Tuesday, August 21, 2012

Tamil Nadu Emu Scams and its aftermath

In continuation with my last post Shake-up in Tamil Nadu, I am going to analyze some of the outcomes of this episode, created by Susi Emu Farms, and KG Bright, etc.

There are 36,000 farmers, with an average investment of Rs.1,50,000/-, have been duped as per the Government of Tamil Nadu reports. The scam amount is very high, approximately, Rs.600 Crores. The largest ever in India in the history of Agricultural Commercial Sector.

Mr. Guru, MD of Susi Emu Farms
These events are currently happening in Tamil Nadu:

  1. The feed for the birds is supposedly to be provided by the Contracting companies. These    companies has folded up, and No feed is received by Farmer. Farmers, as they used to grow animals in their backyard, couldn't tolerate the hunger of Emu birds. They are spending from their own pocket. The cost of feed is Rs.20/Kg per bird per day, which is unsustainable for a Farmer.
  2. Farmers wanted to cash-out their Emu birds, since they are left with that as their only collateral against this scam. Everyone wants to sell, which we see the prices for Emu Birds are crashing like anything. An Adult Emu bird of 18 months is now available really cheap.
  3. Many farmers unable to find buyers to sell the birds, they are slaughtering the birds for big functions like Marriages, festivals, etc. This trend has already started in Erode, Salem and Tirunelveli Districts. Again, the birds are sold at far cheaper price than imaginable.
  4. Government of Tamil Nadu, has announced that it will feed the birds until they are grown up, and will sell to encash and return the deposits to Farmers. Government is selling Emus..???? Strange..!!!

The repercussions are:

  • Price of Adult Emu Bird will continue to crash.
  •  The price of Emu chicks will be unimaginably cheaper, this season.
  •  Many hatcheries may not be functioning this time, hence, thousands of Eggs are going to be available at a far cheaper price.
  •  Emu Meat will be popularised, as it is going to be available at a cheaper cost to common public.

After reading upto this, are you optimistic or pessimistic about emu farming?


  • If you want to set up the Emu Farm, this is the good period to buy Adult Emu birds with cheapest initial investment. Buy 18-month birds or less, hence, you wouldn't have to face the issue of handling the eggs this season.
  • If you have more funds, you can set-up hatcheries, and buy up Eggs in the market at cheaper price. I forecast the cost of chicks will come down this time heavily, hence, you might have to keep all your hatched emu chicks for future use (Meat Industry). Feeding them for atleast one year is going to cost a good amount of money.
  • Emu Meat is now widely consumed, as it is cheaper than Mutton and Beef. Once people accustomed to it, and taste buds are happy, you have good times ahead. A whole new segment of Meat Market is going to be open.

Time and again, I have strongly advocated about the survival of Emu industry is relied only on Emu Meat and its Oil. This is becoming a reality now.

Be clear that, this year is a shake-up period for Emu Industry. Only strong players will remain hang on to the sport. Weak players will fall off sideways. The Industry will start flourishing from the next season onwards, because of strong demand for Emu Meat and its Oil. Hold tight...!!!

Saturday, August 11, 2012

The shake-up begins in Emu Farming in TN - Part I

The largest contract Emu Farming Company in Tamil Nadu, failed to fulfil its commitments, and flashed in Media for a whopping Rs.250 Crores Scam. Scams in Emu Industry is albeit not new. The extent of the scam and the amount involved is really big this time.

Susi Emu Farm is being accused of duping the Emu Farmers to the tune of Rs.250 Crores, and complaints lodged with Police and District Administration. Unverifiable sources are confirming that 12 persons are already arrested and being interrogated, including the People behind Susi Emu Farms. It seems the assets and bank accounts are frozen, and Passports are impounded for all those involved, until the investigations are completed.

To sum of what kind of scam is inolved in this business, let me briefly explain it to you. 

Susi Emu farms started initially with the intention of selling the emu chicks as the core business.  There was a time that Emu Farm owners find it difficult to market their chicks at a reasonable or profitable basis, because of competition. It was like a dog-eat-dog, and undercutting the prices of the chicks were norms of the trade in 2008/2009. Some of the people involved in Emu Farming, with ingenious plans devised by Auditors, came up with a marketing scheme to quickly and profitably sell all the chicks produced, perhaps in demand.

