Produced by: Agriculture and Consumer Prote

Title: Project on Livestock Industrialization, Trade and Social-Health-Environment ...

II. Major Objectives

2.1 Detailed Objectives of the Study

The objectives of this study are to:

analyze the mechanism through which the growing scale of poultry production and marketing
operations under a changing industrial organization of the livestock sector affects
environmental objectives.

estimation the per unit cost differences between small, medium, and large-scale broiler and
egg producers across different regions of India, and to break down these differences into four
categories: greater technical/allocative efficiency, decreased transaction costs, differential
subsidies for different scales of production, and differential investment in environment
sustainability.

Identify the domain for reform of existing policy incentives in the poultry sector to make that
sector more competitive, and to identify policy options that will address environmental
objectives more broadly through impacts on the scale of poultry operations and organization of
the poultry sector.
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 2.2 Specific Research Questions
The specific research questions addressed in this study are the following:

Why do some poultry farms have higher nominal profits per unit of output than others?

Why do some farms have higher negative environmental impact per unit of output than others?
Do the negative environmental externalities explain relative competitiveness?

To what extent are these differences across farms due to differences in transaction costs,
environmental externalities, and policy subsidies, or togreater/less technical/allocative
efficiency once these other factors have been taken into accounted.

What is the relative importance of each of these explanatory factors across farm sizes?

Do contract farmers earn higher nominal profits per unit compared with independents of
similar scale?

2.3 Specific Hypotheses to be Tested

The following are specific hypotheses to be tested in this study.

Small-scale producers reap lower profits per unit of output than do large producers (i.e.,
economies of scale).

(Profits of small-scale producers are more sensitive to transaction costs than are those of
large-scale producers.

Small farmers expend a higher amount of effort or investment in pollution abatement per unit of
output than do large farmers; and this situation creates a lower capture of environmental
externalities per unit of output by small farms.

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 Small-scale producers are not less efficient if family labour is not costed and true
environmental externalities are taken into account.

Contract and cooperative farmers have higher nominal profits per unit compared with
independents of similar scale.

The higher profitability [of contract and cooperative farms?] is due in part to subsidies received
by the integrating institution.

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