CATTLE FEED INDUSTRY Philo Francis “Problems and prospects of cattle feed manufacturing units in Kerala ” Thesis. Department of Commerce and Management Studies , University of Calicut, 2003 Chapter II Cattle Feed Industry CHAPTER I1 CATTLE FEED INDUSTRY Introduction Indian economy is basically an agricultural economy. Growth of Indian economy depends on the growth of the agricultural sector. Available evidence suggests that whenever there is a slowdown in agriculture growth, the overall growth rate of the economy follows the same pattern. Contribution of agricultural sector to gross domestic product is at 33 percent in 1998, thus there is a need for having a strong industry-agriculture relationship in India. Agro-based industries need to have a faster growth rate. It is at this juncture that we have to understand the role of cattle feed industry in India. In this chapter, an analysis of the role of cattle-cum-dairy farming industries in India, with special reference to Kerala is undertaken. The chapter is divided into two parts: Part A discusses the role from Indian perspective; Part B analyses the potential for Cattle Feed Industry in Kerala. PART- A 2.01 Cattle Feed Industry in India One of the thrust areas under agriculture and allied activities during the eighth plan was development of animal husbandry and dairying. Some challenges more acutely experienced in the agricultural sector are (1) the country's ability to maintain food sufficiency (2) capabilities to meet demands arising fiom improvements in income of masses and (3) problems of unemployment and under employment in the rural areas which call for the onfarm and off-farm support1. Keeping in view the growth rate of population, income, demand for food, it is estimated that India would need around 215 million tons of food grains by the end of IX plan. Accordingly, augmentation of agricultural growth should be conditioned. One of the trends to be followed is that productivity in livestock sector continues to be guided by population, rather than increase in productivity levels per unit of production. Researches pertaining to intensive feeding, breeding and management need to be strengthened. India has one of the largest population of domestic animals that provide diverse products such as milk, meat, wool, eggs and skins. Domestic animals also contribute substantially to the draught power. The livestock sector is an integral part of the farming systems and lends sustenance to the rural economy in general2. India's millions led by Mahatma Gandhi, expected the emergance of a welfare State to follow the attainment of independence. Crores of rupees have been spent under the poverty eradication and related development programmes. But poverty could not be removed to the desired extent. It was to remove poverty through economic development that we adopted the western idea of economic growth. It consisted of macro economic development with concentration on mega industrialization. Agriculture and small industries which have potential to provide jobs to millions were relatively marginalized. Mega industrialization approach necessarily leads to less employment generation. This is because it implies very low labour capital ratio. High technology also displaces labour. Consequently millions cannot get gainfbl employment. India has plentiful manpower but less capital accumulation3. Hence, it is necessary to develop a very wide network of improved agriculture, horticulture, forestry, animal husbandry, cottage and small scale industries based on resources available near about or within the village rather than taking away villagers from their home soil to mega cities. This will check migration to cities which causes urban explosion leading to grave environmental pollution and degradation of quality of life Agriculture-industry relationship in a developing economy has been a subject of debate in development literature. This has been based on the role of agriculture in providing food and raw materials and in enlarging the market for industrial developments. But this relationship between industry and agriculture has weakened since the mid sixties due to a reduction in the relative share of a g o based industries output and partly because of slower growth of employment and real wage rate reducing the demand for food and other ago-based industrial products. The total share of ago-based industries has declined from about 7.24 per cent in 1960-61 to about 4.06 in 1979-804. This decline in the share of a g o based industries could be the result of slow growth of demand for such products. Many of the present day advanced economies were able to develop with success mainly because of strong agriculture-industry linkage. The rural to urban migration cannot be stopped in an economically backward democracy with poor infrastructural facilities and few opportunities. In India, though importance was given to agriculture in the first plan period, availability of food grains was insufficient. But in mid sixties owing to green revolution, agriculture sector got a boosting by eliminating imports of food grains. On the other hand, there was a continued sluggishness in the performance of industry. This shows that there must be agriculture-industry growth which is possible through ago-based industies. So promotion and encouragement of such industies are very much important in an economy like India. Dairying is one of such industries. It is rural based, land saving and gender related. Compared to crop production it offers more favourable opportunities of employment. Dairy farming provides a substantial source of income for the landless labourer as well as the marginal farmer. Cattle and buffaloes are integral part of mixed farming systems. Presently India is a nonentity in the international dairy market. The exports of livestock sector are picking up to an impressive growth rate of more than 11 per cent during 19749g5. The basic secret of success of India's dairy development programme is the efficient milk production which is integrated with agriculture. Crop farming provides residues and by-products as feed and fodder for dairy animals. Another factor is the involvement of milk producers in the setting up of their own organizations. The producers in India are ensured of a guaranteed market at remunerative price which acts as an incentive for milk production. The organisation collecting milk from the milk producers now carries the responsibility of supplying them feed and inputs to increase milk production, which optimizes the transportation cost of cattle feed. Feed purchases account for the bulk of the out-of-pocket expenditure on milk production. Balanced cattle feeds are made available to producers at the village level price that provides good value for money spent on cattle feed6. Rakesh Malhotra has pointed out the strength and weakness of India in relation to the dairy industry of India. India's strengths are that she has a rich population of cattle and buffalo, good infrastructural and institutional support, increasing trend in per capita milk availability, higher producer share in consumer price in SAARC, availability of all kinds of machinery and equipment for dairy plants at most competitive rates in the world, successfully implemented white revolution and the people's extensive liking for milk and milk products. Weaknesses are objection to slaughtering of less and unproductive animals, limited beef market, acute shortage of feed and fodder, competition between man and animals for scarce land resources and the fact that majority of milch animals are kept by small and medium farmers7. The animal feed and fodder industry is another ago-based industry, which helps the growth of dairy industry also. Acute shortage of feed and fodder, one of the weaknesses of Indian dairy industry, as pointed out by Rakesh Malhothra can be removed with the help of good animal feed production8. Because of recent technological advancement in the field of agriculture and animal husbandry, a change has occurred in the farming community which as a whole gradually drifted from traditional low productivity to high productive potential livestock farming system. The adoption of mixed farming is the solution for the problems of rural folk who are generally poor, underemployed and unemployed. There is an imperative need for development of integrated livestock production involving improvement of genetic make up, adequate nutrition, health programme, institutional credit facilities and an efficient marketing system. Production of dairy cattle in small land holding in conjunction with primary cereal production creates employment and adds to the domestic income. This could be a worthwhile occupation of women and possibly young people in these areas and can increase their buying power. The new strategy of rural development milk production will not only contribute to national health and wealth but also provide substantial employment opportunities in the rural areas to solve problems of rural poverty and rural unemployment. 2.02 Cattle in India Cattle are of different types in different parts of the country: the greywhite short horned type in the west and north, and the Mysore type in the south of India. While the majority of cattle are desi or unimproved, there are special breeds within each group. Later on, cattle were imported for cross breeding and there are now many research and development programmes for producing new breeds and promoting crossing schemes by which the tropical adaptation of the zebus can be combined with the high yield of the European breed like Jersey, Brown Swiss and Danish Red. 2.03 Breeds of Cattle in India 1) Sahiwal - Found in cities near River Ravi in west Punjab which is derived from the Red Sindhi. This is one of the most productive tropical dairy breeds. The milk yield is 1350 Kgs in one lactation period of 300 days. Adult bulls weigh 550 Kgs, cow 400 K ~ s ~ . 2) Red Sindhi - The original home of this breed is West Pakistan and derived from the hill type. The herds are found in Karnataka, Tamil Nadu, Kerala, Orissa and Punjab. This is one of the best dairy breeds in the Indian sub-continent. Milk yield is 1100 Kgs in one lactation period. Weight of adult bull is 450-500 Kgs, cow 300-350 ICgslO. 3) Gir - This is found in the Mewali, Deoni and Krishna valley1l. 4) Tharparkar - Which came into prominence during 1st World War, found in Sind and Cutch, and 5) Kankrej - found in Gujarat are some of the original breeds of India,. all of which are called desiI2. Exotic Breeds of Cattle (1) Jersey: It is developed on the island of Jersey in British Channel. Milk yield 4500 litres. Weight of adult cow 500 Kgs and of male 600-700 Kgs. Early maturity is its special feature". (2) Holstien Friesion: The breed originated from Holland. 19000 litres of milk in one lactation. Male has a body weight of 800-900 Kgs. Cow has a weight of 500-650 Kgs. In India, cross breed cow yields 46 Kgs of milk per day. 6000-7000 litres of milk per lactation and mature between 28-32 months and once in 12-13 months the next delivery taks place'4. (3) Brown Swiss: This is fiom Switzerland. The milk yield is 5000 litres per lactation. Mature in 28-30 months and once in every 13-14 months delivery takes place. The body weight of an adult male is 700-800 Kgs and that of cow 500-600 JSgslS. (4) Ayrshire: This is originally from Scotland. The milk yield is 12155 Kgs in 305 days of one lactation. The weight of the adult cow is 500-600 Kgs and that of male is 700-800 K ~ s ' ~ . (5) Guernsey: The origin is from the Islands between France and England. The milk yield is 4000 litres per lactation. The weight of adult male is 600-800 Kgs and that of cow is 400-500 K~s". The justification for raising any livestock are (1) More human demand for a mixed diet as man is an omnivorous species and majority are willing to pay higher prices for food of animal origin than for food of plant origin. e.g. milk and milk products and meat. (2) There are many plant foods that cannot be properly digested by man and can be processed into food suitable for man by feeding them to ruminant stock. (3) Ecologically, in a more stable agricultural system, plant and animal are complementary'8. 