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CHAPTER - II
REVIEW OF LITERATURE 2.1 INTRODUCTION
Once the topic is decided, it is essential to review all relevant
materials, which are most important to define the problem of the study. In fact
review of literature begins with the search for suitable topic and continues
throughout the duration of the research work. Since a research report, either a
dissertation or a thesis, is supposed to be a study of in-depth aim and
contribution to knowledge, a careful check should be made that the proposed
study has not previously carried out.
Analyzing the study in the field of Poultry has attracted much of the
researchers and practitioners. Though some studies were undertaken on the
Poultry Sector, “Production and marketing of poultry eggs” was not studied
specifically. Hence, literature review related on subjects such as
Entrepreneurship, poultry Sector, egg production, Poultry marketing and feed
input industries are bound to be useful in identification and formulation of
problems. The same may be used in analysis of data and in employment of
statistical tools. The researcher has made an attempt to present a brief review
of the literature available, which includes reports submitted by various
Committees appointed by the Government of India from time to time, Articles,
Books and Technical papers published in Journals.
62
2.2 EMPIRICAL STUDIES
This section of the chapter reviews the empirical studies associated
with the research topics.
Baba (2007)1 studied the financial feasibility of investments in
contract poultry farming in Tamil Nadu region. Fifty integrated poultry were
selected randomly in Coimbatore district. He concluded that on an average,
farmers received a growing coat Rs 2.36 per Kg of bird. The study also
calculated the profitability per chick, which was found to be Rs 1.50 in the
beginning. The study also estimated the returns on investment that was found
to be 11.5 % in the beginning and increased up to 20%.
Mehta and Nambiar (2007)2 in their study highlighted the major
problems in poultry production in Pakistan and then focused to estimate the
percentage share of different stake holders in total profitability from poultry
industry because inequitable distribution of profit share was assumed to be one
of the major obstacle in the expansion of poultry industry. His results
demonstrated that commission agents were earning 47% of the total profit in
poultry industry, followed by retailers (28%) and producers (25%). This
indicates that it would be impossible to improve the contribution of poultry in
total nutrients uptake of human beings in the country without reversing the
trends in profit share.
1 Baba 2007, An overview of the Indian poultry and future scenario, All India Poultry Year
Book, Special Millennium Issue. Delhi. 2 Mehta R., Nambiar R.G. (2007). The poultry industry in India. Paper delivered at the FAO
Conference on ‘Poultry in the 21 st Century’. 5-7 November, Bangkok.
63
Emam and Hassan (2010)3 revealed that 58% from egg poultry
producers whose main job are poultry breeding, and 60% of poultry producers
have experience of more than five years. The feed cost was the main cost item
in the egg farm in open-system that, it represented 90.2, 89.7 and 92.7% of
total production cost in small, medium and large farm sizes of egg production,
respectively, and about 75.8% in (4-5 months old) pullet farm. Also, the study
revealed that the other factors of production such as price of day-old chicks,
price of (4-5 months) hens, mortality cost, vaccines and drugs and labor cost
represented the most total cost of production. The total cost of production and
cost per dozen were lowest in large farm sizes than other farm sizes and type.
Highest gross profit was obtained in large farm sizes, while the lowest ones
were observed in pullet farms. However, all farms have CPP greater than
unity. The study concluded that: feed cost was the main cost item in different
farm types and sizes. High percentage of mortality cost and price of day-old
chicks and (4-5 months) hens were also high. Also, it concluded that, the large
size farm was more efficient than other sizes and type of the farms.
According to Gausi et al. (2004)4 small holder village chicken
producers tend to ignore new technology even when it appears to be better
than their current practices due to market limitations. This implies that that
apart from meeting subsistence needs, engagement and level of investment of
smallholder farmers in agricultural enterprises responds to existing market
opportunities.
3 Abda Abdalla Emam and Amin Mahgoup Hassan, Economics of egg poultry production in
Khartoum State with emphasis on the open-system- Sudan, African Journal of Agricultural Research Vol. 5(18), pp. 2491-2496, 18 September, 2010 . ISSN 1991-637X ©2010 Academic Journals.
4 Gausi J C K, Safalaoh A C L, Banda J W and Ng'ong'ola D H 2004 Characterization of the smallholder poultry marketing systems in rural Malawi: A case study of Malingunde Extension Planning Area. Livestock Research for Rural Development 16 (12) 2004. http://www.lrrd.org/lrrd16/12/gaus16097. htm
64
Madkour, Mohmoud and Mohanna (1982)5 studied price spread,
marketing cost and marketing margin for eggs with a sample of 50
respondents (comprising producers, wholesalers & retailers). Results revealed
that the producer’s share of consumer price was higher in the producer
consumer marketing channel than in other channels in which one or more
middlemen existed.
Miah et al. (1992)6 in their study on economic analysis of poultry
marketing in Mymensingh district concluded that poultry was an important
source of animal protein.
According to Pedersen (2002)7 it is difficult to design and implement
poultry egg production programs that benefit rural people without
understanding village poultry production and marketing systems.
Islam (2003)8 discussed about the existing poultry egg processing
and marketing system, its problems and its potential solutions in Bangladesh.
Egg grading and packing had not yet been developed. As a result producers
were not getting remunerative price that is why middleman were being gainer.
Therefore, modern poultry processing plant, preserving technology and proper
marketing channels were suggested to establish.
