Have Breed­ers Bet on the Wrong Horse?

Prices of horses plunge 40-60% since 2012 on over­sup­ply of foal stock & lower de­mand

The Economic Times - - Front Page - Shailesh.Menon@ times­group.com

Mum­bai: It was a nippy evening at the Pune race course, a day be­fore the an­nual sale of two-year-old colts and fil­lies through auc­tions. Around 300 thor­ough­breds — bear­ing shin­ing coats of all hues and neatly-combed bushy tails — were pa­raded in small cir­cles for in­spec­tion by visi­tors. The han­dlers of these horses — who ac­com­pa­nied breed­ers from stud farms across the coun­try – were vis­i­bly bored and tired. They had been lin­ing up horses be­fore groups of horselovers, nosey blood­stock agents and the pub­lic for three days, but there were hardly any en­quiry from prospec­tive buy­ers. The breed­ers, sit­ting un­der large gar­den um­brel­las on the side­lines, were un­der­stand­ably fid­gety.

To­wards noon on the auc­tion day, sev­eral breed­ers de­cided to with­draw their en­tries from the sale. Their best horses would not even have cov­ered the ‘pro­duc­tion cost’. Rais­ing a horse up to two years of age (the age at which thor­ough­breds start train­ing to run races) costs breed­ers .₹ 7–8 lakh. At this auc­tion, held in mid-Fe­bru­ary this year, the ask­ing rate (in­for­mal ne­go­ti­a­tions prior to bid­ding) for the best horses was .₹ 5-6 lakh.

In­evitably, the auc­tion turned out to be a damp squib. “The auc­tion did not help us much this time,” says Nir­mal Singh, owner of Hazara Stud Farm. “But one can­not blame the auc­tion alone as there is a general lull in the breed­ing in­dus­try. There are no big buy­ers these days and prices have fallen sig­nif­i­cantly over the past two years.”

Prices of horses have de­clined 40-60% since 2012 as the in­dus­try grap­ples with a deadly cock­tail of over­sup­ply of foal stock, and lower de­mand due to eco­nomic slow­down. In their hey­days, breed­ers sold their best horses for .₹ 10-20 lakh.

Sev­eral breed­ers have been forced to shut down farms due to the over­all funk. The in­sen­si­tive ones have left their horses to die. Smaller breed­ers are sell­ing their thor­ough­bred stocks at throw­away prices to schools, mar­riage par­lours, film stu­dios, re­sorts, polo clubs, rid­ing schools, army and state police de­part­ments.

“Num­ber of se­ri­ous breed­ers is com­ing down at an alarm­ing pace. Many of us are car­ry­ing on the trade be­cause we just can’t shut the farm and go. We deal with live an­i­mals here,” says Teg­bir Brar of Dashmesh Stud Farm. “There’s a lot of cost in­volved in breed­ing; salary, for one, is a big drainer. Fod­der cost is also very high these days,” Brar adds.


The cur­rent trou­bles of the breed­ing in­dus­try can be traced to the pe­riod be­tween 2010 and 2013. In­dian breed­ers im­ported over 700 mares dur­ing those years. They aimed to pro­duce “best qual­ity foals” by buy­ing top-notch mares from overseas mar­kets such as the US, the UK and Ire­land, im­preg­nat­ing a few with cham­pion stal­lions and bring­ing them home be­fore foal-birth. In­dian laws al­low breed­ers to im­port horses for breed­ing pur­poses only, and not for rac­ing.

To­wards 2011–12, the foal stock in In­dia shot up to 1,900 a year. The breed­ing in­dus­try was sud­denly faced with a glut of colts and fil­lies in the suc­ces­sive years. In­dian race cour­ses are equipped to house not more than 1,250 ba­bies ev­ery year; any­thing above that means a good num­ber of the new-born foals would re­main un­sold with breed­ers. Today, around 40–50% of the (new) stock is ly­ing un­sold with breed­ers, as per broad es­ti­mates.

“At some level, the fault lies with the in­dus­try it­self. We im­ported a lot of mares be­tween 2010 and 2012 caus­ing a glut,” ad­mits Zavaray Poon­awalla of the Poon­awalla Stud Farms. “We’ve very lim­ited out­lets to sell new brood ev­ery year. That apart, when the in­dus­try is im­port­ing new mares ev­ery year, the ex­ist­ing new­born mare stock goes un­sold.”