The ingenious plan works like this: A (Emu) Farmer deposits Rs.15,000/- per pair of 3-month old emu chicks, with a minimum lot of 10 pairs to the Emu Farming Company (EFC), which is Rs.1,50,000/- for 10 pairs. In turn, the EFC constructs the shed with fencing & utensils in Farmer's backyard, and provides 10 pairs of 3-month old emu chicks. The feed is given by the company at no cost. Periodical visit by the EFC to check the health of the birds also done, and Medication is provided if needed to the Birds at no cost to the farmer. Farmer just lends some space, and look after the bird by feeding them. Feeds are indeed provided by the EFC. Farmer gets Rs,600/- per pair as holding charges per month, which works about Rs.6,000/- per 10 pairs every month. The contract is for 5-year period, and the deposit of Rs.1,50,000/- will be refunded at the end of 5 years without interest, and the Birds shall be returned to the EFC. Every year EFC takes back the one-year old birds from the farmer, and replaces it with another batch of 3-month old chicks. The adult birds are taken to the EFC's farm, where they will collect the eggs and produce more emu chicks for sales.

The economics for the EFC is very simple: A chick is produced at Rs.1,600/-, Cost of feed for one year would be around Rs,6,000. The miscellaneous expenses would be Rs.400/-. Hence, the total cost accrued for EFC is Rs.8,000/- per bird, which is Rs.80,000/- per 10-pair lot. EFC collects Rs.1,50,000/- in advance. EFC can pay back Rs.72,000/- per farmer per year, which means, they are returning the deposit amount on a month-by-monty basis with no interest. There is a fibonacci theorem that can tell exactly when this would burst, which would be few years from now.

Farmers are attracted to the scheme, as there is no one providing Rs.72,000/- return on the investment of Rs.1,50,000/-, which is 48% per annum. Farmers have to just feed the Birds and fill the tubs with water.  This is really mouthwatering for the farmers.

Factually, the rate of return is huge, except someone gambles, no other business is easy to get this much of returns. EFC's were thriving on the deposit amount, as they were able to give monthly pay-outs regularly to everyone, which begets more farmers queueing up with hard-cash in hand. The number started growing rapidly. Susi Emu Farm has to procure tens of thousands of emu chicks every year from Andhra and Maharashtra to cater to the needs of Tamil Nadu.

The nature of the scheme has such a deep pocket, the burst wouldn't have come so soon. An Agricultural fortnightly magazine has organized a Farmers Congregation to discuss about "Contract Farming - Good or Bad". The main topic was Emu Farming in that congregation. There were debates, Questions & Answers with Agri-Veterinary officials, etc. There was a strong message as a outcome of the congregation that current method of Contract Farming is evil, and farmers who have invested in it should be cautious, and new investiments are strongly discouraged.

As an outcome of the above congregation, happened to be organized in the same town as the HQ of Susi Emu Farms located, Farmers started flogging to the office of Susi Emu Farms asking for the refund of the Money. Offices were closed and people behind have disappeared.

It has been estimated that there are 12,500 such farmers were affected by this, which works out to be of Rs.250 Crores (Rs.2 Lakh average per farmer).

But there is a good side of the story, which in turn is going to help this industry to grow. I will continue it in the next part.

Wednesday, August 1, 2012

The recent spate of scam claims in Tamil Nadu

There are recent newspaper reports stating that one company from Gopichettipalayam has duped hundreds of farmers with Rs. 14 Crores. People behind the company has disappeared, and Police is investigating the case now.

The reports are attached here (thanks to Junior Vikatan and Pasumai Vikatan Magazines):

There was another report, in a leading Agricultural Magazine, Pasumai Vikatan, which is as follows:

The advertisements, which caused many people to flock into these bogus farms, are interestingly offering exhorbitant incomes. The advertisements (thanks to Daily Thanthi) listed below are all found in one Leading Tamil Daily, Daily Thanthi, on the same day, Sunday.

One company offers even Cars and Bikes as a promotional gifts for the customers. People are often get confused that is there such money in this business.

As we have discussed earlier in several blogs, these are just selling dreams, and creating a black hole, where money legally ends at and dried up.

If there are more than 5 companies does that, there will be a crash in the Emu Prices, which will see a big shake-up in the Emu Market. It will take atleast few years to recover. When it recovers, only handful of big companies will remain, and they will be the real winners, and real Emu Farm Companies.