5 Madkour, Y.H., T.H. Mahmoud and N.Z. Mohanna. 1982. A comparative study on egg cycle
in relation to egg production of the Fayoumi and RIR fowl. Agricultural ResearchReview, 57: 127-134.
6 Miah, M.I.A., M.A. Akbar and J.N. Barman, 1992. An Economic analysis of poultry marketing in Mymensingh district. Bangladesh J. Animal Sci., 21: 51–7
7 Pedersen C V 2002 Production of semi-scavenging chickens in Zimbabwe. Ph.D Thesis. Royal Veterinary and Agricultural University, Copenhagen, Denmark.
8 Islam, A.M., 2003. Poultry Products Processing and Marketing System in Bangladesh. Pakistan J. Biol. Sci., 6: 883–6
65
Hellin et al. (2005)9 also reported that understanding of village
poultry functioning and marketing structure are a prerequisite for developing
market opportunities for rural households and could be used to inform policy
makers and development workers in considering the commercial and
institutional environment in which village chicken keepers have to operate.
Efforts to improve management of village chicken should therefore be
complemented by a supportive marketing system.
Islam (2003)10 in their study has indicated that the six major
wholesale egg markets in India are co-integrated apparently due to
performance of market intelligence functions by the National Egg
Coordination Committee (NECC) which helps in transmitting price signals
across the length and breadth of the country through print media on day-to-day
basis. The high degree of co-integration amongst various markets indicates
that these markets are competitive and efficient at the wholesale levels.
However, it still remains to be examined whether the poultry farmers and
traders at the grass-root level are able to realize the prices declared by the
NECC.
Maqbool et al. (2005)11 in his study showed that marketing system of
poultry eggs is traditional in nature. On an average, the profit margin in case
of the commission agents was Rs.257.13 per 40 kg whereas in case of retailer,
the profit margin was Rs145.2 per 40 kg .The profit margin in case of eggs
9 Hellin J, Griffith A and Mike A 2005 Mapping the market: Market-literacy for agricultural
research & policy to tackle rural poverty in Africa. In: Proceedings of an International Seminar, 28th February –1st March 2005, Westminster, London, UK, 110–150.
10 M.A. Islam, 2003. Poultry Products Processing and Marketing System in India. Pakistan Journal of Biological Sciences, 6: 883-886.
11 Maqbool, A., K. Bakhsh, I. Hassan, M. W. A. Chattha and S. A. Ahmad, 2005. Marketing of commercial poultry in Faisalabad City (Pakistan). J. Agri. Soc. Sci., 1: 327-331.
66
was 42.06% in case of salesmen, 33.07% in case of wholesalers and 48.5% in
case of retailers. Marketing costs incurred by the commission agents was
Rs.12.87 per 40 kg. It was also found that middlemen were exploiting poultry
producers by exhorting a large portion of consumer’s rupee. Therefore,
producers were not getting remuneration according to the value of their
products. Minimizing role of middlemen, providing marketing information to
producers, strengthening marketing infrastructure and facilitating producers
with easy access to veterinary services are the important steps that should be
taken immediately by policy makers and other concerned bodies to boost up
poultry farming in Pakistan.
A study conducted by Kenea et al. (2003)12 on five selected poultry
markets in East Shewa Zone (i.e. Debre Zeit, Modjo, Meki, Chefe Donsa, and
Saris) revealed that the poultry marketing system is primarily characterized by
local selling and buying. The study indicated that there are two major poultry
marketing channels where farmers directly sell to consumers as well as
directly to small retail traders who take the chicken to large urban markets.
Accordingly, it was found that about 42% of all transactions reported were
local farmers selling their chickens to local consumers whereas 39.4% of the
transactions involved local farmers selling their chickens to traders who re-
sold the chickens to urban consumers. Poultry buyers at all sample markets
were traders, consumers, restaurants, farmers, and small-scale urban chicken
farms.
12 Kenea, Y., Legesse D., and Alemu, Y. 2003: Poultry Marketing Structure, Spatial Variations
and Determinants of Prices in Eastern Shewa Zone, Ethiopia. Proceedings of the 10th annual conference of the Ethiopian Society of Animal Production (ESAP), 21 23 August 2002, Addis Ababa, Ethiopia, p.69 80.
67
Goutard and Magalhaes (2006)13 have identified the major marketing
channels of poultry and poultry products. Here, the marketing channel shows
that a large number of middlemen are involved in the marketing chain between
producers and consumers. It was found that an average trader handles between
40 to 100 chickens per week while the middle man manages 2000 eggs per
month. Moreover, it is estimated that the average number of birds that are sold
at local markets ranges from 30 to 400 per day.
2.3 EGG QUALITY ASPECTS
As per FAO 200314, eggs are an important and fundamental foodstuff
for small holder farmers of developing countries. In addition to other
substances with biological functions, eggs are main sources of various
nutrients such as; proteins, lipids, vitamins and minerals. Egg proteins contain
all essential amino acids and therefore egg protein is used as standard for
measuring the nutritional quality of other food products
Sparks, 200615 states that although eggs contain approximately 74%
water, they are potentially important and balanced source of essential fatty
acids and as well as some minerals and vitamins. A typical egg would
contribute 3-4% of an adult’s average energy requirement per day and has
approximately 6.5g of protein
13 Goutard F. and R. S. Magalheas. 2006. Risk and consequence assessment of HPAI. CIRAD.
February14 FAO, 2003. A guide to the seaweed industry. Food and Agriculture Organization of the
United Nations, Rome. www.fao.org/DOCREP/006/ Y4765E/y4765e 00.htm.15 Sparks, N.H.C. 2006. The hen’s egg. Is its role in human nutrition changes? World’s poultry
science journal. Vol. 62. pp: 308-325.
