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Rough weather for animal feed industry
Siraj-ul-Hasan
ARTICLE (December 01 2002) : If we look retrospectively at the development of animal feed industry in the country, it is revealed that this industry, so vital for the growth of livestock sub-sector of agriculture is still in a bad shape.
In October, 1989, the then Prime Minister, inaugurating the annual wheat sowing campaign, among other things, had stated that the federal government was planning to set up four feed institutes, one in each province for ensuring proper nourishment for the animal health. It is not known so far whether any headway is made in this regard.
However, an overview of the animal feed industry is being given here that may, perhaps, serve as an eye-opener to the concerned authorities to become more cautious while working under the recently-elected government.
Animal feed industry is broadly classified in two main categories viz. (i) cattle feed industry and (ii) poultry feed industry. While the former has not yet developed to any sizeable extent the latter has expanded in an organised fashion.
Only some sporadic efforts have been made to undertake cattle feed industry on commercial lines and with limited success. However, there is a growing realisation on the part of all concerned to develop this industry so that composite nutritious feed may be made available at reasonable prices to our cattle farmer. Research work is also in progress in the Pakistan Agricultural Research Council and at various provincial livestock research stations to develop various types of low-cost livestock feed through application of modern knowledge of nutritious feed service and the use of the conventional feed resources.
This would also not involve demand for more land to ensure optimum provision of the feed requirements of livestock in the most suitable and balanced form.
Poultry feed industry: A number of poultry feed mills of varying capacities have been established across the country, their main concentration being in the Punjab and Sindh provinces. A few of these poultry feed mills are also occasionally engaged in preparing composite livestock feeds.
The feed industry in the country made a start on scientific and commercial lines in the early sixties. But it remained confined to the manufacture of poultry feeds. Messrs Lever Brothers (a foreign-based company) were the pioneer in this industry.
They established their first-ever mill on scientific and commercial lines, in 1963. After serving the poultry industry for a number of years in the initial stages of its development they had to abandon their feed manufacturing operations some time in mid seventies. They could not withstand the competition given by the Pakistan feed mills which sprang up subsequently in quick succession in the wake of great strides taken by the poultry industry in the country.
These Pakistani mills dumped the market with their low-priced products making it difficult for the foreign-based company to compete with them price-wise. The indigenous feed industry received a great fillip with the transformation of rural poultry production into a commercial venture. The number of commercial poultry farmers continued increasing from year to year.
At present there are over 5000 poultry farms in the country. Of these about 20 percent make their own feed while the rest draw their requirements from the commercially established feed mills. The importance of the feed industry in the development of poultry in the country may be gauged from the fact that feed alone accounts for 65-70 percent of the cost of poultry production.
Production capacity: Consequent upon the expansion of the poultry industry the number of feed mills has also increased over the years. From 26 feed mills producing 390,000 tonnes of feeds in 1980 they increased to 40 with a total capacity of 596,000 tonnes in 1984. The latest figures being not available, it is estimated that the installed capacity may have risen to about one million tonnes.
Poultry feed produced in the country by the various commercial feed mills has no standard quality. The quality of various types of feeds produced by different mills has wide variations. It is felt that the quality of feed in general is deteriorating. This, on the one hand, is disturbing the economics of the producers and is hampering the growth and development of the industry.
The deterioration in quality is due to (i) non-availability of good quality protein ingredients, (ii) shortage of coarse grains (constituting about 50 percent of total ingredients), and (iii) non-existence of quality control of end-products.
There is an under-utilisation to the extent of about 60 percent of the installed capacity of commercial feed mills in the country. As a matter of fact feed mills regulate their production schedule according to the effective demand from the poultry farms. They do not produce in excess of ready demand as the shelf life of feed ranges from 10 to 30 days only. Even the ready demand fluctuates periodically with the change in weather and feed prices.
Prices: As there are no specified quality standards followed by feed mills and as they produce average quality feed, there are no wide variations in their selling prices of the same type of feed. However, there are some difference in prices of feeds produced by mills located in different regions, mainly due to difference in raw material prices. Again, some mills are often able to get premium in their selling prices because of better after-sale technical advisory services.
Certain big mills located in the same region have also formed themselves into groups for mutual consultations in matters of common interests, including fixation of prices of their end-products.
As mentioned above, the poultry feed industry is presently working only 40 percent of its installed capacity, producing a total quality of 600,000 to 700,000 tonnes annually. This is just enough to satisfy the domestic demand. But as the unutilised capacity is available with the existing mills, they can easily increase their production proportionately to the export demand as and when it is created. Assuming the existing mills are working at full capacity, one million tonne of poultry feed may be available for export.
Cattle feed industry: With regard to cattle feed, as stated earlier, this sub-sector of feed industry has not developed to any sizeable commercial scale. There are hardly a couple of industrial units in Punjab which are exclusively producing this category of animal feed.
Some of the poultry feed mills which have the requisite machinery and equipment also occasionally produce cattle feed. But the total quantity thus produced is very small. It is estimated at 5,000 to 6,000 tonnes per annum and is consumed locally in its ignorance of livestock owners about the utility of concentrated feeds and therefore they resort to cheaper conventional feed stuffs. Moreover, the livestock population is scattered in small flocks over vast areas making its commercial distribution a difficult job.
This is also a limiting factor in popularising the use of mill-made livestock feed in the country. However, cattle feed may be manufactured for export market. Some of the existing poultry feed mills have shown their eagerness to produce for export provided certain incentives and facilities are provided to them. They also claim to have the necessary machinery and technical know-how for the purpose.
The cattle feed industry in the country being not developed scientifically and commercially, the then Prime Minister's announcement that government is planning to establish feed institutes in all the four provinces to look into the feed problems provided an optimism. Besides other functions of the institutes under planning it is suggested that they may also work for establishing a couple of cattle-feed manufacturing mills as pilot projects which may produce feed for export only.
As the private sector is shy for the present to invest in such ventures these may be established in the public sector for their eventful transfer to the private sector. In Turkey, which is a major feed-producing country, two mills are primarily manufacturing for export and filling contracts with Middle East to the extent of 100,000 tonnes of finished feed annually.
The poultry feed industry is meeting the domestic demand satisfactorily. But the export capacity is yet to be developed. The existing poultry feed units may be motivated to produce for export market by ensuring regular and adequate supply of various ingredients, particularly course grains at reasonable rates and duty-free importation of certain types of sophisticated machinery not available domestically.
As a long-term measure it is necessary that some unconventional feed resources may be exploited for cutting down the cost of production of cattle feed. Research in this direction is being undertaken by the PARC (Pakistan Agricultural Research Council) and other agricultural research institutes. It is suggested that this may be speeded up for application in the commercial production of cattle feed.
Courtesy Business Recorder
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