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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.