68
As per Uluocak et al., (1995)16 the significance of the egg as a
protein source for the nourishment of humans led the consumers to demand
for some qualities in this nutrient For many years the most important external
and internal egg quality traits have been shown to be; egg weight, egg shape,
shell thickness, breaking strength, specific gravity, size of air cell, albumen
height, albumen weight, yolk color and yolk index .
Juliet (2004)17 in her study states that external and internal qualities
of eggs are of major importance to the egg industry worldwide. However, they
are not being given a due attention in the developing world, where the
majority of the eggs are coming from free scavenging village chicken, as
compared to that of the developed world
2.3.1 External egg quality
Hamilton, (1982)18 states some of the external eggs quality traits
included; egg shell color, shell thickness, dry shell weight, egg weight, egg
shape index, which are highly affected by breed of chicken, age of chicken,
molting, level of nutrition, prevalence of disease, the type of chicken
production system
16 Uluocak, A.N., F. Okan, E. Efe and H. Nacar. 1995. Bildircin yumurtalarinda bazi dis ve ic
kalite ozellikleri ve bunlarin yasa gore degisimi. Turk Journal of Veterinary and Animal Science. 19: 181-185.
17 Juliet Roberts, R. 2004. Factors affecting egg internal quality and egg shell quality in laying hens. Journal of Poultry Science, 41: 161-177.
18 Hamilton, R.M.G. 1982. Methods and factors that affect the measurement of egg shell quality.Poultry Science, 61: 2002-2039.
69
As per the study conducted by Hammerle, (1969)19. Egg shell color
may be monitored by visual comparison with a serious of graded standards
and egg weight is easily measured by a suitable balance
According to Mohan et al. (1991)20. egg weight and shell thickness
measurements were higher in birds housed in cages than in birds kept on deep
litter. Madkour et al. (1982) also reported that the average egg weight of RIR
and Fayoumi pullets were 56.9g and 45.9g, respectively.
Aberra et al. (2007)21 reported an average egg weight of 42g and 49g
for Ethiopian naked neck chicken and their F1 crosses with New Hampshire
breeds, respectively, reared under improved management conditions.
According to Sezai (2008)22; the following equation, developed for
Japanese quails, could be effectively used for predicting egg shell weight as:
Y = 0.573+0.01532 (X 3) + 0.0238 (X4)
Where;
Y = eggshell weight,
X 3 = egg length and
X4 = egg weight.
19 Hammerle, J.R. 1969. An Engineering Appraisal of egg shell strength evaluation
techniques.Poultry Science, 48: 1708-1717. 20 Mohan, B., V. Mani & S. Nagarajan. 1991. Effect of different housing system on the physical
qualities of commercial chicken eggs. Indian Journal of Poultry Science, 26: 130-131. 21 Aberra, M & Tegene, N 2007, Study on the characterization of local chicken in Southern
Ethiopia, Proceedings held in Awassa.22 Sezai Alkan, Kemal Karabag, Askin Galic and M. Soner Balcioglu. 2008. Predicting Yolk
70
2.3.2 Internal egg quality
Sinha and Giri (1989)23 states egg internal quality is measured in
several ways including factors like; yolk color, albumen height, yolk height,
Hough unit, yolk width and nutritive values. Egg’s internal quality could be
influenced by factors like; genetic factors, environmental factors (such as
temperature, relative humidity and the presence of CO2), hen age, nutrition
status, egg storage condition and storage time. A good quality egg should be
free from internal blemishes such as blood spots, pigment spots and meat
spots.
Juliet (2004)24.There are two components of yolk quality; the color
of the yolk and the strength of the perivitel line membrane which surrounds
the yolk, where yolk color is measured by using Roche color scale
Samli (2005)25 and Kirunda et al. (2000)26 reported that the poultry industry identified albumen quality not only to judge the freshness of an egg but also considered it as important for the egg breaking industry because albumen and yolk have different markets. Although various measures of albumen quality have been proposed, the Hough unit is used most commonly today (Silversides, 1994)27.
23 Sinha, P. and A. K. Giri, 1989. Consumption of Livestock Products-Analysis and Comparison
of Data of NSS 32nd and 38th Round. Livestock Economy of India, Oxford and IBH Publishing Co. Pvt. Ltd., New Delhi.
24 Juliet Roberts, R. 2004. Factors affecting egg internal quality and egg shell quality in laying hens. Journal of Poultry Science, 41: 161-177.
25 Samli Kondombo, R. 2005. Improvement of village chicken production in a mixed (chickenram)farming system in Burkina Faso. Ph.D Thesis. Wageningen Institute of Animal Sciences, Animal Nutrition Group, Wageningen University, the Netherlands.
26 Kirunda, D.F.K. and S.R. McKee. 2000. Relating quality characteristics of aged eggs and fresh eggs to vitelline membrane strength as determined by texture analyze. Poultry Science Journal, 79: 1189 - 1193.
27 Silversides, E.G. 1994. The Haugh unit correction for egg weight is not adequate for comparing eggs from chickens of different lines and ages. Journal of Applied Poultry Research, 3: 120-126.
