Introduction

INTRODUCTION

  • Information regarding the future demand is essential for both new firms and those planning to expand the scale of their production.
  • It is much more important where large-scale production is being planned and where production involves a long gestation period.
  • Information regarding future demand is essential also for the existing firms to avoid under or over-production.
  • Accordingly they will have to acquire inputs both men and material, plan their production, advertise the product and organize sales channels.
  • The firms are hence required to estimate the future demand.
  • As per capita incomes rise in Third World countries, the demand for livestock products - meat, milk, and eggs - not only rises faster than that for cereals in these countries but also more rapidly than demand for livestock products in the developed countries.
  • This in turn influences the demand for cereals and other staple foods used as livestock feed.
  • Livestock production is also an important source of income and employment in the rural sector; it helps to meet equity objectives by contributing cash income to small farmers in the Third World.
  • Besides providing draft power and manure, livestock in developing countries convert many agricultural wastes and by-products into food. Finally, livestock products contribute to export earnings.
  • Livestock sector plays a significant role in the welfare of rural population of India. Of the total households in the rural area, about 73 per cent own livestock.
  • More importantly, small and marginal farmers account for three quarters of these households.
  • Income from livestock production accounts for 15-40 per cent of the total farm household’s income in different states. Thus, an increase in demand for livestock products, can be a major factor in raising the income and living standards of the rural households.
  • In the low-income countries, the demand for livestock products is more elastic than the demand for cereals.
  • This implies that with the rise in per capita income, the demand for livestock products would rise faster in the third world countries.
  • The demand projections for livestock products corresponding to 5 per cent GDP growth rate, generally regarded as closer to the realistic situation.
  • The estimated consumption in the year 1993 was of 45.02 million tonnes milk, 0.78 million tonnes mutton and goat meat, 0.49 million tonnes beef and buffalo meat and 0.25 million tonnes chicken and 0.54 million tones eggs.
  • In the year 2020, the demand would reach 147.26 million tonnes for milk, 12.72 million tonnes for mutton and goat meat, 1.15 million tones for beef and buffalo meat, 0.81 million tones for chicken and 2.58 million tonnes eggs.
  • During 1993-2020, the average growth rate (weighted) for the total domestic demand of milk has been found to be 4.9%.
  • It is 13.7% for mutton and goat meat, 3.5% for beef & buffalo meat, 4.8% for chicken and 6.2% for eggs.
  • These growth rates indicate that the meat industry has bright prospects in the country.
  • Techniques of forecasting are many but the choice of a suitable method is a matter of experience and expertise.
  • To a large extent, it also depends on the nature of the data available for the purpose.
  • In economic forecasting, the classical methods use the historical data in rather rigorous statistical manner for making the future projection.
  • Various methods of forecasting demand may be grouped under the following categories
    • Survey methods
    • Market studies and experiments
    • Statistical or analytical methods and
    • Other methods.
Last modified: Saturday, 2 June 2012, 7:23 AM