2.04 Livestock Production in India Livestock is the largest productive resource in rural India. The value of livestock holding of the rural population is placed at about 8.6 per cent of the total value of the privately held productive assets in rural India. (RBI 1975). The livestock sector contributes an estimated 5-6 per cent of the country's gross domestic product. (Planning Commission 1976). Animal labour constitutes 207.06 of the total cost of crop production in India (Mishra 1979). The country produces about 235 million tons of milk which supplies about 40 per cent of animal production consumption (Nair and Vaidyanath 1978)19. The importance of cattle in India's rural economy has long been recognized by the Royal Commission on Agriculture. The value of export of livestock and livestock products has increased from 691.22 crores in 1987-88 to 9253.81 crores in 1996-97, which shows the importance of livestock for the country. It is a major foreign exchange earner for the nation. Table 2.1 The Table showing the value of export of livestock and major livestock products during 1987-88 - 1996-97 (in Rs. crores) Brood Groups Livestock dible8z meat Dairy and 87-88 88-89 89-90 90-91 91-92 9.9 8.7 11.3 4.3 8.5 888.9 945.7 1146.1 1397.1 2308.7 Source:- DGCI & S Calcutta, Dairy India, Export of dairy products also has increased during this period from Rs.247.75 lakhs to Rs.1536.53 lakhs in 96-97. This shows that the growth in livestock products in the country has been comparable to that achieved by other important sectors of the economy. From about Rs.5895 crores in 19505 1 ,the value of output of livestock has grown to Rs.17994 crores in 1991-92 at constant price (1980-81). This indicates three fold increase in 41 years20. Table 2.2 shows the estimate for feed and fodder availability and requirements in India. The strategy for improved animal nutrition under Operation Flood Phase 111 would be to promote technical programmes designed to increase the utilization and conversion efficiency of the crop residue and agricultural byproduct. If animal production has to prosper in the country, it must continue to be based on feeding of agro-based industrial by-products and crop residue which are the major sources of energy and protein in livestock feed. New technology is being developed to utilize cellulose and semi cellulose in high cellulose materials as crop residues, fallen free leaves etc. There is a need to explore the possibility of cheap and balanced ration across regions and dissemination of such technologies among farmers2'. 43 Table 2.2 Table showing the estimates for fee I and fodder availabilitv and re ~irementin India (in million to Particulars Northern Region Zakes Green fodder Kharif Rabi Dry fodder Western Region Cakes 3reen fodder Kharif Rabi Cakes Green fodder Kharif Rabi h y fodder {astern Region Zakes Green fodder Kharif Rabi 3ry fodder All India Cakes Green fodder Kharif Rabi pry fodder Source: Dairy India, 1997. 1986-87 Availability Requirement 1991-92 Availability Requirement 1996-97 Availability Requirement Availability Requirement 3.80 115.16 79.26 107.78 84.00 217.52 255 179.13 3.35 90.4 39.49 33.58 58.47 170.64 200.75 140.52 85.35 147.93 91.35 154.47 97.35 166.15 3.75 71.10 4.58 70.79 5.28 71.66 5.98 73.85 31.18 27.25 49.34 134.31 158.01 110.61 29.98 20.14 49.71 133.72 157.32 110.12 28.98 22.09 50.90 135.36 159.25 111.47 27.98 24.04 52.15 139.49 164.10 114.87 1.87 101.05 2.38 138.27 2.88 192.19 3.38 272.15 2.81 5.42 34.55 190.87 224.55 157.18 2.64 4.75 40.85 261.17 307.26 215.08 2.49 5.05 46.95 363.02 427.09 298.96 2.34 5.35 53.05 514.05 604.77 423.34 12.77 377.64 17.64 425.03 20.74 496.58 23.84 607.20 152.74 174.23 226.36 713.33 839.2 1 587.44 141.00 162.47 280.76 802.83 944.5 1 661.16 134.95 168.12 309.50 937.98 1103.50 772.45 128.90 174.97 338.30 1146.93 1349.33 944.53 2.05 Processing of Feeds Mechanical processing of grains for proper utilization: Most grains are ground, rolled or crimpled before being fed to livestock. Grinding is usually accomplished in hammer mills. A hammer mill grinds by beating grain until it is fine enough to pass through a screen. The size of the screen will determine the degree of fineness. Flaking is effected simply by passing grain between a closely prefer flaked grain to ground grain in the form of a flake. Crimpling is accomplished in a manner similar to rolling except that rollers with corrugated surfaces are used. To young calves and animals too much fineness poses difficulty in feeding and hrther reduces the mixing of saliva and results in less inflow of saliva to rumen which affects digestionu. Pelleting Feeds The ingredients are first ground, and pelleting converts the feed to a free flowing form. This greatly helps in handling. Further, through pelleting, adulteration can be also checked. Moreover addition of urea, molasses or trace minerals to the feed becomes more effective, and animals enjoy the feed while eating ,specially at the time of milking. They are less dusty, and therefore any balance or left over can be easily collected thereby reducing the wastage. Pelletting of hay and roughages can also be done. Cubes are sometimes preferred, and these are larger than pellets. They are used to supplement pastures under grazing conditions". Cooking Feeds Cooking means cooking with or without steam pressure, short period steaming associated with rolling or flaking and roasting and popping. Cooking is found to improve the palatability and nutritive value of feeds, but the cost of cooking may offset these benefits. Field beans, soyabeans, cotton seeds, tapioca and potatoes are better used after cooking24. Wetting Feeds This is found suitable in very dusty feeds. Too much wetting should be avoided especially in mineralized and vitaminised feeds2'. Soaking Feeds Very hard grains which are not mechanized or pressed, like dried beat pulp, soyabean flakes, cotton seeds, tapioca are normally fed in wet form26. Liquid Feeds and Slurries Supplemental nutrients can be added to feeds and fed in the form of liquid or slurries. Slurry or gruel is found helpfbl in calf feeding ration, especially weaned calves. It reduces dust and wastage. 2.06 Cattle Feed In the 1 9 century ~ companies sold 'straight' animal feeds to farmers as an extension of commercial merchantising. Initially, although the straights included some imported cereals for animal feeding, most of the trade was in oil cakes. The early compound trade was an offshoot of oil crushing industry and most products were sold on a commodity basis for blending, by the farmer, with home grown pulses, cereals and root crops2'. During the period 1925-50 compounds were produced in pelletted or nut form to replace the meal and coarse mixture. Feed companies, in the absence of objective nutritional specification, blended the compounds to a target formulation which had, by trial and error, satisfied the legal requirements in terms of oil albuminoids and fibre and crude production requirements of ruminant l i v e s t ~ c k ~ ~ . Since 1950, the change from target to least cost formulation of diets manufactured to a strict nutritional specification has markedly increased the efficiency with which different types of purchased feed have been utilized by dairy cows (Wilson 1975)29 2.07 Role of Least Cost Formulation in Dairy Cows Diets Cost of a dietary formation depends upon the specification of required nutrients which in turn depends on the identification of selected raw material. Different raw materials can be tested and whether they are rejected or accepted depends upon the specification of nutrition at least cost. Whether a specific material has to be included or not depends upon four factors. (1) The price of the ingredient in relation to its nutritional specification. (2) The price of other acceptable substitute for the ingredient. (3) The upper and lower limits on the ingredient fixed by the company for reasons such as palatability, physical quality or the market availability of raw-material. (4) Other considerations such as demand for other scarce resources, labour, finance etc. From this, it is concluded that the cost or attributes of a single raw material are not taken. The raw material can be substituted one for another and any shortage of one can be compensated by redeployment of others. The economic value of raw materials used cannot be fixed. But a minimum level of raw material can be specified and because of special attributes, maximum level also may be prescribed. Again, the decision to include a certain raw material can be made on the basis of the following points such as: (1) Quantitative values of nutrient. (2) The particular nutrient limiting the product specification. (3) The cost- coefficient associate with the limiting nutrients. With respect to the first factor, raw material nutrient value differs from place to place and year to year. With reference to the second factor, specified above, nutritional value differs from brand to brand within a company and between companies because of difference in interpretation of published research or internal confidential research finding. This is because of different marketing objectives, one company giving importance to higher quality and higher price capable of producing better yield. Another may be using cheaper raw materials to produce a low cost feed for less sophisticated sector of market. Coming to the third factor i.e. cost-coefficients, it can be analysed from two levels. (1) The level of nutrient specified: when a low level nutrient is specified, the cost is zero. So there is no economic value (2) The cost of other competing raw material which is complex as the price of raw material varies from one to the other. So, a common feature in animal feed market is the wide swing in raw material price which results in change in price from time to time. 2.08 Definition of Animal Feed Feed, also called Animal Feed, means food stuff grown or developed for livestock and poultry, selected and prepared to provide highly nutritional diet that will both maintain the health of animals and increase the quality of such end products as meat, milk and eggs. Feeds produced today are the result of research or experimentation and chemical analysis, and are the subject of continuing study by agricultural scientists3' (Encyclopedia). According Dr. BT Upase, feeding of high yielding dairy cow is markedly different from that of the average milking or dry cow in the land3'. The cross breeds are high producing animals. Their nutritional requirement is also proportionate to their level of milk production and is essential to exploit and maintain her full inherent genetic milk production potential. Milk production is governed by environmental factors, and nutrition is the most important one among them. The space in rumen is limited and once filled it cannot be refilled unless previous ingesta is digested, absorbed or propelled into the lower digestic rack. Full advantage of limited space available in the rumen is taken by maintaining optimum rate of fermentation in the rumen. The microbial activities in rumen and optimum rate of fermentation can be controlled by adopting stable feeding and management practices. Scientific feeding of dairy cows has been practised for many years. The basis for scientific feeding is the understanding that animals have two functions to perform. (1) Maintenance: This involves keeping all the bodily processes going and keeping the animal in good health without any weight loss. (2) Production: Any nutrients in the ration which are surplus to those needed for maintenance will be available for their growth in young animals or increase in live weight gain in mature animals, the production of milk in lactating cow or the performance of work in the case of bulls and other work animals. The new system was concerned with the use of Metabolisable Energy (ME) as a basis for formulation ratios on the farm. Feeding dairy cows can be described in the simplest way by matching up two basic factors (1) What does the cow need ? (2) How can farm food meet this requirement?. The chief limiting factor in the feed supply to the dairy cow is energy. This value may be expressed in various ways. To standardise the measurement of energy it must be measured on a dry matter basis. Figure 2.1 Figure showing energy utilisation by the cattle GROSS ENERGY DIGESTIBLE ENERGY FAECAL ENERGY METABOLISAB LE ENERGY HEAT INCREMENT TOTAL HEAT METHANE ENERGY URINARY ENERGY NET ENERGY ENERGY USED ON MAINTENANCE ENERGY STORED OR SECRETED 1. Gross Energy Total energy in a feed 2. Faecal Energy Energy lost in the faeces (dung) 3. Digestible Energy The Energy left which can be further used by an animal 4. Metabolisable The energy extracted by the animal from feed to use Energy in maintenance and production 5. Net Energy Collective name for energy used for maintenance and production 6. Heat increment Is the amount of energy used up by converting the ME into maintenance and production for digestion, transport and basic body processes like body temperature, blood circulation et^'^. Feeding of Cow (1) Protein story:- The protein is required to help chew. The required production level is available in two forms. Rumen Degradable Protein [RDP.] and Undegradable Protein [UDP]. (2) Dry Matter intake:- The cow's appetite in terms of dry matter intake per day is related to body weight and also amount of milk being yielded. In case of high yielding cows, the ability to eat is far more than theoretical quantity. The calculated ration is 50 Kgs of silage , 2 Kgs of sugar beet pulp,. 