71
Iposu et al. (1994)28 reported significant negative correlations
between egg’s Hough unit and egg weight.
Pavlovski et al. (1981)29 cited in Shawkat (2002)30 reported that
better albumen height and Hough unit was recorded in eggs from free-range
birds than in battery cage conditions.
According to the report of Shawkat (2002) both albumen height and
Hough units decreased over time. The color of the yolk is determined by the
presence or absence of xanthophylls, some of which are precursor of vitamin
A. If the fed has plenty of yellow-orange plant pigments, known as
xanthophylls, it will be deposited in the yolk. Therefore, yolk color is
influenced by nutrition and dark yellow yolks can be produced by feeding
laying birds on green forage meal.
Gueye.EF (1998) in most cases of the developed world the diet is
altered to produce egg yolks of the correct color for a particular market. In any
consumer survey of egg quality yolk color ranks high but preference varies
among countries. Some consumers prefer white-colored yolks while others
prefer light-colored or darker orange yolks.
28 Iposu, S.O., C.F.I. Onwuka and D. Eruvbetine. 1994. The relationship between selected
quality traits and egg size. Nigerian Journal of Animal Production, 21: 156-160.29 Pavlovski, Z., B. Masic and N. Apostolov. 1981. Quality of eggs laid by hens kept on free
range and in cages. In: proceedings of first European Symposium by World Poultry Science Association. pp: 231-235.
30 Shawkat, Md. Ali. 2002. Study on the effect of feed supplementation to laying hen under the rural condition of Bangladesh. M.Sc Thesis. The royal veterinary and agricultural university, Dyrlægevej, 1870 Frederiksberg C., Denmark
72
2.4 POULTRY EGG MARKETING
This section identifies the importance and current status of egg
marketing. However it is also essential to acknowledge the basic concepts
related to marketing in order to understand the efficiency of marketing of egg.
2.4.1 Market and marketing concepts
According to Acharya (1988)31 A market is traditionally defined as a
specific geographical area where buyers and sellers meet for exchange of
goods and services. The most common way we obtain goods and services we
do not produce ourselves is to buy them from others who specialize in
producing them. To make such purchases, buyers seek out sellers in markets.
Markets are ways in which buyers and sellers can conduct transactions
resulting in mutual net gains that otherwise would not be possible .
Kohls and Uhl, 198532, described market as how much to produce?
What to produce? How to distribute production? A location, a product, a time,
a group of consumers, or a level of the marketing system may define it. The
choice as to which market definition to use depends on the problem to be
analyzed. Market is an institutional and organizational arrangement to
facilitate exchange of one thing for another. The most observable features of a
market are its pricing and exchange processes.
31 Acharya (1988), Agricultural Production, Marketing and Price Policy in India, Mittal
Publications, Delhi, pp. 317, 327.30. 32 Kohl’s, R.L. and Uhl,J.N.,1985. Marketing of Agricultural Product. Fifth ed., Coiler Mac,
Milan, U.S.A
73
N. Meganathan et al., (2010)33 in their study to identify the constraints in tribal livestock farming by collecting data from 900 sample
tribal farmers in six hilly areas of Tamil Nadu, viz., Kolli hill in Namakkal
district, Yercaud hill in Salem district, Ooty hill in The Nilgiris district, Kodaikanal in Dindigul district, Yelagiri hill in Vellore district and Sitheri hill
in Dharmapuri district. The data were analysed by Garett’s ranking technique.
Lack of sufficient pasture land, lack of marketing facilities, lack of adequate credit facilities, unremunerative price for the livestock products and lack of
scientific knowledge on livestock farming were observed to be the major
constraints perceived by the tribal farmers. Establishment of more milk co-operative societies, enhancing fodder cultivation, provision of loans to needy
tribal livestock farmers at reasonable interest rate and conducting awareness
programmes among tribal farmers on various scientific livestock management practices will lessen the prevailing constraints in tribal livestock farming,
which in turn improve the tribal livestock production.
According to Andargachew, 1990; Kochoa et al., 201134, a market is
thought of as a meeting of buyers and sellers: a place where sellers and buyers
meet and exchange takes place, an area where price determining forces (supply and demand) operate, and an area where there is a demand for
good.But a market is more than a physical place. It is a mechanism or an
institution through which buyers and sellers exchange information and transact. No need to meet physically for a market to operate especially in
today’s information and communication technologies. Another basic concept
that is closely related to market is marketing. This term came into use with division of labour and specialization and became common with urbanization
and industrialization over many years. 33 Meganathan, N., K.N. Selvakumar, M. Prabu,A. Serma Saravan Pandian, and G. Senthil
Kumar, constraint analysis of tribal livestock farming in Tamil nadu, Tamilnadu Journal of. Veterinary & Animal Sciences 6 (1) 12-18, January - February 2010.
34 Kebede Andargachew. 1990. Sheep marketing in the central highlands of Ethiopia MS thesis, School of Graduate Studies, Alemaya University, Dire Dawa, Ethiopia.
74
Solomon and Nigussie, 198335; Teferra et al., (201136) Marketing is also an important aspect of any livestock system. It provides the mechanism
whereby farmer’s producers/pastoralists exchange their livestock products for
cash. The cash is used for acquiring goods and services, which they do not produce themselves, in order to satisfy a variety of needs including food
clothing, medication, schooling, the purchase of breeding stock and other
production inputs and supplies.
