo

Any other IMPLEMENTS AND MACHINERY (DEAD STOCK) Feeder Linear feeder Feed hopper Basket Bucket Jars Water containers Other machines

Table 9 : Month wise expenditure on broilers per production cycle (2005=2006). S.No. Particulars November December January February Qty Value Qty Value Qty Value Qty Value A CATEGORY OF PRODUCER 1 Number of birds 2 Feed 3 Medicine 4 Electricity charges 5 Water charges 6 Veterinary fee 7 Labour a) Family b) Hired 8 Upkeep charges 9 miscellaneous Qty = quantity Table 10 : Monthly loss of broilers during one production cycle (2005-06) S.No. Particulars 1 a. b November December January No. P V No P V No P V UNDER HALF KG Died Culled February No P V

2 a b

ADULTS (ABOVE 1 KG) Died Culled No. = Number, P = Price, V = Value

Table 11 : Output (Returns from main and by product of one production cycle) S.No. Particulars Qty (no.) Date and Rate month of sale (Rs) Amount (Rs) Remarks

A 1 2 3 B 1 2 3 4

MAIN PRODUCT Live broiler Dressed broiler Any other BY PRODUCT Litter Gunny bags Eggs Any other

MARKETING SCHEDULE
General Information of the market Location of the market Ownership Business Hours Method of sale Table 12 : Market functionaries S.No. 1 2 3 4 5 6 7 8 9 Market functionaries involved Percent share in broiler marketing Producer Itinerant trader Co-operative society Hotels and Institutions Wholesaler Government agency Retailer Department of Animal husbandry Any other functionary : : : : :

Marketing channels followed for live poultry 1. Producer Consumer 2. Producer Itinerant trader Consumer 3. Producer Itinerant trader Retailer Consumer 4. Producer Wholesaler Retailer Consumer 5. Producer Retailer Consumer 6. Producer Hotels and Institutions Consumer 7. Producer Co-operative society Retailer Consumer 8. Producer Co-operative society Consumer

Table 13 : Study of producer (Broiler farm owner) Name Qty Total Pri Gros Charge paid by producer of produc quanti ce s produ ed in ty per inco cer kgs sold kg me in kgs Transporta tion Weighi ng Handli ng Oth er Tot al

Net amou nt receiv ed (Rs.)

Table 14 : Study of Itinerant trader Nam Qty. Purch Charges borne by itinerant trader e of purch ase itiner ased price ant in kgs. trade r

Total quan tity sold in kgs

Selli ng pric e per kg

Net amou nt recei ved by itiner ant trade r

Transport Weig ation hing

Stor age

Handl Oth Tot ing er al

Table 15 : Study of wholesaler Name of whole saler Qty purch ased in kgs. Purc hase price per kg. Charges borne by wholesaler Tota l quan tity sold in kgs Ot her To tal Sell ing pric e per kg Net amoun t receiv ed by whole saler

Transpor tation

Weig hing

Stor age

Hand ling

Table 16 : Study of Co-operative society Name of Coopera tive societ y Qty. purch ased in kgs. Purch Charges borne by Co-operative society ase price per kg. Total quan tity sold in kgs Selli ng pric e per kg Net amou nt recei ved by coopera tive societ y

Transpor tation

Weig hing

Stor age

Handl Ot ing her

To tal

Table 17 : Study of Retailer Na me of retai ler Qty. purcha sed in kgs. Purch ase price per kg. Charges borne by Retailer Total quan tity sold in kgs Selli ng pric e per kg Net amou nt recei ved by retail er

Transport ation

Weigh Stor ing age

Handl Oth Tot ing er al

TESTING OF HYPOTHESES I: "Per bird cost of production was higher in first

size group (small) as compared to second (medium) and third (large) size groups"
16.25 = 11 5.67 = 0.42 6.72 = 1.47 7.50 = 2.25 8.24 = 2.99 6.17 = 0.92 g1=19.05 g12=362.90

= 121 13.50 = 8.25

= 0.18 5.25 =0

= 2.16 5.70 = 0.45

=5.06 6.15 = 0.90

= 8.94 7.25 =2

= 0.84 5.89 = 0.64

g2=12.24

g22=149.81

= 68.06 12.23 = 6.98

=0 4.89 = -0.36

= 0.20 5.00 = -0.25

= 0.81 5.05 = -0.2

=4 6.13 = 0.88

= 0.40 4.79 = -0.46

g3=6.59

g32=43.42

= 48.72 6.23

= 0.13 0.06

= 0.06 1.67

= 0.04 2.95

= 0.77 5.87

= 0.21 1.1

G=37.88

C.F

G2 18

(37.88)2 18

1434.89 18

= 79.71

SS due to size groups = (19.05)2 + (12.24)2 + (6.59)2 __ 79.71 6 = 362.90 + 149.81 + 43.42 __ 79.71 6 = 92.68 - 79.71 Total SS Error SS =xij2 - CF = = 261.58 - 79.71

= 12.97 = 181.87 = 168.9

181.87 - 12.97

ANOVA TABLE
Source of Deg. Of Sum of Mean sum F value F (5%) Remarks variation freedom square of square (calculated) table value Due to 2 12.97 6.48 0.57 3.68 N.S groups Due to 15 168.90 11.26 error Total 17 181.87

TESTING OF HYPOTHESES II: "Third size group farms have relatively higher
profit than second and first size group farms "
50.55 = 18.52 70.49 = 38.46 19.94 = -12.09 g1= 44.89 (g1)2= 2015.11

= 342.9 43.74 = 11.71

= 1479.1 75.76 = 43.73

= 146.16 32.03 =0

g2= 55.44

(g2)2= 3073.59

= 137.12 38.09 = 6.06

= 1912.3 = 0 74.50 36.41 = 42.47 = 4.38

g3= 52.91

(g3)2= 2799.46

= 36.72

= 1803.7

= 19.18 G= 153.24

C.F

G2 9

(153.24)2 9

23482.16 = 2609.16 9

SS due to size groups = (44.89)2 + (55.44)2 + (52.91)2 __ 2609.16 3 = 2015.11+ 3073.59 + 2799.46 __ 2609.16 3 = 2629.38 2609.16 = 20.22 Total SS Error SS =xij2 - CF = = 5877.36 - 2609.16 = 3268.20 = 3247.98

3268.20 20.22

ANOVA TABLE
Source of Deg. Of Sum of Mean sum F value F (5%) Remarks variation freedom square of square (calculated) table value Due to 2 20.22 10.11 0.018 5.14 N.S groups Due to 6 3247.98 541.33 error Total 8 3268.20