5.5 Kgs of medium energy and 4 % of protein concentrate. (3) Importance of minerals:- A mineral mixture needs to be incorporated in mixed food. Most oil cakes are rich in phosphorous and low in calcium whereas grassland products are rich in calcium and low in phosphorous. (4) Vitamins :- The cow and calf can both manufacture their own vitamin D. Deficiency can be avoided by feeding cod liver oil or vitamin A and D in powder form. (5) Value of Home grown fibrous food. In order to concentrate the diet of high yielding cows use feeding stuff high in digestible nutrients and low in fibre. Such foods are commonly known as concentrates and they include cereal grains and oil cake3'. The current practice of feeding a very large number of low yielding cattle is to allow them to graze on quality grass or to feed them on grains mixed with hay, fallen leaves, dry stock of maize, jowar, bajara paddy and wheat straw and agro wastes such as vegetable or fruit. Sometimes dressing of cakes and bran are also given. Feeding cheap pellet containing 9 to 10% protein, 20% fibre and high sand silica is quite common. This will destroy the productive potential of the milch animals causing deficiency. Table 2.3 Classification of feeding stuff in ascending order of concentrate Group A Remarks Roughages (Low concentration) Fibre: 35% or over Derived from nature Cereal straws Hay,Law-quality silage,Law quality Plant tissues, suitable only for dried grass 'maintenance' purpose Group B Remarks Succulents and high quality roughages (Medium Suitable for maintenance and Concentration) for low-level production Fibre 15- 35% Grass and available silage Root caps Kale and sugar beet tops Group C Remarks Concentrates (high concentration) Fibre below 15% Cereal grains and corn Milling offals Disletters and brewers grain Oil cakes and meal Meat and fish meals Essential food production for high 2.10 Bureau of Indian Standard An earlier report of the committee on livestock feeds and fodder, by the Ministry of Agriculture, Government of India (1974) reveals that there was a deficit of 44% in concentrates and 38% in green fodder. It is estimated by Prasad (1994) that 334 million M T of crop residues and 286 million M T of green fodder are available providing 7.6 million M T of digestible crude protein [DCP] and 184 million M T of Total Digestable Nutrients [TDN].. The concentrate availability is 62.9 million M T providing 9 million M T of D C P and 39 million M T of TDN. A shortage of 378% of energy and 57% of digestable protein is identified. In order to bridge the gap of concentrate deficit, it is necessary to utilise several of the non-conventional feed resources and agro- industrial by-products which are abundantly available". Table 2.4 The table showing the Specifications of Bureau of Indian Standard for cattle feed Type 1 Type 11 1s: 2052,1979 IS. 2052,1979 Re affirmed 1990 Re affirmed 1990 Moisture, % max. 11 11 Crude protein ,% min*. 22 20 Crude fat ,% min. 3 25 Crude fibre, % max. 7 12 Acid insoluble ash, % max. 3 4 Items Source: CLFMA standards for compound cattle feed.*-Except moisture all on dry matter basis Source: Compound Livestock feed Manufacturer's Association, Standard for Compound Cattle feed. G = Guarantee, M = Maximum, R = Rebate, S = Single, D = Double. In order to accept the various agro-byproducts available in the country it is necessary to stipulate specifications of raw material. According to BIS there are three categories of cattle feed Type 1 & Type 11 and Urea Molasses Mineral Block has been prescribed. Compound feeds manufactured conforming to these specifications are suitable to feed cows 1 buffaloes yielding more than 10 ltr of milk if they have to be cost-effective. So, it is necessary to have type I11 and type 1V for less yielding cow, i.e., about 1 to 4 ltrs. The government of Karnataka has given specification for four types of cattle feeds. The Bureau of Indian Standards has not given the standards for agro-industrial by products. The Compound Livestock Feed Manufacturer Association of India has framed normal nutritional values for various raw materials which are shown in the table 2.5. 2.11 Balanced Food Ration In order to balance a ration and to feed a lactating cow properly it is important to know the factors that affect the nutrient requirement of the cow. The most important factors are 1) body weight 2) milk production 3) composition of milk (percentage of fat) 4) stage of lactations of the cow and 5) number of lactations For all feeds in the ration it is important to know the following. 1. Moisture content and chemical composition on a dry matter basis (energy, crude protein, minerals and vitamins). 2. The specific attributes of the feed and the maximum percentage allowed in the diet. For the forages the following should be considered. 1. The stage of maturity is important because it influences the nutritive value of the forages. 2. The physical form of the fiber particles is important also because it influences rumination time. 3. The length of storage of forages influences the residual amount of certain vitamins. The following should be known about the purchased feed. 1. Local availability 2. The cost per unit of nutrient 3. The quality of the feed (free of contamination, uniformity, length of storage etc.) 4. Degree of processing (heating, pelleting, extrusion etc.) Calculations are needed to balance the nutrients supplied by the ovation with the cow's need. Some other aspects of feeding a cow are important but difficult to quantifl. The following is a series of characteristics of a feeding programme that shows how a balanced ration is utilised by a cow. 1. Palatability of the ration. 2. Frequency of feeding. 3. Method of feeding. (e.g. total mixed ration, computerised concentrate feeding, top-dressing of concentrate.) 4. Individual or group feeding and 5. Frequency of cleaning the manger 2.12 By Pass Protein Feed Technology This is a new generation Indian cattle feed manufactured by National Dairy Development Board. By pass protein feed contains a large percentage of solvent extracted protein meals, grain by-produce, whole grains, molasses minerals and vitamins. Recognising the limitations of protein evaluation based on crude protein 1 digestible crude protein, UK and the USA have introduced systems based on Rumen Degradable Protein (RDP) and Undegradable Dietary Protein (UDP) to cover the two types of needs. The basic difference between conventional balanced cattle feed and by pass protein feed is that the basis for formulation is protein l DCP in the former and RDP/UDP besides protein, in the latter. This feed should have a minimum of 28 percent, crude protein, 18 percent undegradable protein and minimum 8% RDP. The recommended allowance per litre milk is 250-300 grns which is almost half of the allowance recommended for conventional balanced feed35. The cost of by pass protein feed per kilogram is 1.3 to 1.5 times higher than that of conventional cattle feed but cost per litre milk is lower because of its lower allowance per litre of milk. Table 2.6 Table showing comparative costs of By-Pass Protein Feed [BFF] and Conventional Cattle Feed [C C F ] per Kg of milk produced I I I BPF CCF Animal Cross breed cow Buffalo 1 I Q C Q C 250 1.05 400 1.28 300 1 I 1.26 ( 500 I 1 1.60 I Q: Quantity of feed required in grams per Kg of milk produced. C: Cost of this quantity of feed at the current price. Source. Dairy India 1997 Sources of by pass protein available in Indian market are cotton seed meal, soyabean meal, maize gluten and guar meal. Solvent extracted meals are generally higher in U D P values than the expeller pressed cakes. The feed undergoes a degree of heat treatment improving the U D P values. This feed used along with Urea Molasses Mineral Block (UMMB) Lick, and / or, Urea treated straw has been found to show excellent response on milk production, and in economics of production. As only choice materials of high palatability are used in BPF manufacture, its acceptance by the animal is excellent. It can support the nutrient requirement of even high yielding animals. The UMMB 1 I lick supplies most of the nutrients generally deficient in a straw based diet. These are urea molasses, mineral supplements, common salt and bran 1 cake. Gwar gum powder, sodium bentonite and lime are used as binding agents. 2.13 Raw Material Research Agricultural Universities and Research Institutions have conducted research and established a host of conventional and non-conventional materials such as ago-industrial by products as versatile feed raw materials. As a result, solvent extracted products namely groundnut cake and extracted rice bran and its extraction, soyabeen extraction, sunflower extraction, coconut extractions have been increasingly used in animal feed. Major feed raw materials are seasonal which also depend on the vagaries of nature. They become scarce at times and are subject to variation in their price. Therefore, it is imperative that the compound feed industry should be able to substitute its raw materials' profitability so as to get uninterrupted production. Researches in India have established 35-40 raw materials which can be alternatively replaced fully or partially in feed compounding36. If any substitute raw material is deficient in any nutritive property this deficit can be overcome by enriching it through fortification. However there is one limiting factor, that is toxicity which is extremely difficult to mitigate completely, though it is not impossible to reduce it to harmless levels. For instance, the aflotoxin in ground nut extract cannot be totally eliminated but it is possible to bring it down to harmless or permissible level. Biotechnology has invaluably contributed to livestock feeding through its animal health care products such as vaccine, antibiotics, antimould and antifungal products. Use of products like enzymes, acidulates, probiotics. vitamins, amino acid deodorants etc is very common in developed countries. Indian feed industry is just catching up with this trend and is expected to indigenize production of biotech products. (Kung. L- 1990 Dildey D 1988). It is pertinent to critically approve the research work done in the U.S.A. which seeks to reduce the total crude protein in the feed by carefully adjusting the concentration of essential amino acids like D.L. Methionine L- lysine tryptophane, leucine, cystein etc. (Hams 199l)37 In the present day normal nutrition science, percentage of essential amino acids is by itself the criteria in formulating the feed, and not mere protein levels. In fact protein molecule is made up of several amino acids both essential and non-essential: Essential amino acids are not synthesized. It may be possible that feeds having higher crude protein level may have unbalanced profile of amino acids. Such high protein feed would only add to the feed cost to farmers without any corresponding benefit. India is deficient in green fodder. Increasing allocation of available land water and other natural resources for growing food grains, cereals and oil seeds for human consumption and cash crops for exports is bound to aggravate the problem of green fodder deficiency for animal feeding. The best course of option for India, therefore, is to utilise her abundant dry fodder sources including straw, kadhis (crop residue) and industrial residues which can be enriched. Sugar cane bagasse, sugarcane tops, cereal straws, forest grass and leaves, tapioca pith are a few of them. These animal feed stuff can be used to advantage in case of low yielding cattle by adopting the complete feed system. A major effort being done in this sphere is that of using cellulosic substrates for solid State fermentation by fungi like trichoderms which increase the nutritive value of these substrates by reducing cellulosic contents and increasing the total protein. (Woodword ,1987)'~ To increase the quality of feed, the Indian feed manufacturers have to provide facilities for carrying out proximate analysis and for testing amino acid composition ,afloatoxin level and antinutritional factors. There should be quality control laboratories attached to feed industry, employing highly qualified animal nutritionists, veterinary scientists and technocrats. They should constantly keep on updating their knowledge and experience