2.4.2 Marketing systems
According to Sandeep saran and Gangwar37, marketing system is a
collection of channels, intermediaries, and business activities, which facilitate the physical distribution and economic exchange of goods. A channel of
distribution may be defined as a path traced in the direct or indirect transfer of
the title to a product as it moves from a producer to consumer or industrial users. Every channel of distribution contains one or more of “transfer points”
at each of which there is always either an institution or a final buyer of the product. In the process of marketing, legal title to the product always changes
hands at least once. The concept of marketing system includes both the
physical distribution of economic input and products and the mechanism of process or coordinating production and distribution.
35 Solomon Bekure and Tilahun Negussie. 1983. Livestock marketing studies. In: Pastoral
systems research in sub-Saharan Africa. Proceedings of the IDRC/ILCA workshop held at ILCA, Addis Ababa, Ethiopia, 21-24 March 1983. ILCA, Addis Ababa, Ethiopia. pp. 327360.
36 Tadele Tefera. 2011, Tende, International Maize and Wheat Improvement Center (CIMMYT), P.O. Box 1041 - 00621 Nairobi, Kenya .African Journal of Biotechnology Vol. 10 (23), pp. 4777-4783, 1 June, ISSN 1684-5315 © 2011 Academic Journals.
37 Sandeep Saran and L.S. Gangwar Analysis of Spatial Cointegration amongst Major Wholesale Egg Markets in India Central Avian Research Institute, Izatnagar-243 122, Bareilly, Uttar Pradesh, Agricultural Economics Research Review Vol. 21 July-December 2008 pp 259-263
75
Rhodes and Dauve (1998)38 define the marketing system in terms of what is otherwise known as marketing channel. In broad terms, marketing
system may be defined as the totality of product channels, market participants
and business activities involved in the physical and economic transfer of goods and services from producers to consumers. Marketing system operates
through a set of intermediaries performing useful commercial functions in
chain formations all the way from the producer to the final consumers.
As per Acharya and Jogi (2003)39, the system comprises several,
usually, stable, interrelated structures that, along with production, distribution, and consumption, underpin the economic process A marketing system can be
regarded as a multi-layered sequence of physical activities and of transfers of
property rights from the farm-gate to the consumer. The efficiency with which a marketing system in an area or country operates can influence the living
standards of people and the overall development of a nation and thus it is vital
to make improvement in marketing efficiency to trigger economic development.
2.4.3 Marketing efficiency
As per Maietta and Sena, (2007)40 efficiency in marketing is the most commonly used measure of market performance. There are two aspects
of market efficiency mostly mentioned in agricultural marketing literature are
technical (operational) efficiency and pricing (allocative) efficiency. Technical
38 Rhodes, V. James, and Jan L. Dauve. The Agricultural Marketing System, 5th ed. Scottsdale
AZ: Holcomb Hathaway, 1998, 420 pp.39 Acharya, S.S. and R.L. Jogi (2003), Minimum Support Prices in India: Some Issues, Working
Paper No. 132, Institute of Development Studies, Jaipur, May.40 Maietta O.W., Sena V. (2007), Organizational capital, product market competition and
technical efficiency in Italian cooperatives, Advances in the Economic Analysis of Participatory and Labor-Managed Firms, 10, 29-45.
76
efficiency is attained when goods and services are provided at a minimum average cost that is, when the least cost combination of marketing activities
are employed. Technical efficiency is achieved through technical
improvement. Pricing efficiency is concerned with the price–making role of the market system. It concerns how accurately, how effectively, how rapidly,
and how freely the marketing system makes price, which measure product
values to the ultimate consumer and reflects these values through the various stages of the marketing system to the producer
Senthilkumar et al., (2009)41 conducted a study to know the
knowledge level of commercial poultry (layer) farmers on scientific poultry
farming among the farmers of Namakkal district in Tamil Nadu. It was
revealed that the famers with large flock size were having more knowledge
than the small flock size holders. This could be due to their higher socio-
economic status, more mass media exposure, cosmopoliteness, etc
According to Abbot and Makeham, 1981; Kishindo 201042, markets
are efficient when the ratio of the value of output to the value of input
throughout the marketing system is maximized. The output of marketing is the
consumer satisfaction with the goods and service and the inputs are the various
resources of labor, capital and management that marketing firms use in the
process accomplishing particular job without reducing consumer’s satisfaction
and with the output of improvement is efficiency. However, a change that
reduces costs but also reduces consumer satisfaction with the end product
might actually reduce marketing efficiency. 41 Senthilkumar, R, Nita Khandekar, and Narmatha, N.( 2009), Knowledge Level Among
Poultry Entrepreneurs On Scientific Layer Farming, Tamilnadu J. Veterinary & Animal Sciences 5 (3) 94-98, May-June 2009.
42 Abbot, J.C. and J.P. Makeham, 1981. Agricultural Economics and Marketing in the Tropics.Wing Tai Cheung Printing Co. Ltd, Rome. 58p
77
Effective and efficient marketing system is the one that induces the
production of those products and quantities which when sold to the consumer
results in maximum returns after the deduction of minimum marketing charges
and farm production costs (Kohls and Uhl, 198543; Jayne et al., 2001)44.
However, consumer's satisfaction cannot be measured directly; changes can be
analyzed in terms of “technical” efficiency and “pricing” efficiency.