Prob­lem for In­dian breed­ers is the ab­sence of an al­ter­na­tive mar­ket to sell their stock. Tight quar­an­tine re­stric­tions and live­stock ex­port rules make it dif­fi­cult for In­dian breed­ers to ship their horses overseas.

“We’ll be able to in­crease pro­duc­tion only if we have in­ter­na­tional clients buy­ing our horses. And that’s a bit dis­tant due to strin­gent quar­an­tine re­stric­tions and tough gov­ern­ment con­trols,” he adds.

This was not the case un­til mid-2000, when In­dian breed­ers ac­tu­ally ex­ported their horses to “smaller coun­tries” (in terms of rac­ing pop­u­lar­ity) such as Sri Lanka, Mau­ri­tius, Sin­ga­pore, Malaysia, South Korea and a few Arab coun­tries. Stud farm own­ers also had man­aged to send out a few horses to the US, which is rel­a­tively lib­eral, pro­vided the ex­port­ing coun­try meets strict quar­an­tine re­quire­ments. In­dian horses have never man­aged to make in­roads into Europe be­cause horses from “third world coun­tries” are not al­lowed — even for tran­sit pur­poses.

Sadly for In­dian stud farm own­ers, the global equine in­fluenza out­break post 2007 shut al­most all avail­able ‘ex­port cor­ri­dors’. These days In­dia breed­ers do not ex­port horses to even smaller coun­tries. One of the rea­sons for this be­ing tighter ex­port con­trols im­posed by An­i­mal Hus­bandry Depart­ment (AHB) in the af­ter­math of horse-re­lated dis­eases like equine in­fluenza and con­ta­gious equine metri­tis (a treat­able vene­real dis­ease).

“Breed­ing is not prof­itable at all; I am a breeder be­cause I am pas­sion­ate about horses and rac­ing,” says Jay­dev Modi, chair­man of Delta Corp and owner of Quasar, a cham­pion horse which has won over .₹ 6 crore in prize money and is now used for breed­ing pur­poses. “Con­sider your­self lucky if you get a horse like Quasar out of 50 horses you own. Breed­ing a cham­pion horse is much like win­ning a jack­pot in the races,” he says re­signedly.

Ac­cord­ing to Poon­awalla, the in­dus­try has no buy­ers now. “From the looks of it, even 2016 is go­ing to be a bad year in terms of prices.”


In­dian breed­ers (many of whom are own­ers too) make money by sell­ing horses or by win­ning stakes in top races. The third rev­enue stream of of­fer­ing “stal­lion ser­vices” — un­der which stud farm own­ers with ac­com­plished stal­lions pro­vide mat­ing/cov­er­ing ser­vices for a fee — is not pop­u­lar in In­dia as breed­ers pre­fer to im­port im­preg­nated mares (cov­ered by top global stal­lions) from the west. When horse prices plum­met, breed­ers try to race as many horses as they could to win big races. Horses like ‘In the Spot­light’ (which has won 8 In­dian clas­sics and stakes worth .₹ 5.2 crore), South­ern Em­pire (prize money of .₹ 2.6 crore) and Bour­bon King (.`2.3 crore) have done ex­cep­tion­ally well bring­ing home the bucks.

Horses (both colts and fil­lies) start par­tic­i­pat­ing in tro­phy races six-eight months into their train­ing. By the time they turn Num­ber of se­ri­ous breed­ers is com­ing down at an alarm­ing pace. Many of us are car­ry­ing on the trade be­cause we just can’t shut farm and go

four, they are ready to par­tic­i­pate in ‘Clas­sics’ — races with higher stakes. Some­times, breed­ers neuter colts (male horses) to im­prove on-track per­for­mance. Such colts are called geld­ings. Both colts and fil­lies (fe­male horses) run the same races. An ac­com­plished filly is re­tired af­ter two years of top-level rac­ing and is kept in the farm as a brood­mare. The sole pur­pose of a brood­mare is to breed good horses.

“Out of the 10 mares in your farm, 6-7 man­age to pro­duce foals. Not all foals are fit to race. Only 4-5 can be trained to race. The onus to do well and earn some money for farm falls on these race-wor­thy horses,” ex­plains equine ex­pert Anil Mukhi, who runs the Gal­axy Blood­stock.

Mukhi says the breed­ing model in In­dia is poor. Breed­ers here keep both mares and stal­lions. In overseas mar­kets, breed­ers keep only mares; when they want to breed, they send them to stal­lion sta­tions which of­fer mat­ing ser­vices. This re­sults in a bet­ter foal crop.”