by conducting research and participating in conferences, seminars and other programmes at national and international level 2.14 Growth of Cattle Feed Industry in India The Indian feed industry is about 35 years old. It is mainly restricted to dairy and poultry feed manufacturing. Feed production got to a head start after the introduction of planned process of economic development. In the early sixties with a handful of feed factories at about a production of 50000 tonnes of feed animals it rose to a production of 2.5 million tonnes, 5000 per cent in three decades39. At present, in India, production is about 3.0 million tonnes which represent only 5 per cent of the total potential, and feed exports are not very high. The feed industry has modern computerised plants and the latest equipments for analytical procedures and least cost ration formulation, and it employs the latest manufacturing technology. In India, most research work on animal feed is practical and focuses on the use of by-products, the upgrading of ingrediants and the enhancing of productivity. Quality standards of Indian feeds are high and up to international levelbO. Our country has a large number of animal feed manufacturers in small medium and large scale sectors. As per Table 2.7 the total production of CO- operative sector on all India level comes to 4905 Tonnes / day. The Compound Livestock Feed Manufacturers' Association of India popularly known as CLFMA is the sole all-India representative association of manufacturers of nutritionally balanced and scientifically compounded cattle poultry, other animal feed, and fish and prawn feed all over the country. Feed manufacturers in the public, co-operative and private sectors having small, medium and large scale production unit throughout the length and breadth of the country are members of CLFMA. This was formed in 1967 with the objectives of helping the promotion of overall animal husbandry, including promotion of the concept of balanced feeding of animals in accordance with their nutritional requirements for deriving maximum output through productivity improvement. Table 2.7 Table showing compound cattle feed plants under Operation F'lood, 1994 I Plant capacity (tonneslday) State I Andhra Pradesh I Assam I Bihar I Goa 1 1 100 50 Gujarat 1650 Karnataka 300 Kerala 400 Madhya Pradesh 200 I Maharashtra Pondicherry 1 380 5 Punjab 200 Rajasthan 400 Tamil Nadu 300 Uttar Pradesh 200 West Bengal 200 All India Total Source: Dairy India, 1997. 4905 1 1 It has about 100 animal feed manufacturers, 180 medium and large scale production units with a total installed capacity of around 6.0 million tonnes of compound animal feed per annum. Further, it has 80 associate members who are engaged in the manufacture trade and supply of feed additives and other feed inputs, feed plant and machinery, laboratory equipment and chemicals, dairying & breeding, hatcheries and so on. Table 2.8 Table showing the Production of compound animal feed by CLFMA members from 1964 to 2001 All figures are in thousand tonnes Year 1964 1974 1984 1985 1986 Cattle Feeds 25.0 275.4 750.0 867.3 924.8 Poultry Feeds 14.4 164.6 406.7 502.8 567.4 Other Feeds Total 39.4 440.0 1157.2 1370.1 1492.2 2422.0 1991-92 942.8 1479.2 2338.4 1992-93 863.1 15.2 1460.1 2247.3 876.5 14.8 1356.0 1993-94 2539.7 1994-95 1074.6 18.9 1446.2 2810.6 29.9 1512.9 1995-96 1267.8 2937.6 1409.0 24.1 1504.5 1996-97 2775.7 18.8 1997-98 1345.0 1411.9 3 184.8 24.3 1695.6 1463.9 1998-99 2903.O 23.6 1600.7** 1278.7* 1999-00 2794.1 33.9 1519.3** 1240.9* 2000-0 1 * Excluded cattle feed production by one prominent co-op sector member. ** Excluding poultryy feed production by two (in 1999-00) / three (in 200001) prominent private sector members (Integrators). Source: Strategies to meet challenges of globlisation, national symposium held at Goa on 29-9-2001 Table 2.8 shows the production of cattle feeds by CLFMA members. Table indicating showing production of compound animal feed from 1964 to 2000-01 shows that the production of cattle feed starting from 25,000 tonnes has reached a level of 12,40,900 tonnes per annum and total production of 3225000 tonnes. It is projected that production will have reached 5 million tonnes by 2020. Production of cattle feed was at its zenith during the year 1995-96 - 1512000 tonnes. After that, production trends show a decreasing tendency. 2.15 Conclusion From the above analysis, conclusions derived are 1. If the animal production has to prosper in the ,country it must continue to be based on feeding of agro-based industrial by-products and cropresidue which are the major source of energy and protein in livestock feed. 2. There is a need to explore the possibility of cheap and balanced ration across regions and dissemination of such technology among farmers. 3. Proper management and feeding of livestock with nutrious and balanced feed is of utmost importance today in the world of competitiveness wherein a farmer has to derive maximum profit for his survival. 4. Manufacturers of livestock feed, therefore, play a vital role of paramount importance in providing balanced and scientifically compounded animal feed to livestock thereby increasing productivity and profitability to farmers who use high quality feed. With liberalization and many other economic reforms and globalisation of the Indian economy, many multi-national corporations and global giants in animal production are likely to start their business ventures in India. So we Indians have to open our eyes at this eleventh hour to have an overall development of this cattle feed industry. Coming to Kerala, an agriculture predominant State, which depends on the development of agro-based industry, there is a lot of potential for the development of cattle feed industry. It is discussed in detail in Part B. PART-B POTENTIAL FOR CATTLE FEED INDUSTRY IN KERALA 2.16 Introduction Kerala is unique in that, it has a low level of industrialisation and income with high unemployment and literacy. Livestock rearing provides opportunities for augmenting income and employment in the rural households of Kerala. Management of livestock under the backyard system is unique in the State. Operation Flood was successfully implemented here by the Kerala Co-operative Milk Marketing Federation. This has led to a change in the quality of cattle and milk production. There is shortage of green and dry fodder due to lack of fodder cultivation. Cattle feed is the major feed input of dairy farmers. This inevitable demand for cattle feed attracted enthusiastic entrepreneurs to start cattle feed units in the State. Not only that, many cattle feed manufacturers outside Kerala also saw this small State as a potential market for the sale of their products. This has helped to increase competition in the markets. On the eve of launching of 8" Five Year Plan in 1992-93, economic growth rate in the State was 2 per cent; it went up to 7 per cent in 1998-99 at the end of the plan. The sectoral distribution of income shows that the share of primary sector declined from 33.83 per cent in 1993-94 to 28.72 per cent in 1999-2000 while that of the secondary sector has marginally increased. The share of tertiary sector has increased from 41.44 per cent to 50.64 per cent in 1999-2000~'. Unemployment There was a significant improvement in employment opportunity in 1994-95. The number of job seekers declined from 41.52 lakhs to 32.26 in 1995. Unemployment continues to be a serious problem of the State with the latest figures being 41.86 lakh in 2000. It is important to note that 52.27 per cent of job seekers are women42. Agriculture Agriculture in Kerala is passing through a very difficult period as a result of the steep fall in price of coconut and rubber. In 1999-2000, the all State aggregate achievement in agricultural income was 78 per cent, but Kerala State's achievement was over 95 per cent. Production of rubber reached a new peak in 1999-2000. Area under rice cultivation has continued to decline but production has reached a peak of 2203 Kgs per hectare, higher than national average of 1930 Kg. Coconut, which is the major crop in coastal and midland Kerala, provides income and employment for millions of households. The fall in price of coconut has affected the livelihood of a vast majority of small and marginal farmers in the state". Land Use Availability of land for agricultural purpose has been considerably reduced on account of high density of population and diversion of agriculture. Yet data in 1994 shows that nearly 1.7 lakh hectares remain uncultivated for various reasons. Some of the food crops such as grount nut and cashew nut have lost their coverage in spite of the government effort through special programmes. Livestock Livestock rearing provides opportunities for augmenting income and employment in the rural households of Kerala. In view of its suitability for combining with crop sector and sustainability as a household enterprise with the active involvement of farm women, it is emerging as a very popular supplementary avocation in the small farm segment. Backyard system of dairy farming and poultry rearing has a very long tradition in Kerala. But today it faces new challenges as a result of the fast changes taking place in the farm front. Livestock fi-iendly seasonal crops have been replaced by perennial cash crops. It is estimated that about 32 lakh, out of the total number of 55 lakh, households in Kerala are engaged in livestock rearing for supplementing their income44. The homestead settlement pattern, the relatively high level of literacy among women, the highly favourable agro climatic conditions conducive to bio-mass production and the long tradition in livestock rearing are the inherent strengths which the Kerala economy possesses in favour of livestock rearing. The fact is that Kerala produces more milk than its staple food rice. The total deficit of actual sales in excess of actual procurement during 1995 was to the tune of 58 lakh litres. The productivity of cattle inmilk in Kerala was only around 5.26 Kg. which has to be increased through scientific feeding and better management 2.17 Bovine Holding in Kerala Historical data on bovine population in Kerala and India are available from 1921. Kerala State came into existence on lStNovember 1956. It was in 1951 that a livestock census was conducted in the Travancore-Cochin area by the Department of Statistics of the former Travancore Cochin State. The gth, ~ ~ census in 1961, 66,72,77, 82 & 87 were 1 0 ~l,l', 121h, 13thand 1 4 livestock entrusted to the Animal Husbandry Department. The gth Quinquennial Livestock Census was the 1" livestock Census of ~ e r a l a ~ ~ . Before Independence, very little attempt has been made to improve the quality of bovine population. But after the introduction of planning during the first three plans, key village scheme was the most important component of animal husbandry development programmes. The Bovine population rose from 2.1 million to 3.5 million from early twenties to mid seventies. Female population rose at a faster rate. A more comprehensive programme to improve productivity of cattle by giving attention to better feeding, improved breeding, effective disease control measures, scientific management practices and organised marketing facilities was introduced. In order to achieve this objective animal husbandry activities in the State started decades ago and are being continued with much attention and dedication, considering the potential of this sector. To ameliorate the living conditions of the farming community and to increase livestock population and productivity, a number of programmes have been taken up. 2.18 Cattle Development Programmes Planned development of livestock sector can generate additional income, new employment opportunities, supplementary food, extra energy in the form of bio-gas and organic matter. Therefore, this vital sector, if developed systematically, can solve to a great extent, some of the chronic problems of the State particularly the problem of unemployment under employment, rural poverty, malnutrition sub-optional utilisation of resources and even energy crisis. The main objectives of cattle development programme are;a) Upgradation of the nondescript and low producing cattle of the State b) Increasing milk production in the State c) Increasing meat production and making available animal protein to the masses d) Increasing nutritional standard of the people of the State. e) Providing self-employment to the rural population. In order to achieve these objectives the following schemes are implemented by the Department. 