2.4.4 Marketing channel
Kotler and Armstong, (2003)45. Most frequently, a physical product
transfer is involved but sometimes an intermediate marketing institution may
take title to goods without actually handling them. Formally, a marketing
channel is a business structure of interdependent organizations that reach from
the point of product origin to the consumer with the purpose of moving
products to their final consumption destination
2.4.5 Market chain and business support services
According to Lundy et al. (2004)46 a market chain is used to describe
the numerous links that connect all the actors and transactions involved in the
movement of agricultural goods from the farm to the consumer. Supporting 43 Kohl’s, R.L. and Uhl,J.N.,1985. Marketing of Agricultural Product. Fifth ed., Coiler Mac,
Milan, U.S.A 44 T.S. Jayne , Takashi Yamanob, Michael T. Webera,David Tschirleya, Rui Ben
Chapotoa,Ballard Zuluca, Smallholder income and land distribution in Africa: implications for poverty reduction strategies, Department of Agricultural Economics, Agriculture Hall, East Lansing, MI 48824-1039, USA World Bank, Washington DC, USA, Food Security Research Project, Lusaka, Zambia.
45 Kotler, P. and Armstrong, G., 2003. Principle of Marketing, 10th Edition. Hall of India Pvt. Ltd., New Delhi. pp 5-12.
46 Mark Lundy, María Verónica Gottret, William Cifuentes, Carlos Felipe Ostertag, Rupert Best, Dai Peters and Shaun Ferris, (2004) Increasing the Competitiveness of Market chains for Smallholder producers Rural Agro-enterprise Development Project. Manual 3: Territorial Approach to Rural Agro-enterprise Development
78
these activities are services that enable the chain to operate. Agricultural goods
and products flow up the chain and money flows down the chain.
Lunde et al., (2004)47 the efficiency of the market chain is generally
a factor of how well information flows among these actors. Given the many
challenges of the marketplace, it is vital to suggest that a practical starting
point in developing a marketing strategy is to assist chain actors to visualize
their market chain from beginning to end. Market chains operate cost
competitively when they are supported by dedicated business organizations,
both formal and informal, which participate in enabling produce to flow from
the farm gate to the final consumer.
2.5 APPROACHES USED TO THE STUDY OF AGRICULTURAL
MARKETING
Martinez, (2007)48 need for vertical coordination in poultry
marketing:Vertical coordination refers to the synchronization of successive
stages of production and marketing, with respect to quantity, quality, and
timing of product flows. Methods of vertical coordination include open
production (also referred to as open, or spot, market), contract production, and
vertical integration. In open production, a firm does not commit to selling its
output before completing production. Cash (or spot) prices coordinate resource
transfer across the stages of production
47 Karen Lunde, Heinz-Georg Belting and Wolfgang Driever, Zebrafish pou5f1/pou2, Homolog
of Mammalian Oct4, Functions in the Endoderm Specification Cascade, Developmental Biology, Institute Biology 1, University of Freiburg, Hauptstrasse 1, D-79104 Freiburg, Germany.
48 Martinez AW, 2007;46(8):1318-20.Patterned paper as a platform for inexpensive, low-volume, portable bioassays. Department of Chemistry and Chemical Biology, Harvard University, 12 Oxford Street, Cambridge, MA 02138, USA.
79
Miah et al. (1992)49. Many study results indicated that research in
promoting of egg production has concentrated on improvements in
management while ignoring the potential role of socioeconomic issues, such
as marketing. Economic analysis of poultry marketing in Mymensingh district
concluded that poultry was an important source of animal protein The study
on marketing of poultry in district Jhang in India showed that those poultry
producers got considerably less price than that of market .
Chohan, (1992)50, further concluded that in case of birds, marketing
cost of collection agents and retailers were Rs.72.50 and 51.43 per 40 Kg,
respectively. Marketing cost in terms of eggs included rent of shops, labour
charges, electricity charges, loading, transportation, breakage, etc.
Gausi et al., (2004)51 It is difficult to design and implement chicken-
based development programs that benefit rural people without understanding
village chicken production and marketing systems. Small holder village
chicken producers tend to ignore new technology even when it appears to be
better than their current practices due to market limitations. This implies that
that apart from meeting subsistence needs, engagement and level of
investment of smallholder farmers in agricultural enterprises responds to
existing market opportunities.
49 Miah, M.I.A., M.A. Akbar and J.N. Barman, 1992. An Economic analysis of poultry
marketing in Mymensingh district. Bangladesh J. Animal Sci., 21: 51–750 Chohan, T.Z., 1992. Marketing of Poultry and Poultry products in Jhang Tehsil. Unpublished,
M.Sc. Thesis, University of Agriculture, Faisalabad–Pakistan51 Gausi J C K, Safalaoh A C L, Banda J W and Ng'ong'ola D H 2004 Characterization of the
smallholder poultry marketing systems in rural Malawi: A case study of Malingunde Extension Planning Area. Livestock Research for Rural Development 16 (12) 2004. http://www.lrrd.org/lrrd16/12/gaus16097. htm
80
Kumar and Mahalati (2000)52. The study on price spread, marketing
cost and marketing margin for eggs with a sample of 50 respondents
(comprising producers, wholesalers and retailers) revealed that the producer’s
share of consumer price was higher in the producer consumer marketing
channel than in other channels in which one or more middlemen existed .
Pedersen (2001)53 states it is difficult to design and implement
chicken based development programs that benefit rural people without
understanding village chicken production and marketing systems
Islam, (2003)54 studied the existing poultry products processing and
marketing system, its problems and its potential solutions in Bangladesh.