In­fe­rior qual­ity, per­haps, is the rea­son why In­dian thor­ough­breds are not in­vited to par­tic­i­pate in in­ter­na­tional races. But big breed­ers like Poon­awalla and Far­rokh Wa­dia of Yer­awada Stud Farm dis­agree. They cite the suc­cesses of horses like Mys­ti­cal (win­ner of 4 In­dian clas­sics and two in­ter­na­tional races), As­ton­ish (which won two races in Hong Kong), Adler (won a race in USA) and Sad­dle Up (won races in Malaysia) to drive home their point.

Ac­cord­ing to Poon­awalla, In­dian horses are just 5 sec­onds slower than the best of global thor­ough­breds. “Our horses can go abroad and be bought by in­ter­na­tional buy­ers,” he says. Wa­dia says In­dian breed­ers have shown they can ex­port good qual­ity horses. “Ef­forts are on to make horse ex­ports a pos­si­bil­ity. We’re talk­ing to con­cerned au­thor­i­ties in Europe about our horses. An in­ter­na­tional ex­pert com­mit­tee is help­ing us to es­tab­lish ex­port chan­nel with Europe,” he clar­i­fies.

The Stud Book Au­thor­ity of In­dia (SBAI), which keeps a record of all mat- ters con­cern­ing reg­is­tra­tion of breed­ing es­tab­lish­ment and thor­ough­breds, is help­ing breed­ers put forth their case. “We en­sure in­tegrity of In­dian thor­ough­breds,” says Satish Iyer, regis­trar at SBAI.

Apart from un­ty­ing knotty ex­port-re­lated is­sues, breed­ers and horse-own­ers are also li­ais­ing with gov­ern­ment and the bu­reau­cracy to gain some respite on the taxes front. Even though horse breed­ing comes un­der the live­stock and an­i­mal hus­bandry min­istry, it does not get the sops and tax-breaks en­joyed by cat­tle grow­ers. Apart from in­come tax, breed­ers/ horse-own­ers are re­quired to pay ser­vice tax, sales tax (in some states) and even oc­troi charges while trans­port­ing horses from one race cir­cuit to an­other.

Be­sides this, prize money for win­ning horses pales in com­par­i­son with other coun­tries. As per In­ter­na­tional Fed­er­a­tion of Horserac­ing Au­thor­i­ties data, av­er­age prize money per race in In­dia is about Euros 6,284 (.`5.15 lakhs) com­pared with euros 1,34,201 (.`1.1 crore) in Hong Kong and euros 1,07,915 (.`88.4 lakhs) in UAE. In­dian turf clubs are not able to raise prize money as bet­ting turnover (a sig­nif­i­cant por­tion of which goes to the turf club) has slid sig­nif­i­cantly over the past two years.

Vivek Jain of the Royal West­ern In­dia Turf Club says clubs are not in a po­si­tion to raise in­crease money sig­nif­i­cantly. “Even clubs have their con­straints. Also, an in­crease in prize money will not alone solve the prob­lem of breed­ers. Their prob­lem has more to do with the general lull in the econ­omy. They’re not find­ing enough buy­ers for their stock,” says Jain.

Ef­forts to re­vive the Madras Turf Club and Royal Cal­cutta Turf Club and grand plans to open a new club in Pun­jab of­fer a glim­mer of hope for the de­pressed in-

TEGBIRBRAR Dashmesh Stud Farm JAYDEVMODI Delta Corp chair­man & owner of Quasar

Breed­ing a cham­pion horse is much like win­ning a jack­pot in the races... Breed­ing is not prof­itable at all dus­try. “We need to have the right in­fra­struc­ture to grow our breed­ing in­dus­try. Newer av­enues have to be built lo­cally to sup­port it,” says Ravi Reddy, pres­i­dent at Nanoli Stud Farm.

Reddy says a small coun­try like Eng­land has nearly 50 race cour­ses while In­dia has just about 10, count­ing even the smaller ones. “Also if you want to breed qual­ity horses, you need to have large tracts of fer­tile farm­land. Re­stric­tion on land use, etc has to be re­duced.” Wa­dia says the gov­ern­ment should be sym­pa­thetic to­wards breed­ing. “This is not only rich man’s ac­tiv­ity; there are sev­eral small farm­ers who raise horses on their farms and this in­dus­try gives di­rect em­ploy­ment to lakhs of peo­ple.”

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