1. Intensive cattle development projects 2. Calf rearing schemes 3. Livestock farms 4. Fodder development programmes 5. Cattle sterility scheme 6. Extension and training programmes 1. Intensive Cattle Development Projects: This is an integrated scheme with the specific object of stepping up overall milk production in a particular area to targeted level within the specific period by improving the quality of the local cattle using superior germplasm. The project normally covers a population of about a lakh of breedable cows and all aspects of cattle development. Graph 2.1 Graph showing change in adult female cattle population (1977- 1996) 14 12 c Y -m 10 .-E .-g C 8 (D =I t 6 Q) 0 4 2 0 1977 1982 1987 Year l o~rossbreds€4 Indigenous I 1996 The increase in crossbred cattle in Kerala is primarily due to the successful implementation of scale programmes conducted through this scheme. 2. Calf Rearing Scheme: The objective envisaged in this scheme is providing assistance to selected identified smalVmargina1 farmers and agricultural labourers to supplement their income through rearing of cross breed heifer. The selected beneficiaries are provided with a package of service and inputs besides subsidised supply of balanced feed. Subsidy for the feed is given from 4 months of age to 32 months of age or till calving, whichever is earlier. There is provision for providing adequate health cover and insurance benefits to the calves identified. The scheme is implemented with the full participation of the co-operative milk societies. 3. Livestock farms: The livestock farms serve as demonstration units to educate the farmers in the various aspects of management of dairy cattle and handling of milk and milk products. 4. Fodder Development Programme: Raising nutritious fodder is an important activity promoted by the department with an eye on improving the cross breeding programmes successfully. For economic milk production, availability of good quality fodder is a must, and if it succeeds in filling this gap through cultivation of good quality grasses and legumes, it will help to reduce the dependence on concentration for milk production. The fodder development programmes are aimed at propagating intensive cultivation of nutritive fodders to meet the demands of the improved cattle population of Kerala. Measures are taken to augment fodder production which include: a) Establishment of model demonstrationlfodder production plots in the departmental institutions and other private agencies. b) Distribution of fodder slips, fodder seeds and leguminous seed mixture, fertilizers etc at subsidised rates to farmers. c) Propaganda and training facilities in fodder production. 5. Cattle Sterility Scheme: Infertility or sterility is fairly widespread among cross-bred cattle and is a major source of economic loss. The object of the scheme is to find out the causes and chalk out necessary remedial measures. 6. Extension and Training Programmes: The important objectives of any development department is to carry the fruits of research to the rural population and for this, a well organised and effective extension service is absolutely essential. If the development programmes undertaken are followed with the extension support, maximum production potential can be achieved in the Animal Husbandry sector. With this in view, Livestock Management Training centers were established by the department. The major objectives of the programme are: a) Imparting training to farmers on scientific management parctices of Animal Husbandry. b) Arranging special training programmes to economically and socially weaker sections of society namely, Scheduled Castes 1 Scheduled Tribes, women, unemployed youths, Ex-servicemen etc. c) Providing induction training to para veterinary personnel required for the department. d) Imparting re-orientation training about the latest dairy developments. 2.17 Dairy Development Department The Dairy Development Department undertakes programmes aimed at increasing milk production and consumption. The thrust areas of functioning of this department are fodder development, dairy extension and promotion of rural milk marketing. I Rural Dairy Extension and Advisory Service Dairy extension activities are mainly carried out by the Dairy Farm Instructors of the Department. Group discussion classes and indigenous milk products manufacturing demonstrations are held to benefit dairy farmers and rural consumers. Assistance is given for setting up Model Cattle Sheds and \ Dairy Farm Units. Cattle shows at block and district levels are organised to provide motivation for farmers. I1 Dairy Training Centre There are four Dairy Training Centres finctioning under the Department located at Thiruvananthapuram, Kottayam, Palakkad and Calicut. Dairy farmers from different places are brought under one roof and imparted scientific knowledge in cattle management, manufacture of milk products, cooperation etc. Housewives and unemployed women are trained in farm management and manufacture of milk products. Special thrust on fodder cultivation is given in the training programmes for farmers. I11 Fodder resources development programme The Department provides inputs for cultivation of fodder in the State. It extends assistance to sustain and develop these primary organisations. Technological innovations in the Animal Husbandry sectors to Departmental officers on various extension activities carried out through the Department are: (a) Preventive inoculation to livestock is carried out free of cost through the work of Departmental Institutions of the State (b) Prohylactic vaccinations (C)Goreksha camps are conducted to identify and to give support to the elite cows in the rural areas. (d) Infertility camps and systematic follow-up are conducted to reduce the economic loss in dairy cattle rearing and (e) Livestock shows, calf rallies, seminars, group discussion, film shows, AIR programmes and TV programmes are being conducted regularly to motivate and educate the farmers. Farmers are provided assistance for taking up non-conventional feeding practices like enriched straw etc. Fodder programmes are being carried out involving grama panchayaths and Dairy Co-operatives. IV Modernisation of Dairy Co-operatives There are 2553 Dairy Co-operatives functioning in the State. The Department extends assistance to sustain and develop these primary organisations. The Dairy Co-operatives are assisted to purchase modern milk testing equipment, milk cans, chemicals for testing and sanitation for setting up cattle feed mixing units, building for milk collection cum office room, purchase of furniture, working capital, managerial grant for secretaries etc. V Indigenous Milk Products Manufacturing Units The Department is extending assistance for setting up of units of manufacture and marketing indigenous milk products. This programme provides gainful employment opportunity to rural women. 2.18 Kerala Livestock Development Board Limited The Kerala Livestock Department Board is a registered company fully owned by the State government. The Board is responsible for implementing cattle breeding policy of the State with the aim of developing new breed of cattle Sunandhini, for economic milk production under Kerala conditions, to develop fodder resources, to make dairying economical and to impart training to technicians in livestock sector, the input service for cattle breeding programme in the form of frozen semen from different breeds and a testing scheme for the selection of the best breeding bulls to maintain continued genetic improvement of the milch cattle. Under the fodder development programme, the Board selects suitable species of tropical grasses for fodder cultivation under different agro climatic conditions on the basis of the results of screening traits. The selected varieties are multiplied first in the fodder seed farm and then through registered seed growers. The seeds are subjected to quality control. Large-scale fodder seed production through registered seed growers is carried out. About 1000 farmers in Idukki and Palakkad districts are involved in the seed production programme. About 50 tons of fodder seeds are collected annually. 2.19 Kerala Co-operative Milk Marketing Federation Kerala Co-operative Milk Marketing Federation popularly called MILMA was established in April 1980 with its head office at Trivandrum for the successful implementation of this programme in Kerala. The main activities of the Federation is organising of infrastructure work for milk production, enhancement, procurement, processing and marketing of milk products, development and expansion of other allied activities for the promotion of dairy industry and improvement and production of milch animals, manufacture of good quality balanced cattle feed and supply to the milk producers co-operative societies and imparting of technical input facilities. It is the implementing agency of Operation Flood Programme in Kerala. The underlying concept of Operation Flood is all round development instead of single purpose activities. Hence, along with the thrust in procurement and marketing activities, a well planned and time phased effort was made to strengthen the organisational infrastructure. 2.20 Livestock of Kerala Economy in 2000 In 2000, about 68 percent of the breedable cattle of the State was cross bred and 13.91 lakh artificial inseminations were done. As a result, milk production increased from 10.78 lakh tonnes in 82.83 to 25.25 in 99-2000. The livestock population of All India and Kerala is given in Table 2.9. Management of livestock under the backyard system is facing new challenges as a result of fast changes taking place in the farm front replacing the seasonal crops by perennial cash crops. It is estimated that about 32 lakh out of the total number of 55 lakhs households in Kerala are engaged in livestock rearing for supplementing their income. The percentage of workers in Kerala engaged in livestock and allied activities was 8.65 in 1961; it increased to 10.23 in 1991. Table 2.9 Table showing livestock population of all India and Kerala in lakhs % % % increase share in the of previous Kerala census Species 1987 India 1987 Kerala share of Kerala 1996 India 1996 Kerala Cattle 1958.70 34.24 1.75 2045.16 33.96 1.61 -0.8 Buffalo 769.70 3.29 0.43 842.39 1.65 0.20 -50.0 Goats 994.10 15.81 1.59 1152.81 18.61 1.61 17.7 Pigs 107.60 1.37 1.27 127.88 1.43 1.12 4.4 Source: Livestock census all India and livestock census Kerala. Milk production in Kerala has registered a growth rate of 9.3 percent per year as against 47 percent at national level during the last two decades. The per capita availability of milk stood at 2 14 grams per day. Milk is the only product which could maintain its growth rate in relation to increase in demand. Meat production in Kerala comprises beef, mutton, pork and broiler chicken. Out of this, beef is almost entirely from the culled animals brought from neighbouring States. Meat production can be met by internal production if proper policies are laid down for the slaughter of animals in the State. Table 2.10 shows the requirement and availability of livestock products. Table 2.10 Table showing requirement and availability of livestock products Milk (Lakh tonnes) Egg (Million Nos.) Meat (000 Tonnes) Year Requirement Availability Requirement Availability Requirement Availability* 1981 18.62 9.82 29.52 1618 177 508 1 1991 21.24 17.85 347 1 1710 208 12065 2000 23.73 25.25 5063 2054 304 155.08 - Source: Economic Review, 2000. * Authorised sector only. Supply of meat is more or less steady around 50 gm per capita per day. Despite considerable increase in the proportion of high yielding crossbred cattle average milk yield per animal per day remains low at six litres compared to its potential of 8-10 litres. The average productivity attained by Kerala is higher than the national average of 2.78 litre^'^. 