Traditionally chickens were sold alive, because of lacking trust on
slaughtering method (halal or not), fear of disease or dead birds slaughtered,
lack of processing and preserving technology and skill man power. Egg
grading and packing had not yet been developed. As a result producers were
not getting remunerative price that is why middleman were being gainer.
Therefore, modern poultry processing plant, preserving technology and proper
marketing channels were suggested to establish.
52 Kumar V P and Mahalati S 2000, Cost analysis of layer farm in South-West Madhya Pradesh.
Indian J. Poult. Sci. 33(1): 110-112.53 Pederson, CV, Kristensen, AR & Madsen, J. 2001. On-farm research leading to a dynamic
model of traditional chicken production systems. Department of animal science and 86, animal health, the royal veterinary and agricultural university. 2 Groennegardsverj, DK-1870 Frederiksberg C. Denmark.
54 Islam, A.M., 2003. Poultry Products Processing and Marketing System in Bangladesh. Pakistan J. Biol. Sci., 6: 883–6
81
Hellin et al. (2005)55 in his study reported that understanding of
village chicken functioning and marketing structure are a prerequisite for
developing market opportunities for rural households and could be used to
inform policy makers and development workers in considering the commercial
and institutional environment in which village chicken keepers have to
operate. Efforts to improve management of village chicken should therefore be
complemented by a supportive marketing system
Alemu et al. (2006)56 in the study suggested that marketing problem
is one of the constraints for the adoption of poultry technology and poultry
products. Another study has indicated that the six major wholesale egg
markets in India are co-integrated apparently due to performance of market
intelligence functions by the National Egg Coordination Committee (NECC)
which helps in transmitting price signals across the length and breadth of the
country through print media on day-to-day basis.
Saran and Gangwar (2008)57 revealed that the high degree of co-
integration amongst various markets indicates that these markets are
competitive and efficient at the wholesale levels. However, it still remains to
be examined whether the poultry farmers and traders at the grass-root level are
able to realize the prices declared by the NECC.
55 Hellin J, Griffith A and Mike A 2005 Mapping the market: Market-literacy for agricultural
research & policy to tackle rural poverty in Africa. In: Proceedings of an International Seminar, 28th February –1st March 2005, Westminster, London, UK, 110–150.
56 Alemu,Y., Teklewold, H, Dadi, L and Dana, N. 2006. Determinants of adoption of poultry technology: a double-hurdle approach Livestock Research for Rural Development 18 (3) 2006http://www.cipav.org.co. Irrd18/3.count1803html
57 Sandeep Saran, L.S. Gangwar (2008), Analysis of Spatial Cointegration amongst Major Wholesale Egg Markets in India, Agricultural Economics Research Review Vol. 21 July-December 2008 pp 259-263.
82
Maqbool et al., (2005)58. A study showed that marketing system of
poultry is traditional in nature. On an average, the profit margin in case of the
commission agents was Rs.257.13 per 40 kg whereas in case of retailer, the
profit margin was Rs145.2 per 40 kg The profit margin in case of eggs was
42.06% in case of salesmen, 33.07% in case of wholesalers and 48.5% in case
of retailers. Marketing costs incurred by the commission agents was Rs.12.87
per 40 kg. It was also found that middlemen were exploiting poultry producers
by exhorting a large portion of consumer’s rupee. Therefore, producers were
not getting remuneration according to the value of their products. Minimizing
role of middlemen, providing marketing information to producers,
strengthening marketing infrastructure and facilitating producers with easy
access to veterinary services are the important steps that should be taken
immediately by policy makers and other concerned bodies to boost up poultry
farming in Pakistan.
Mlozi et al., (2003)59 Information obtained from analysis of village
chicken production and marketing systems study is highly required to
characterize, conserve and improve the indigenous chicken genetic resource
and to justify resource allocation to rural poultry improvement and
conservation projects
58 Maqbool, A., K. Bakhsh, I. Hassan, M. W. A. Chattha and S. A. Ahmad, 2005. Marketing of
commercial poultry in Faisalabad City (Pakistan). J. Agri. Soc. Sci., 1: 327-331 59 Mlozi M R S, Kakengi A V M, Minga U M, Mtambo A M and Olsen J E 2003 Marketing of
free - range local chickens in Morogoro and Kilosa urban markets, Tanzania. Livestock Research for Rural Development, 15, 2:2003. http://www.cipav.org.co/lrrd/lrrd15/2 /mloz152.htm.
83
Kenea et al., (2003)60 A study on five selected poultry markets in
East Shewa Zone (i.e. Debre Zeit, Modjo, Meki, Chefe Donsa, and Saris)
revealed that the poultry marketing system is primarily characterized by local
selling and buying. The study indicated that there are two major poultry
marketing channels where farmers directly sell to consumers as well as
directly to small retail traders who take the chicken to large urban markets.
Accordingly, it was found that about 42% of all transactions reported were
local farmers selling their chickens to local consumers whereas 39.4% of the
transactions involved local farmers selling their chickens to traders who re-
sold the chickens to urban consumers. Poultry buyers at all sample markets
were traders, consumers, restaurants, farmers, and small-scale urban chicken
farms.
