The paper has examined gains of value chain through poultry contract farming and has studied entity-wise concentration of contract farming companies, nature and services rendered by the contracting firms, the relative economics of contract vis-à-vis non-contract farmers, and problems faced by the contract farmers and sponsors. The data were collected from the Venky's Hatcheries Group Ltd. (VHGL), Pune, by survey method and pertains to the year 2007–08. The contract firms have shown preference for the contract farmers from a cluster of villages having easy accessibility. The Venkateshwara Hatcheries Private Limited which has its poultry operations in Maharashtra, Madhya Pradesh and some southern states of India, renders several services including provision of day-old broiler chicks alongwith required feed, medicines and vaccines. The study has revealed that contract farmers have to bear a major portion of their total cost on variable inputs. Among the variable cost, the feed cost alone covers 54.64 per cent in the case of contract farmers and 61.10 per cent in the case of non-contract farmers. The per bird per cycle variable cost for non-contract farmers has been worked out to be Rs 49.47 as compared to Rs 51.83 in the case of contract farmers. In the case of broiler, the profit margin in a period of 8 weeks has been found much higher (nearly double) for contract farmers than non-contract farmers. The study has concluded that despite certain constraints, by-and-large, both the contracting parties are satisfied and are willing not only to continue but also to expand the volume of business under value chain in contract farming.
