Subject: Agriculture

Why in the News

Gross value added from India’s livestock sector was about 34% of that from crops in 2013-14, and the ratio touched 57% in 2023-24, the last year for which official data is available. The value of milk, eggs, meat and other animal products from Indian farms is steadily approaching that of foodgrains, oilseeds, sugarcane, cotton, vegetables, fruits and spices. That progress is being undermined by spiralling feed ingredient costs. The tension is that the same grain the animal economy runs on is also the feedstock the fuel blending programme is turning to, and the government cannot protect both at once.

Components of livestock feed

1. Energy comes from maize: Broiler chicken feed is 55-65% maize by weight, egg laying bird feed is 50-60% maize, and cattle feed 15-20%.
2. Protein comes from oilseed cakes and meals: Broiler formulations carry 25-30% soyabean meal and layer feed 18-20%. Oilseed cakes and meals make up 40-50% by weight of compound cattle feed.
3. The balance is micro ingredients: Animals also need minerals such as calcium and phosphorus, vitamins, dietary fibre, fat and synthetic amino acids such as methionine and lysine.

How far have feed ingredient prices risen?

1. Maize at Erode: The average price at the Alangeyam market in Tamil Nadu’s Erode district rose from Rs 2,537 per quintal in August 2025 to Rs 2,759 in August 2026, and stands at Rs 2,810 now.
2. Soyabean meal at Indore: Prices of 50% protein soyabean meal on the National Commodity and Derivatives Exchange rose from Rs 38,186 per tonne in August 2025 to Rs 58,156 in August 2026. They have fallen to Rs 50,000 this month, against a September 2025 average of Rs 35,327.
3. The peak and the switch: Soyabean meal has come off a peak of Rs 63,000 to Rs 64,000 per tonne, and maize began hardening just as it eased.
4. The other protein meals: Groundnut and rapeseed oilcakes trade at Rs 38,000 and Rs 33,100 per tonne against September 2025 averages of Rs 24,188 and Rs 24,479, with cottonseed extraction at Rs 35,500 against Rs 30,500 and rice bran extraction at Rs 20,500 against Rs 13,669, on Solvent Extractors’ Association of India data.

Why did egg prices climb this year?

1. The current level: Egg prices in Delhi are at Rs 600 per 100 pieces on the indicative poultry farm-gate rates set by the National Egg Co-ordination Committee (NECC), and retail prices rule at Rs 7-9 per egg depending on whether the purchase is a 30 piece crate, a dozen or a smaller lot.
2. The July spike: NECC suggested prices scaled Rs 725-730 per 100 eggs in July, and the month’s average of Rs 670.5 was 38.7% higher than a year earlier.
3. Weather cut supply: The NECC’s stated explanation is that an extended summer and delayed monsoon rains linked to El Nino caused water shortages, heat stress and rising bird mortality, alongside a July spike in maize and soyabean meal prices.
4. Demand is seasonal: Egg demand and prices generally rise after Diwali through winter and the spring season, and fall with rising temperature and humidity. The real dip runs through Shravan, Pitru Paksha, Navratri, Diwali and Chhath Puja, when many Hindu households avoid eggs.

Why does feed cost decide the producer’s margin?

1. Feed dominates the egg cost: Layer feed prices have climbed from Rs 24-26 to Rs 30-32 per kg over the last four months, and feed constitutes 65-70% of a farmer’s egg production cost.
2. Broiler margins have narrowed: Broiler feed prices have surged from Rs 40 to Rs 46 per kg over the same four months, and total broiler production cost is now roughly Rs 110 per kg.
3. The price has fallen back towards cost: Farmgate broiler prices crossed Rs 150 per kg of live weight across north India in late June and early July, and have settled at Rs 115-120 per kg after Shravan.
4. The bird takes time to pay back: Farmers raise day old chicks of 35-45 gm to slaughter ready weight of 2-2.5 kg over 35-42 days. Layer hens begin laying at 18-20 weeks, continue until 70-72 weeks, and lay 250-300 eggs a year.

Why is the supply outlook uneven between maize and soyabean?