2.21 Feeding of Cattle in Kerala The feed resource available to the dairy farmers are roughage, concentrates, compounded feed, crop residues and by products from kitchen waste. Roughage includes green fodder, paddy straw,. Concentrate meals, groundnut cake, coconut cake, tamarind seed, cotton seed etc. Compounded feed includes cattle feeds as Milma, KS, Kerala Feeds, Vijaya feeds, Prima Feeds etc. Animals are fed by grazing and stall feeding. Since grazing land is limited, stall feeding is the most popular method. On an average animals are grazed for about 3 to 4 hours depending upon the seasons. For stall feeding variety of food items are given which are grouped under (1) green fodder (2) dry fodder (3) concentrate (4) compounded feeds and (5) mineral mixture. Because of high population, pressure for non-agricultural use is increasing. Barren and uncultivated land percentage decreased from one percent in 1997-98 to 0.73 percent in 1998-99 which shows a change of 0.27. percent whereas permanent pasture and grazing land decreased by 17.3 percent in 1998-99 which highlights the decrease in green fodder for cattle population. Realising the importance of fodder development in optimising economic returns from dairy activity, the Kerala Livestock Development Board took up fodder development. The total area covered under fodder cultivation is 5331 hectares in 2000 compared to 10026 during 98-99. However, the shortfall in the production of fodder seeds had been made good by stepping the production of root slips/stem cutting. Cattle rearing has been integrated with rice farming system to the advantage of both. Availability of straw for cattle combined with the demand for organic manure motivated the farmer community to own cattle. With the shift in cropping pattern, the area under rice has come down by 50 percent over the last two decades leading to drastic reduction in the availability of straw for feeding cattle. The present level of supply is estimated to be around 20 lakh tonnes which constitute only 30 percent of the estimated requirement. As green fodder is negligible, the entire reliance is on straw supplied from internal and external sources. The internal production of straw has declined and in the absence of any major technological innovation or major development effort to augment fodder or roughage resources it is to be presumed that the State had been resorting to import of straw on an enhanced scale from external sources for sustaining the cattle population as well as milk production. This implies that supply from the neighbouring States has scaled up by 4000 tonnes of straw per day as per the data of Animal Husbandry ~e~artment~~. In the matter of concentrate, two of cattle feed industries in the cooperative sector increased their capacity to 500 tonnes. Another cattle feed plant was started in 1998 in the public sector with a 500 tonne capacity. This production is insufficient to meet the internal demand. The total production of two cattle feed units during the year 1999-2000 was 1.32 lakh MT. This is higher by 44.67 percent over the previous year. Even if production in the private sector is considered, it is not enough to meet the requirements of cattle feed within the State. Cattle and buffaloes have to be fed on coarse fodder of low nutritive value. On the basis of livestock census figures for India from 1961-82, the projection of different species of livestock population has been made for 2000 A.D. For this estimated population the feed and fodder requirements were calculated. As per the estimation, demand for concentrates, green fodder and dry fodder for 2000 AD will be 98.14, 835.09 and 552.62 million tonnes respectively. Estimates of supply are 77.05, 575.00 and 356.80 million tonnes. As such, the supply will fall short by 21.44 percent for concentrates, 3 1.45 percent for green fodder and 35.44 for dry fodder. Table 2.1 1 shows the availability and requirement which also shows the shortfall in feed production48. Table 2.1 1 Table showing the availability requirement and shortfall of feed and fodder in million tonnes Feed and Fodder Availability Requirement Shortfall Concentrates 77.05 98.14 2 1.49 Green fodder 575.00 835.09 3 1.45 Dry fodder 356.80 552.62 35.44 Source: Indian Journal of Animal Science. Report of the Task Force on Livestock in 1997 gives the view that more than 65 percent of animals in the State are cross breeds. Full exploitation of the genetic potential is possible only with better feeding and management. Schemes taken up in the past for fodder development failed to use available land for planting fodder trees, Social forestry programmes and fodder market establishment of inter cropping with perennial crops like coconut should be ~ o n s i d e r e d ~As ~ . on today, nearly 67 percent of breedable dairy animals in Kerala are crossbreeds with yield potential ranging from 8 to 10 litres per day but the actual average milk yield of cross breed animals in Kerala is only 5.6 litres per day. Tables 2.12 and 2.13 show the number of milch animals and average milk yield per animal. Table 2.12 Table showing estimated number of milch animals in 1997-98 and 1998-99 in lakh Year Cow ND Cow CB Cow Total Buffalo 1997-98 5.057 1 1.877 16.934 0.502 1998-99 3.995 12.291 16.236 0.495 Source: Dept. of Animal Husbandry, Government of Kerala. Table 2.13 Average milk yield per milch animal per day in 1997-98 and 1998-1999 in Kg. Year Cow ND Cow CB Cow Average Buffalo 1997-98 1.401 4.357 3.474 4.041 1998-99 1.869 4.358 3.746 4.140 Source: Dept. of Animal Husbandry, Goverment of Kerala. Increasing reliance on purchased inputs, particularly concentrate feed makes production of milk in Kerala less competitive compared to the neighbouring States. The following table 2.14 gives the price of input for cattle. Table 2.14 Table showing average price of feeds in the State from 1993-94 to 1999-00 % '?40 increase over 98-99 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 increase over 97-98 Item Unit Ground nut cake Kg. 5.77 7.2 8.25 10.5 10.95 11.00 0.46 11.20 1.82 Coconut cake Kg. 6.51 6.7 7.5 9.5 10.70 10.83 1.21 11.21 3.51 Gingerly nut cake Kg. 7.25 8.25 10 10.01 10.00 -0.10 10.93 9.30 Straw Kg. 1.4 1.9 2.6 3 3.44 4.04 17.44 4.19 3.71 Grass Kg. 0.6 0.9 1.3 1.5 1.99 2.87 49.22 2.88 0.35 Source: Economic Review, 2000. The above table shows that the cost of production of milk is increasing. Cost of production can be reduced only by increasing productivity through efficient management of crossbreed cattle and increasing the availability of fodder through organised efforts including the utilisation of bio wastes and byproducts that originate from the farm. The recent trend reveals that the farmers are reluctant to maintain even high yielding crossbreed cows during the dry period. Looking from the angle of future prospects for overall animal production and compound feed production, India offers voluminous working animals supplemented with small quantities of concentrates. The semi starved animal can never become fully productive even if the deficiencies are made up during production period. This places heavier reliance on compound feed and oil cake. Compound feed is seen used as a ready to feed alternative to other forms of feed and fodder. Hence higher production of compound feed of good quality is absolutely essential. Better utilisation of local resources such as cassava and coconut cake for feed manufacture also need to be explored. V.H.Kalbande and C.T.Thomas revealed that the cotton seed-cake, coconut cake and yellow maize were comparatively resistant to rumen degradation and are better source of by-pass protein compared with other concentrate feed ingredient5'. This is an encouragement to our State in the field of cattle feed Industry. Replacement of cashew nut meal for ground nut cake in pellet diets will help to reduce the cost of feeds. The cashew nut meal (CNM) was obtained from the cashew nut processing factory. This is also a cordial data for the cattle feed Industry in Kerala, which is an important producer of cashew nut, specially in the northern districts of Kerala. Our country has enormous livestock population, an alarmingly large portion of it being low production. They can be made to yield more through genetic improvement and better feed which is nutritionally balanced and scientifically compounded animal feed. Secondly vast portion of our human population is unnourished and when income increases due to economic development they always look for nutrious animal food products. 2.22 Cattle Feed Industry in Kerala The first cattle feed production plant was set up in Kerala in the year 1970 under the Animal Husbandry Department in the name Livestock and Poultry Feed Plant (L& P) with a capacity of 30 tons per day near Malampuzha. Subsequently the plant was handed over to Kerala Livestock Development Board, and the production capacity was enhanced to 100 Metric tons per day in 1977. On implementation of dairy activities of the State under Operation Flood Programme by National Dairy Development Board, the plant was handed over to Kerala Co-operative Milk Marketing Federation in 1983. Plant production capacity was enhanced to 200 MT I day in 1996. Meanwhile in 1976 Kerala Solvent Extractions Ltd, located at Irinjalakuda, started production of cattle feed which was initially started as the first solvent extraction plant in Kerala in the year 1963. The last three decades have seen KSE became the leader in solvent extraction and ready mixed cattle feed in the State. It started cattle feed production with a capacity of 50 MT per day which has enhanced to fully automatic and modern livestock feed plant of 120MTJday capacity in 1983. In 1987 the production capacity per day increased to 180MTIday and now there are four units, three in Kerala and one in Tamilnadu. The total capacity comes to 1,56,00OMT/per year. The distinct features of KSE Ltd are:(l) It is the front ranker in mixed cattle feed production in India, (2)It has been accorded recognition from Animal Nutrition Society for contributions in cattle feed manufacturing. (3)It is Kerala's first to export mixed cattle feed. (4)It is the first in South India to manufacture and distribute bypass protein cattle feed. It shows that prudent financial management and a futuristic outlook can be the abiding principle in turning the initial setbacks into strength. Consistant growth has been producing good returns. The financial future of KSE is secure and bright. In the year 1985 another cattle feed plant was installed under Kerala Co-operative Milk Marketing Federation at Pattanamkad known as MILMA Cattle feed Plant Pattanacuad with a capacity of 300 MT 1 day. In the year 1986, to cater to the needs of northern districts of Kerala, a cattle feed plant was started at Calicut with a capacity of 240 MTD, under the name, Koyenco Feeds Private Limited. The company has shown very good progress in all areas of operation in spite of all the problems including the tough competition from multinational companies and other competitors. During the year 1997, the company exported cattle feed to other countries. It was modernised by the year 1997. The future of the company looks very bright after the completion of modernisation. In 1995, Prima Agro Products Limited at Cochin started production of animal feed with a production capacity of 60000 MT per year under the brand name of Prima Feeds. Prima Feeds is covered by quality certification of the Bureau of Indian Standards. The company has introduced a quality control system. The Prima Industries Ltd started a solvent extraction unit in 1996 in Palakkad which is expected to supply a substantial portion of the raw material requirement for the Animal Feed unit. Another landmark in the cattle feed production is the starting of 'Kerala Feeds Ltd, at Kalletumkara in Trichur district, a public sector undertaking under State government in the year 1997 with a production capacity of 500 MTD. It started commercial production on 8L Jan 1999. Considering the fact that the company is a relatively new one, it is hoped that it will utilise its optimum capacity in the years to come. The future of the company looks bright. Apart from these, there are quite a few other units also, 'Vijaya Feeds' has a 100 ton capacity. Silipi Agrotech Private Ltd started production in 1996 with 400 ton capacity. Malayalam Solvent Extraction with 75 MTPD started commercial production in 1999. There are a large number of small and tiny units including 12 milk societies which manufacture and sell limited quantities of cattle feed. Many units which have been registered even from the year 1979 are not in a working condition today. For the purpose of study the units are divided into two categories, large concerns and small concerns. The large units include those units with a production capacity of more than 100 tons per day and small units include units with a production of 100 and less than hundred tons per day. 2.24 Large Concerns 2.24.1 Reason For Starting All the large concerns have been established on company basis. The reasons for starting the units were to meet the needs of locality for cattle feed, to make use of locally available raw materials, to maintain the quality of cattle feed as an input to dairy farmers and to meet the competition in the cattle feed market. 2.24.2 Policy Frame Work Policies of these companies are formed by Board of Directors and Heads of the Departments. The companies on the basis of ownership can be divided into the private sector and the co-operative sector. In the co-operative sector there is an internal audit system which is done by a qualified chartered accountant, appointed by the company, who submits the report to the management on a quarterly basis. 