Vertical Integration at Suguna Poultry Farms - A Critical look at Pro Poor Livelihood Issues

The concept of vertical integration with contract farming as an intermediary chain of governance strategy is a commonly adapted ‘mantra’ by various integrators in the poultry industry. The system provides for several advantages in terms of efficiency in harnessing sophisticated technologies and achieving economies of scale even in geographically distributed and traditional small scale farming systems (Soundar Rajan, Suguna, poulvet.com 2007). 

This case study is done in Orissa, the eastern Indian state, to empirically analyse and comprehend the working of this system as practiced by Suguna Poultry Farms Ltd. An effort has been also made to look and analyse the terms of the contract and other features with a view to identify practices that are unique and practiced by the company for promoting poultry among the small holder farmers. The provision for better inputs, finance, assured marketing, etc by Suguna is found to provide a sense of security among the farmers and higher expected returns when compared to independent producers. However, it targets resourceful sections within the small farming communities for obvious reasons, and thus cannot be called pro poor in the true sense.

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