1. Soyabean looks comfortable: Farmers sowed almost the same area under soyabean this kharif season as last year, and the crop due for harvest in October and November is reported normal to good with no major insect pest or disease incidence.
2. Imports have padded the stocks: Some large poultry companies with captive feed manufacturing facilities have contracted soyabean imports estimated at 0.9 million tonnes in 2025-26, improving carryover stocks for the new marketing year.
3. Maize is the worry: Kharif maize acreage is down 4.1% on government data and the yield outlook is weak, on the assessment of CLFMA of India, the compound livestock feed manufacturers’ body. El Nino could also hurt the rabi maize crop.
4. The output projection has turned: The US Department of Agriculture projects India’s maize production in 2026-27 at 50 million tonnes, a sharp decline from the record 55.1 million tonnes of 2025-26, which was itself a substantial jump over 43.4 million tonnes the year before.

How does ethanol policy tighten the feed squeeze?

1. Sugar feedstock is being closed off: With sugar prices rising, the Centre is expected to bar mills from using cane juice or B-heavy molasses, the intermediate molasses stream that still carries high sucrose, for manufacturing ethanol in the crushing year beginning October.
2. The load shifts to grain: Grain based distilleries carry the blending programme when cane feedstock is restricted, and maize is the grain they draw on.
3. Diversion itself may be reviewed: If maize prices keep rising into livestock feed costs and consumer prices for milk, eggs and meat, the diversion of the feed grain to ethanol production could itself come up for review.
4. The blending target is the casualty: Meeting the existing 20% ethanol blending in petrol (E20) would become difficult in 2026-27.

Challenges to India’s livestock feed supply

1. Maize productivity is low: India’s average maize yield sits well below the world average, so additional demand has to be met by planting more area rather than by raising output per hectare. Eg. Single cross hybrid seed coverage remains limited across the rainfed kharif maize belts of Rajasthan and Madhya Pradesh.
   The Fix: Drive seed replacement with single cross hybrids in the rainfed kharif districts and expand irrigated rabi maize, which yields far more per hectare.
2. Protein meal supply carries no import ceiling: India does not permit routine imports of genetically modified soyabean meal, so domestic meal prices have no external cap when they run up. Eg. The Centre allowed a one time import of 1.2 million tonnes of de-oiled genetically modified soyameal in 2021 after poultry feed costs spiked.
   The Fix: Notify a standing tariff rate quota for de-oiled soyameal that opens automatically once domestic prices cross a declared trigger.
3. Dairy runs on a fodder deficit: Cattle and buffalo rations depend on crop residue and grazing land that is shrinking, which pushes more of the ration onto purchased compound feed. Eg. Fodder crops occupy roughly 4% of India’s gross cropped area and that share has not expanded in decades.
   The Fix: Bring fodder crops into seed subsidy and assured procurement in the major milk shed districts, so a farmer growing fodder is not worse off than one growing grain.
4. Poultry carries weather risk without cover: Commercial layer and broiler units sit outside the livestock insurance cover that large ruminants receive, so mortality in a heat wave is borne entirely by the farmer. Eg. The livestock insurance component of central animal husbandry schemes covers cattle, buffalo, sheep, goat and pig, and not commercial poultry.
   The Fix: Extend livestock insurance to commercial poultry units with a temperature triggered payout, so relief does not wait on a mortality survey.

Conclusion

Feed, not disease and not demand, is what now sets the price of an egg, a kilogram of chicken and a litre of milk. The animal economy has grown faster than the grain and oilmeal base that feeds it, so a single bad grain year passes straight through to the consumer. The decision point is the feedstock order for the coming crushing year, which settles how much grain the fuel programme takes before the feed industry gets to it. The marker to watch is whether the government caps grain diversion to protect feed supply, or holds the blending target and lets feed prices clear the market.

Back2Basics

1. What the NECC is: A body of poultry farmers formed in 1982 to co-ordinate egg marketing and stabilise prices for producers.
2. What it does: It declares daily suggested farm-gate egg prices for each of its producing and consuming centres, which the trade uses as the reference rate.
3. Its standing: The prices are indicative and carry no statutory force, and the body is a producers’ association rather than a regulator.

Matching Previous Year Question

“[2015, GS3, 12.5 marks] Livestock rearing has a big potential for providing non-farm employment and income in rural areas. Discuss suggesting suitable measures to promote this sector in India.”