2.24.3 Source of Finance The source of financing consists of both borrowed capital and owned capital. In the case of private companies the borrowed capital comes fi-om commercial banks, Kerala State Financial Corporation and from the other sources. In the case of co-operative sector, the main source of funding is from National Dairy Development Board and nationalised banks. Most of the companies have only the initial borrowing and no subsequent borrowings whereas the co-operative sector has subsequently borrowed or obtained subsidy from Dairy Corporation. The rate of interest on these loans varies from company to company from 14 to 19 percent. The companies have given securities for the loan taken by them in the form of land and properties and inventories. Table 2.15 Table showing loans obtained by the units under study Source Amount of loan (Rs.lakh) Rate of Interest Security given NDDB 212.18 18% stock CB 78.52 19% Fixed Asset Varying unsecured Varying stock of movable properties KSIDC 87.60 6.80 Directors 18.00 9.00 CB 88.43 14% Fixed Assets SIPcot 27.21 Varying Immovable properties 14% Fixed asset Inventories and Book debts CB 105.98 272.23 KFC 9.84 Varying Fixed asset Private agencies 26.42 Varying Plant & Machinery with computers Private agencies 57.61 Varying unsecured Source: Compiled by the researcher. For the co-operative sector, the government has given land on lease for 99 years. The loan repayment is made on an yearly basis. All the companies are in the habit of repaying the loan. The clients are satisfied with the financial position of companies. 2.24.4 Capacity The installed capacity is not fully utilised by most of the units. The Table 2.16 shows the installed capacity and utilised capacity. Table 2.1 6 Table showing the installed capacity and utilized capacity of the units Units Installed capacity Utilized capacity [in percentage in italics] 97 98 99 2000 Avg 130643 115505 106127 93547 97645 108693 83 74 68 60 63 70 44210 47309 41314 57983 72403 52644 49 53 46 64 80 59 20210 25586 21538 36247 59620 32640 33 43 36 60 99 54 19112 27575 28251 37539 35382 27572 32 46 47 62 42 46 25246 24071 18856 15500 13492 19444 35 33 26 22 19 27 239421 240046 216086 240896 278543 240998 55 55 49 55 64 55 (MT) A B C D E Total 1,56000 90000 60,000 60,000 72000 438000 Source: Compiled by the researcher. Graph 2.2 Graph showing the percentage of capacity utilised for the period under study by the unit 120 100 - % .- 80- U 5 .- 60- 0 (11 a 40- 20 0 , I 1996 1997 I I 1998 1999 2000 Year Graph 2.3 Graph showing the average capacity utilization of the industry for the period 1996-2000 70 60 - .-0 g 50- CL !4 0 0 Q g 30 - S& 2 0 L 10 0 4 7 1996 1997 1998 Year 1999 2000 From the table, it is clear that full capacity is not utilised by the units. Only unit C has utilised 100% of capacity during the year 2000. In the case of company A, in the year 96, 83 % of capacity was utilised. Later on, for all the years it shows a decreasing trend. On an average the capacity utilised by the company A is 70%. In the case of company B, there is seen an increasing trend from 49% in 1996 to a position of 80% in 2000. In the case of company C from 33% in 1996, it has reached the level of 100% in 2000. Company D also shows an increasing trend up to 1999. From 32 percent in 1996 it has gone to 60% level. But in 2000 again it went down to 42. It has achieved only 46% on an average. Company E it has registered a continuous decrease. From 35% in 1996 it has decreased to 19% in 2000. On an average it has only 27 % of utilisation. The overall production of five units together is 55% in 1996, 97 and 99, increased to 61 % in 2000 showing an overall 55% capacity utilisation. The average utilisation of company A is the highest. The cooperative sector has an average of 56.25. In the private sector it is only 48%. Reasons pointed out for under utilisation of capacity were the high price of raw material, lack of finance and lack of demand during rainy season. Electricity failure, another reason for low production, has been overcome by using generators which again has increased the cost of production. 2.24.5 Production The units are in a habit of preparing production budget. It is prepared on the basis of past budget and based on forecast about the future. To the question of stoppage of production only company A agreed there was no stoppage of production during the period under study. All other units agreed that there was stoppage of production. The reasons pointed out were delay in the supply of raw materials and lack of demand during rainy season. There were no strikes and lockouts in any company during the period under study. 2.24.6 Raw Material A large number of raw materials required and the raw material used can be divided in to four categories: Bran, oil cakes, grains, molasses and others. Bran includes de-oiled rice bran, rice polish maize bran etc. Oil cake includes sunflower cake, soyabeen cake, groundnut cake, coconut cake and rapeseeds. Grains include jowar, maize, wheat etc. Molasses include sugar beat; others include tapioca, mango kernel, tamarind powder, calcium powder, mineral mix. salt and vitamins. The annual requirement is according to the percentage of capacity utilisation and is different for different units. The material requirement of company A is given in the table 2.17. Table 2.17 Table showing Requirement of Raw material in tons for one year Material\Year I I1 I11 IV Coconut oil 507 19 49442 4550 1 45567 Rice bran 57998 6 1985 67293 60725 Cholam 15772 16320 14757 9092 Cotton seed cake 7449 6472 8541 4542 Sunflower 19905 2509 1 26050 29083 > Source: Compiled by the researcher. The materials mixed by units depend upon the formula used by the industry according to the Material Specification and BIS standard. Research is done on a continuing basis to find out the proper mix to get the maximum benefit from minimum cost. Table 2.18 shows the requirement of raw material in quantity and price with percentage of change in price with 1996 as base year. The table 2.18 shows that the raw material cost has increased by 42 per cent during the five year period on an average. In the case of company A, the material price is increased by 7 per cent in 1997,28 per cent in the year 1998. The increase is less during the year 1999 and is only 15 per cent, but it is as high as 42 per cent in the year 2000. In the case of company B, the material cost increased by 7 per cent in 1997, reduced in 1998 by 8 per cent, again decreased to 6 per cent in 1999 and was increased by 3 1 per cent in 2000. In the case of company C, the price increased by 16 per cent in 1997. It is reduced in 1998 and again increased in 1999 by 15 per cent. In 2000, the increase is 40 per cent above the 96 price. In company D, the price is always higher than the price of the other units. The price increased by 42 per cent in 1997,35 per cent in 1998,38 per cent in 1999 and 67 per cent during the five year period. In the case of company E, the price increased by 19 per cent in 1997,23 per cent in 1998,21 per cent in 1999 and 34 per cent in 2000. 2.24.7 Purchase of Raw Material Raw material is purchased through agents and by direct purchases. Majority of raw materials are from other States. Coconut extracted cake is the only raw material that is available in Kerala in plenty. Even for rice brans the units are depending on other States. The rice bran available here has oil content which has to be extracted. Otherwise, the oil content present in the bran will decay the cattle feed produced. As there is no solvent extraction plant in Kerala all the units have to depend on other States. Most of the units have their agents in other States through whom they purchase raw material. Sometimes, the company purchases directly fiom producers and eliminates the agents so that the cost of raw material can be reduced. 2.24.8 Terms of Purchase Only company A makes cash purchases. They are not availing credit facilities. All other firms are making use of credit purchases. Payment for /tiA /L&.?(? 2 - 2 r . ./-jfbog55 7-H PHI 101 /P raw materials is not made in lumpsum, it is paid on deferred basis. In the case of company B, it seems that advance will be paid for about 80% of raw material cost. A certain per cent of the rest will be paid at the time of delivery and the rest will be paid with a credit of three months. In the case of company C, credit purchases are made. The credit period allowed is 30 days in D & E. The main problem of raw material is the inadequacy of it within the State, because of which the units face delay in getting the raw material and so bulk quantity of raw material has to be kept as stock. About the price of raw material the units have difference of opinion. Three of them opine that it is high whereas two units are of the opinion that it is medium. The high cost of raw material is due to the import of oil seed Erom other countries. Oil cake is obtained by extraction of this oil seed. The extraction units are situated not in Kerala but outside Kerala. Usually their charges are high. Another reason is the taxes to be paid on such raw material; central sales tax and general sales tax have to be paid. Transport cost adds to increase of raw material cost. 2.24.9 Marketing According to Table 2.19, the units sold their products within the State itself, except in the case of company E, which exports the product to a foreign country. No unit sells the entire production within the district alone. Table 2.19 Table showing the products marketed and their sales coverage Unit Product Within the District A Coconut deoiled cake Not specified 100 - Cattle feed Not specified 100 - CN Oil Not specified 10 90 Smash Not specified 100 - Pellet Not specified 100 - High energy feed Not specified 1 00 - C Cattle feed smash 15 85 - D Animal feed Not specified 100 E Cattle feed Not specified 80 B Outside State State percentage percentage 20 Source: Compiled by the researcher. 2.24.1 0 Sales Turnover The variation in selling price is noted in all the companies. In the case of company A, the change in price is by 18% in 1997, 30% in 1998, 28% in 1999 and 41% in 2000. For the company B, it is 17% in 1997, 32% in 1998 again only a slight increase in 1999, 32%. But in 2000 it increased to 36%. In the case of company C, it is 18% in 1996,29 in 1998 again the same in 1999 and 24% in 2000; the price is lesser than company B, 32 in 2000. In the case of company E, the change in price is 17% in 1994,32% in 1998, decreased to 29% in 1999 but increased to 42% in 2000. In the case of company D, there is a slight difference; instead of increasing tendency in price, it shows a decreasing trend towards 1999 and 2000, the overall increase being 32%. The cooperative sector shows an average increase of 34% and the private sector shows an average of 32%. The selling price variation is due to increase in material cost, labour cost, overhead cost and also increase in sales tax. All the five units agreed that the variation in price is due to increase in material cost. Four units agreed that along with increase in material cost labour cost also affected the variation in price. Two units pointed out that it is also due to increase in overhead, while two other units pointed out that the increase is also due to changes in sales tax; that is, sales tax is raised to 5%, decreased to 2% and again increased to 5%. Price determination is by the principle of marginal cost as well as total cost. The co-operative sector did it on the basis of marginal cost plus fixed cost plus profit, whereas in the private sector it is based on total cost. All the expenditure plus a profit margin gives the selling price. 