Depleting green pastures, droughts make it an open field for animal feed firms

HYDERABAD: Fast-depleting green pastures across India as a fallout of rapid urbanisation and frequent droughts owing to inadequate monsoons, coupled with booming dairy industry is boosting the prospects of animal feed manufacturers, who are looking at adding capacities. Reports by various agencies, both private and public, indicate fast depleting green pastures allocated for animal grazing, which are currently at 7 per cent of total arable land and estimated to further plunge to around 6 per cent by 2020 and 5 per cent by 2030.

Awareness among the dairy farmers over the benefits of higher productivity through manufactured feed is also helping the animal feed manufacturers to augment capacities through greenfield and brownfield expansions.

Several Indian manufacturers of compound feed or nutritionally balanced animal feed such as Godrej Agrovet, Cargill India and Anmol Group, among others, have been seeing impressive increase in the number of farmers under their networks buying sizeable quantities of animal feed.

A report by YES Bank, titled 'Indian Feed Industry : Revitalising Nutritional Security', says the Indian animal feed industry is barely meeting the growing requirements of farmers. Though the domestic animal feed industry is growing at 8 per cent, with poultry, aqua and dairy contributing significantly, only 11 per cent of the farmers' needs are currently being met by the industry.

Against a requirement of 67 million tonnes now, the industry is able to supply only 7.33 million tonnes, which includes 4 million tonnes by the private sector and 3.33 tonnes by co-operatives.

“The number of farmers under our network is increasing at the rate of 7-8% year-on-year while the cattle population registered with us has increased by 13-14% yearly,” said Balram Yadav, Managing Director of Godrej Agrovet, India’s largest compound feed manufacturer.

Buoyed by increasing demand, Godrej Agrovet has decided to spend at least Rs 100 crore on an average annually on both modernising manufacturing facilities as well as augmenting capacities. The company currently has 14 cattle feed manufacturing plants spread across the country, apart from 20 production facilities that focus on feed for poultry and aquaculture.

Another large animal feed producer, Cargill India, in February commissioned its 1.2 lakh tons feed facility in Bhatinda, Punjab, with an investment of Rs 90 crore and is now looking to expand capacity. The Indian arm of the US giant Cargill group is also looking to operate in new regions through own and leased out facilities.

Cargill India’s managing director Achyuth Iyengar said the new plant will help the company cater to more number of dairy farmers in the Punjab, Haryana and Rajasthan regions, who have been increasingly shifting to compound feed.

“Our total feed production has now reached over 1.5 lakh tonnes and is in line with our expanding customer base wherein we are adding 40,000 farmers ever year,” Iyengar said.

According to a report by advisory firm Suruchi Consultants, titled ‘Dairy Industry Vision 2030’, even as pastures and animal grazing declined, the demand for dairy products was expected to grow at 9-12% till 2030. Further, the report said, “with the increased pressure of urbanisation and modified land bills, it (green pastures) could further reduce to below 5% by 2030.”