Emu business took flight on interest-free govt loans

Nabard website says birds bankable, economic value of a pair Rs 16 lakh

The Union government was giving interest-free loans to ‘entrepreneurs’ setting up emu farms, which have now turned into a multi-crore scam in Tamil Nadu. These loans were granted under the central government’s Poultry Venture Capital Fund and were routed through the National Bank for Agriculture and Rural Development (Nabard) and commercial banks.

Though the scheme was for all poultry, emus find a mention in the scheme documents and several emu farms in southern states, including Tamil Nadu, have availed themselves of loans under these schemes, say officials.

A senior Nabard official looking after the investment credit department said, “Nabard was just acting as an intermediating agency to pass on the subsidy. The loans were given not only by public sector banks, but by all commercial banks, Nabard was only refinancing them and passing on the subsidy.”

The scheme was originally floated as a pilot titled “Venture Capital Scheme for Dairy and Poultry” by the Department of Animal Husbandry, Dairying and Fisheries of the central government in 2005-06. In 2009-10, a separate scheme called Poultry Venture Capital Fund was carved out of this to focus more on the poultry sector. That scheme was further modified into Poultry Venture Capital Fund (Subsidy) Scheme with effect from April 2011. Under the new scheme, “Breeding farms for low input technology birds like turkey, duck, Japanese quail, emu, etc” were eligible for “back-ended capital subsidy of 25 per cent of the total outlay”.

According to Nabard officials, over Rs 10 crore has been released as government subsidy under the latest scheme since April 2011.

According to the website, a pair of ostriches (including emus) can earn up to $30,000 (over Rs 16 lakh) in a period of 12 months. The projection is based on a paper presented by an executive of a French company at a 1997 Indo-French food seminar in Bangalore.

According to the projection, a pair of emus is capable of producing 30 offspring in a year. These 30 birds can produce meat of 60 pounds each. At the rate of $10 a pound, the meat alone would fetch $18,000 (Rs 9.72 lakh) every year. In addition to that, emus were said to produce hides worth $10,500 (Rs 5.5 lakh) every year, not to mention the plumage value of $1,500 (Rs 81,000).

These unverified estimates put out on the Nabard website were the basis on which the farms were designed. Many websites peddling emus also quote the same or similar figures. “It gave newcomers an assurance that since state-owned institutions were involved, there was a legitimate business. Even now, farmers are hoping a Nabard-funded project to produce emu oil will bail them out,” said Anand, a farm owner in Bangalore.

While poultry experts say there is no business case as emu meat is not a widely consumed delicacy, a Nabard official expressed hope that emu oil-producing units, when set up, would create a steady demand for these birds. But, he was not sure if even that would suffice, given the disproportionate breeding that had taken place already.