Hellin et al. (2005)61. A study reported that understanding of village
chicken functioning and marketing structure are a prerequisite for developing
market opportunities for rural households and could be used to inform
policymakers and development workers in considering the commercial and
institutional environment in which village chicken keepers have to operate
Gondwe et al., (2005)62. The main advantages of chicken marketing
research are defining the needs and nature of customers and their ability and
desire to buy, scanning the business environment, gathering needed
60 Kenea, Y., Legesse D., and Alemu, Y. 2003: Poultry Marketing Structure, Spatial Variations
and Determinants of Prices in Eastern Shewa Zone, Ethiopia. Proceedings of the 10th annual conference of the Ethiopian Society of Animal Production (ESAP), 21 23 August 2002, Addis Ababa, Ethiopia, p.69 80.
61 Hellin J, Griffith A and Mike A 2005 Mapping the market: Market-literacy for agricultural research & policy to tackle rural poverty in Africa. In: Proceedings of an International Seminar, 28th February –1st March 2005, Westminster, London, UK, 110–150.
62 T N Gondwe, C B A Wollny* and W Kaumbata ,2005, Marketing system and channels for scavenging local chickens in Lilongwe, Malawi, Livestock Research for Rural Development 17 (3) 2005.
84
information for decision-making, reducing risk, helping in production
planning and monitoring and controlling marketing activities
Goutard and Magalhaes, (2006)63 have identified the major
marketing channels of poultry and poultry products Here, the marketing
channel shows that a large number of middlemen are involved in the
marketing chain between producers and consumers. It was found that an
average trader handles between 40 to 100 chickens per week while the middle
man manages 2000 eggs per month. Moreover, it is estimated that the average
number of birds that are sold at local markets ranges from 30 to 400 per day.
FIGURE 2.1
TRADE FLOW OF POULTRY AND POULTRY PRODUCTS IN
ETHIOPIA
Source: Goutard and Magalhaes (2006)
63 Goutard F. and R. S. Magalheas. 2006. Risk and consequence assessment of HPAI. CIRAD.
February.
85
Aklilu et al., (2007)64. Studies on marketing of free range chicken
can also provide clues for management strategies of these chickens especially,
in reducing chicken losses that smallholder farmers experience annually due to
the threat of diseases, especially, Newcastle Disease Access to markets affects
the price and transaction costs and is influenced by access to infrastructure and
information.
2.6 POULTRY EGG CONSUMPTION
De Janvry and Sadoulet (2008)65, highlighted that the majority of
rural households in India are net buyers of food: based on data from the 59th
NSS Survey, estimate that about 74 and 53.7 percent of the marginal and small
farmers, and most probably a higher proportion of rural landless, are net
buyers of food. But the average food intake is largely insufficient to provide
adequate nourishment to all family members: according to a World Bank
Report, in India the largest majority of pre-school children experience protein-
energy malnutrition and micronutrient deficiency (World Bank, 2005).
GoI, (2005)66 Amongst the animal source foods, which are a major
source of proteins and micronutrients, poultry meat and eggs provide more
proteins than swine, cow milk, beef and lamb per unit of intake.
64 Aklilu, H.a., almekinders, c.J.m., udo, H.m.J & van der Zijpp, a.J. 2007a. Village poultry
consumption and marketing in relation to gender, religious festivals and market access. Trop. Anim. Health Prod., 39(3): 165–177.
65 De Janvry A., Sadoulet E. (2008). How to manage a quick response to the food crisis in poor countries with weak policy instruments? Unpublished paper, University of California at Berkeley
66 GoI (2005). Draft National Poultry Policy. Department of Animal Husbandry, Dairying and Fisheries. Ministry of Agriculture. Government of India, New Delhi.
86
GoI, (2008)67 greater availability and affordability of poultry meat
and eggs could contribute to enhanced nutrition (and poverty reduction), given
that rural and urban households allocate more than 15 and 19 percent or their
food expenditure to animal source food respectively, although primarily to
milk and dairy products .
Ravallion et al.,(2007)68, Large commercial integrators are unable to
consistently supply rural areas because live-bird sales dominate the poultry
market in India and moving live birds over long distances is prohibitively
costly, due to transport, shrinkage, and mortality costs .Low prices for poultry
from large commercial integrators, therefore, primarily benefit urban
consumers, which in India include about 107 million people living on less than
US$ 1 a day or about 229 million people living on less than US$ 2 a day .
Rabobank, (2008)69, Improved infrastructure, availability of cold
chain facilities, and changing consumer preferences, away from whole fresh
chickens, could contribute to increasing the supply of ‘affordable’ processed
poultry products in rural areas, for the benefit of the 316 million poor Indian
rural consumers living below the international poverty line of US$ 1 a day, or
the 668 million rural poor living on less than US$ 2 a day.
67 GoI (2008). Household Consumer Expenditure in India, 2007-07. NSS 63 rd
Round. Government of India, New Delhi. 68 Ravallion M., Chen S., Sangraula P. (2007). New Evidence on Urbanization of
Globalpoverty. Development Research Group WPS 4199, World Bank, Washington D.C 69 Rabobank (2008). Indian Poultry Industry. Challenges and Opportunities. Rabobank,
Amsterdam.
87
2.7 CONCLUSION
The above quoted reviews describe the, poultry industry and poultry
entrepreneurs, but none of these studies covered the exclusively on production
and marketing of poultry eggs in Tamil Nadu. Hence, the researcher found
that this gap is more appropriate to tap in the current scenario. In this present
study, an attempt was made by the researcher to assess the knowledge of
poultry entrepreneurs in their industry and their management pattern in
production and marketing of poultry eggs.