Monday, March 26, 2012

Ponzi Scheme..?? - An article by Economic Times...

There is an article published by Economic Times on Emu... The article could have been deeper, however, this article has raised a concern over whether the Emu Schemes are moving..

The link is below:


(Thanks to Economic Times):

Investment scam: Cases of circular trading of Aussie bird emus rising in Tamil Nadu

Sangeetha Kandavel, ET Bureau Mar 20, 2012, 12.46AM IST
CHENNAI: In Tamil Nadu, a highly literate and industrialised state with a propensity to fall for ponzi schemes, one more investment scam seems to be brewing. This time it centres around the emu, a large, flightless bird native to Australia and reputed to have as many uses as the wonder drug aspirin.
Across the southern state, indications are that there is a steady build-up of what is essentially circular trading of emus, something that is usually a precursor to an eventual collapse. Advertisements on television, Internet and pamphlets are touting the bird as the ultimate in investment.

Among those who fell for the spiel is Arjun, a 30-year-old software engineer from Chennai who bought 10 pairs of chicks investing Rs 2 lakh. He got his money back in two years, but now says there is something fishy about the whole scheme. "If everyone is selling the bird not to the end consumer but to people who are getting into farming, it doesn't sound good," he says.

Investment schemes for emus look remarkably similar to the ponzi rackets that have operated in the past. For an initial investment of, say, Rs 2 lakh for 20 pairs of chicks, an investor is promised total income of Rs 6.5 lakh in five years-essentially a tripleyour-money scheme. All an investor is supposed to do is return the 20 pairs to the company promoting the scheme every year and take a new set.

Emu farming is supposed to have debuted in India in the mid-1990s after emu slaughtering was banned in its home in Australia. Now, those in the business say there are 3,000 farms in the country, largely in Tamil Nadu, Punjab, Maharashtra, Kerala and Gujarat.

It is in the past two years that the hype has grown. Afarm owner near the hill station of Kodaikanal boasted that he has sold over 1.5 lakh emus so far. No order below 25 pairs of chicks is worth his while and payment has to be upfront.

Doubts Over Mkt's Existence

Among those contributing to the buzz is Susi Emu Farms in Perundurai, near Erode, which calls itself one of the largest emu farms in India. Its sales pitch is that "it fulfils dreams of people who are in search of projects providing quick profits on investments in this competitive world".

For Senthil, who relishes quick profits, emus are just what he was looking for. Recently, he paid Rs 1.2 lakh for five pairs of chicks from a farm just outside Chennai. In two years, he believes, each emu will be worth Rs 45,000.

Emus can grow to be as tall as humans and weigh up to 60 kg. Related to ostriches, they can live for 40 years and are fertile for half that period. Those peddling emus say it is a golden goose-its meat, eggs, feathers, toenails, skin and even oil are all valuable.

While software engineers and farmers alike are being lured to emu schemes, they are not asking if there is a real market for emu products. Such concerns have arisen once in a while but formal complaints have not been made. VK Shanmugam, the collector of Erode district, says the emu business is a matter of "serious concern" but since there are no complaints, no action can be taken.
Shanmugam says he is also intrigued by the fact that he doesn't see any of the birds though people seem to be investing in them. "I hear that people are depositing money but are not able to get receipts for that," he says.

The administration recently had a meeting with top police officials about the emu problem. Tamil Nadu has a rich history of ponzi schemes. Among the more notable ones is the collapse in 1998 of the Anubhav group which duped investors who put money in a teak plantation scheme of around Rs 400 crore.

Last year, a PTI report said the Maharashtra government ordered a CID inquiry into a likely Rs 200-crore emu farming scam in Nashik district.

The controversial scheme, run by a private company, involved a promise to triple investment in 45 days. Farm owners in Tamil Nadu estimate the number of emus in the state at around five lakh, or one bird for every 130 people in Tamil Nadu. Sceptics such as Shanmugam, however, don't buy that number.

V Rajapandi, the general secretary of the Tamil Nadu Emu Association, said to be registered under the Societies Act and having 300 members, defends his business.

He says emu farming is a genuine business "if you do it in the right manner." "It has a huge market. Just because a handful of people say so, you cannot say the business is a ponzi scheme," he adds. 