2.24.11 Brand Name All the five units market their products using their particular brand name and they think that the brand name is helpful in selling the product. On being asked how the brand name helped the units, they pointed out that the brand name gives an image and reputation to the product. It increases the goodwill and quality assurance is made possible. Well-known brand names are MILMA, K.S., Kerala Feeds, Sunandhini, Prima, Silpi, MSE, Royal Feeds, Ksheera, Menrna etc. 2.24.12 Marketing Channel Marketing is mainly through wholesalers, retailers and direct to consumers. Table 2.20 Table showing the marketing channel of the units under study No. of units Wholesaler Retailer Direct sales 3 5 2 Source: Compiled by the researcher. All the companies sell their products through retailers or agents of the company. They purchase the product from the company and sell through their shop. In the case of the co-operative sector, products are sold through cooperative societies and traditional societies, and to the members of cooperative societies and traditional societies. The products are given at a subsidy rate by the State government and the price will be deducted from the milk supplied by the consumers. The societies are given the product by the cattle feed plant for a 12 days credit. In the case of private sector also, they have started certain milk societies of their own and milk is collected from members and cattle feed is given to them by adjusting with the price of milk. When it was asked to point out the marketing problems faced by the units, the main problem mentioned was competition from outsiders and enterpreneurs inside the State. And about demand, it is a mixed phenomenon. During the rainy season there is lack of demand for the product whereas in the summer season there is over-demand. What is remarkable is that during the raining season production of milk is higher but as demand for milk is lesser, the farmers give less feed to their cattle and the shortage of feed is compensated by green fodder. Whereas in summer, the production of milk is lesser but the demand for milk is higher and the farmers use more feed as the green fodder is not available. Again the quantity of cattle feed will have to be increased. Sales promotion is done through advertisements, poster, and slides and personal contacts. Gifts or any other type of sales promotion are not popular in cattle feed industry. 2.24.13 Market Research All the units are aware of the importance of research. Research has to be conducted on raw material which contains adequate nutritious value and at the same time is available in the market in required quantity. That is both quality aspect and cost aspect have to be taken into account. Quality specification should be a must for the company. This will help the units to face competition from low quality and low price products. 2.24.14 Personnel (Human Resources) The cattle feed units give employment opportunities directly and indirectly. Skilled and unskilled and semiskilled workers are needed to run the units. They come under direct employment. Indirectly, it gives employment by the distribution network across the State. If 1000 are engaged in direct work, 3000 are engaged in indirect work as agents and distributors, all over the country. The farmers who are engaged in milk production activities as well as the dealers who supply raw material for the cattle feed industry depend on these units indirectly. Table 2.2 1 Table showing the strength of employees in the units Source: Compiled by the researcher Table shows direct employment opportunity to 1260 employees and that about 4000 persons get employment opportunity indirectly as distribution agents in loading and unloading activities etc. Self employment opportunities in the field of dairy farming is outside this. Workers are recruited by conducting interviews and, in certain units, by test. The workers are paid on the basis of Time wages. Eight hours is considered as a shift. Four units work on shift basis, and there are three shifts in a day. Even though the workers are more than 100 in number no unit has reported any labour problem. The attitude of management towards the workers is friendly and this leads to good and cordial relation between workers and the management. In all the units, the workers reported that they were satisfied with their employers. Though there is no incentive scheme in any of the units no strikes or lockouts were reported. Problems of workers are supposed to be solved through works committee in the co-operative sector and through negotiation in the case of private sector units. 2.24.15 Power All the units had the same thing to say about availability of power, which is inadequate, due to the power cut during the summer season. But the units have installed their own generators to overcome power failure and break in production. The rate of electricity is also high and unreasonable, they said. Only one unit got electricity at concessional rates. 2.24.16 Government attitude towards the industry The units are not at all satisfied with the help given by the government. Only the co-operative sector units have been given any help by way of land on lease. Subsidy was given to the industries during the initial period. Financial help came to co-operative sector by National Dairy Development Board. The government assisted in the marketing of the product of the co-operative sector. 25 percent of the production is purchased and sold by the government through co-operative milk societies and given at subsidised rates under the calf betterment programmes of Animal Husbandry Department. During certain years a reduction in sales tax rate was given to co-operative units. Both the private and co-operative sectors are not expecting any sales tax rebates. Exemption from sales tax is not feasible for the State Government. But a reasonable reduction in the tax rate is expected. They also do not expect any marketing help from the government. The co-operative sector expects continued help from the government. 2.25 Procedure of Production of Cattle Feed Most of the raw material used for the production of cattle feed is purchased from outside the State. The sample of material is taken to the lab for checking the material according to the material specifications given. As the availability of material is seasonal a list of materials with material specification is kept. According to the availability and specification as per the BIS standard the materials are selected. Every raw material should be in the smash form. The grains, cereals, and even coconut cakes should be powdered. All the raw materials are fed into "Intake conveyor" and lifted up with the help of an elevator to the top floor. The materials pass through a vibroscreen to be separated into grindable and non-grindable. The grindable goes to the grinding bin. There are three grinding bins. After the grindable material is ground in the grinding bin, it again goes to the distribution conveyor by means of the elevator. The non- grindable raw material also reaches the distribution conveyor directly after passing through vibroscreen. Now the raw material is ready for mixing. Six different products are manufactured. Each product will have its own formula for the mix. The materials is transferred to weighing hopper where the raw material is weighed according to the formula with the help of Microsoft computers. This raw material reaches the Batch Mixer whose capacity is one ton. The product quantity to be produced is as per the requirements of the sales department. Everyday the demand will be projected by the sales department. Accordingly production will be carried out. Along with raw material, mineral salt and additives are added in the weighing hopper. This mixture will be in the batch mixer for a particular time. Number of minutes will be specified. The batch elevator takes the mixture to the pre-molasses Bin. molasses mixture is added by molasses mixer. This is done by spraying molasses. This material again is elevated to the top by molasses elevator. After that if the formal mix is for mash it is directly passed to the pre bagging bin of mash called Mash Bin. If it is for pellet, it will be passed to pre-pelleting bin for pelleting or producing pelletised feeds. This will be passed through a feed container in which the feed will be steam cooked. Again it passes to pellet mix. The temperature of pellet will be about 95' C, then it passes through a pellet cooler. The cooled pellet will again be elevated to the top by pellet elevator. This will pass through pellet sieve to the pre-bagging bin of pellet. From these pellet bin and smash bin, pellet and smash will be bagged according to the requirement of the company. From there, through the slat conveyor it passes to the stitching machine where bag is stitched according to weight. This will move to the godown through the conveyor belt where it is sorted and stored into the godown according to the product differentiation. The loading is done straight from the godown to the transporting vehicle. 2.26 Conclusion From the above analysis it is clear that Kerala has the potential for the development of cattle feed units. The agricultural relationship of cattle feed industry and the presence of viable raw material for the industry is the strength of State for the growth of the industry within the State. The encouragement fiom the part of government of Kerala towards the livestock development, the steps taken by the Animal Husbandry Department towards betterment of quality of cattle, successful implementation of Operation Flood by Kerala Cooperative Milk Marketing Federation and the non-availability of green fodder due to the decrease in the pasture and graze land and paddy cultivation, increase the demand for compound cattle feed. Yet there is no commercial footing in Kerala for the cattle feed industry. There are only a few large scale units in Kerala and the existing units are not satisfied with their present profitability position. At the same time the outside manufacturers are attracted to Kerala as a potential market for their products. This situation leads to have an analysis of working of the units. To have an in-depth study, financial statement analysis and cost structure analysis are done in the next chapter. References: 1. Jayant Patil, "Consolidating the gain, of Agricultural production", yogana v01 42 No.8, 1998, p.16. 2. Paroda, R.S., "Meeting New challenges in Food production", yojana, v01 42 No:& 1998, p. 16. 3. Vasant P Pethe, "Poverty Eradication :- A New paradigm", yojana, v01 42 No: 8, 1998, p.87. 4. Davendra Thakur, "Trends in Indian Economy" v01 3 "Trends in Agro Industrial sector", 1993, p.29. 5. Anjani Kumar ,Jabir Ali, Harbir Singh, "Trend in Livestock products in India", Indian Journal of Agricultural Economics, vo1.56 No.4,200 1,p. 657. 6. Aneja, R.P., "Secrets of success", Dairy India, 1997 P. 18. 7. Rakesh Malhotra, "SAARC Dairy Grid", Dairy year Book 2001, pp.199201. 8. Ibid., p.200. 9. Gopalakrishnan CA Morely Mohanlal.G., Enterprises for Rural Development", 1985, p.8. 10. Ibid., p.9 12. Ibid., p.1 l 13. Ibid., p.12 "Livestock and poultry Ibid., p.13 Ibid., p.14 Ibid., p. 14 Ibid., p. 15 Payre WJA, "An in introduction to Animal Husbandry in tropics", Long man scientific and technical long man group, 1990, p.20. Narayanan Nair K. "Bovine holding in Kerala-Analysis of factors govern Demand and supply", Center for Development studies, 1980, p.8. Saxena H.C., "Cattle feed production", Dairy India, 1997, p.2 17. Gopalakrishnan C.A., G.Morley Mohanlal, "Live stock and poultry enterprises for Rural Development", 1985, p. 116. Ibid., p.116. Ibid., p. 116. Ibid., p. 117. Ibid., p. 117. Ibid., p. 117. Broster W.H., Swan H., "Feeding strategy for high yielding Dairy cow", 1979, p.40. Ibid., p.40 Ibid., p.41 30. The New Encyclopedia Britannica, vo1.4, 15' edition, p.714, 1992 31. Broster W.H., Swan, H., "Feeding strategy for high yielding Dairy cow", 1979, p.50. 32. Kenslater, "The principles of Dairy Farming", 1991, pp. 123-124. 34. Anaokar, S.L., "Bureau of Indian Standards", CLEMA standards for compound Animal Feed, 1995, p.5. 35. Tripathi, A.K., "New concepts in Feeding" Dairy India 1997, pp.305-308. 36. Nandakumar P.S., "Feed Supplements / Additive A dispassionate and forthright description" Partner in progress, CLEMA in Animal production, 1997, p.7. 37. Nandakumar, P.S., "CLEMA: A profile". Partner in progress CLEMA in Animal production, 1997, p.9. 39. Andrew. W. Speedy, "The global Livestock Revolution opportunities and constraints for the Feed and Livestock industries." Paper presented at National symposium on "Strategies to meet challenges of globalization." held at Goa on 24-09-01. 40. Ibid. 41. Economic Review 2000. State planning Board, Thiruvanathapuram. P. 3. 42. Ibid., p.20. 43. Ibid., p. 5. 44. Ibid., p. 55. 45. Report on "Fifteenth quinquennial Live stock census", Government of Kerala, Department of Animal Husbandry, 1996 p.2. 46. Economic Review (2000), p..57 47. Report on "Task Force on Livestock" 28" Feb 1997 Department of Animal Husbandry Thiruvanathapuram, Government of Kerala. 48. Parmatrna Singh, C.B., Tiwari Tanya V.K., "Estimation of future demand for feed and fodder in India", Indian Journal of Agricultural science, vol. 61 No: 8, 1991, pp. 876-879. 49. Report on "Task force on Livestock." 28" Feb. 1997 Department of Animal Husbandry, Thriruvananthapuram, Government of Kerala. 50. Kalbande, V.H., Thomas C.T., "Digestion kinetics of some concentrate Feed in gradients technique", Indian Journal of Agricultural science, v01 69