(Thanks to: The Economic Times)

Monday, February 27, 2012

Emu Schemes - Maladies of our time

I am seeing a lot, a lot of lot, advertisements in the Tamil Newspapers, Radio and TV Media, for Emu Farming and its dubious schemes. I am little worried about the stupendous nature of the propaganda, and associated 'freebies'.

I am not sure about other states. People can share them in the comments of this blog.

Only one word, beware...!!!  Be cautious about your hard-earned money on these schemes.

Why I am worried?

1. There is no effective meat market developed yet for export or for local sale and there is no symptoms of it, so far. In my opinion, exporting emu meat is simply not profitable. It has to be sold locally.

2. Unimaginable monthly returns are assured and tempted with Gold Coins. In my opinion, the industry is heading to peak for this year 2012 season (September 2012 to February 2013), and will go down for the next season.

3. Officials from Veterinary Departments, preferred to stay away from saying any comments on this business, since they are not very sure of where it is going. There is no guidance or regulations from the government.

So, whom to beleive in? The game is keep going, and let's see how long will it go.

There are several stories are floating. One thing is certain as the money collected is not purely invested in Emu Farming Business alone. It goes somewhere..!!.

Thursday, September 8, 2011

The Egg Season has begun....!!!

Emu Breeders started laying. I also contacted several other people, and many of them confirmed their Breeders started laying, but not started in full swing.

Please note, when the season actually begins, not all the breeders will lay eggs. One or two pair will start laying eggs initially, and to kick off the momentum it will take atleast 2-3 weeks. Until then, you cannot start your incubator. Because to start an Incubator, you need a reasonable quantity of eggs to sustain the cost of production.

What to do with the eggs until then...?

You can keep it in Fridge at 18 degree celcius, for upto 15 days. Or, you can keep it in a dark, cold place inside a clay pot. When you are taking out the eggs from Fridge storage, keep the egg in open space at room temperature for a minimum of 8 hours for the eggs to stabilize.

The price of the eggs?.....  Good question, wait for atleast next 10 days..!!  This is the Demand and Supply equation.

Wednesday, August 17, 2011

Contract Emu Farming - Some Warnings

Recently some distasteful news in the Media about Emu Business from Maharashtra, which was disheartening. 

There are two sides to a coin. One side is the people who simply ready to be duped with tons of ignorance and Money, and the Other side is the People who design their schemes such that most appealing to a common man to part with his Money and Confidence. This applies to Finance Companies to Forex Companies, and Emu Business is not an exception to this White-Collar Crime.

Before someone new to this industry end-up in a similar scam, there are some valid points to look for before investing in Emu Schemes, whether it is Contract Emu Farming or MLM-type Schemes. We will be seeing them here.

In any Business, there has to be a product. In Emu Business, Meat & Oil are the products (Eggs are only for reproduction and is not a product). These are the two main reasons for which, Emus have to be culled. Culling for reasonable economic values is the essential key to this Business. If there is no culling and no regeneration, the cycle never completes. 

Before you invest and Sign a contract with a Contract Emu Farming Company, please look into the following aspects.

I put them into pointers:
  • In an Emu Contract Farming Business - Check whether they have processing plants to produce Meat and Oil. Emu Processing Unit (EPU), as they are called, are setup to cull birds hygienically, and cut meat as required by Market. If the Emu Contract Farming Company does not have EPU and proper Marketing Arrangements to market the meat, do not invest your money with them.
  •  If the Emu Contract Farming Business offers you more than Rs.350/- per month per bird, double check their past history, and also check whether they already have the EPU. It might be possible that they need more birds for their busy EPU, so they offer higher premium. If not, they are luring you and your money, because it is simply not viable to run at this cost for long-term.  This also applies to giving Gold Coins as an Incentive to join. Simply, doubt them.
  • If the Emu Contract Farming Business is based on the Multi-Level-Marketing mode, never involve into this. You will earn only bad reputation for yourself, because you are false-promising many people into that.  Stay away from these kind of schemes.
With the advent of few big names in the industry doing Emu Contract Farming in large scale has raised concerns for many. Because the amount involved is running into Crores of Rupees. The tipping point for this industry will flower once the Emu Meat is well liked by the end-users. For that to happen, Emu Meat must be freely available on the market first.

Emu business will sustain and grow only when there is a usage, that means, a Market for Meat. This can be achieved only through selling its Meat for consumers and Oil for Pharmaceutical Industries. That day is not too far.