MODEL PROJECT REPORT for Broiler Farming on Contract system

PROJECT REPORT FOR  ESTABLISHMENT OF 9,000 COMMERCIAL  BROILERS PER CYCLE IN DEEP LITTER SYSTEM OF HOUSING (ALL IN ALL OUT SYSTEM )

CHAPTER – I

HIGHLIGHTS OF THE PROJECT REPORT

A: ABOUT THE PROMOTER

Name of the farmer                                        : ..................................

Address                                                           : .....................................

                                                                          .....................................

Contact No.                                                     : .....................................

Date of Birth                                                   : ....................................

Educational Qualification                              : ...................................

Experience                                                      : ..................................

B: PROJECT PROFILE

1. Name of the Establishment                                    : .................... Poultry Farms

2. Project Location                                         : S..............................................

                                                                          ...............................................

 

1. Types of Birds                                            : Poultry (Broiler)

2. Name of Contract Farming Company        : Venkateshwara Hatcharies Limited

3. Unit Size                                                     : 9000 Birds

4. Product                                                       : Birds, Manure etc.

5. Cost of the Project                                      :

6. Bank Loan                                                  :

7. Margin Money                                            :

8. Financial Indicators

                        BCR at 15% DF                      :

                        NPW 15% DF (Rs)                 :

                        IRR (%)                                  :

                        DSCR                                      :

9. Interest Rate                                               : 12

10.Repayment                                                 : 6 years

CHAPTER - II

INTRODUCTION

Poultry farming is an important source of subsidiary income to small / marginal farmers and agricultural laborers. The manure from birds provides a good source of organic matter for improving soil fertility and crop yields. Since agriculture is mostly seasonal, there is possibility of finding employment throughout the year for many persons through poultry farming. With the adequate infrastructural facilities especially for broiler production has become increasingly popular in and around. The present demand in the area is more. It is increasing day by day and present strength of the flock in the area is not in a position to meet the growing demand. Beside the traders come from near by towns / cities at regular intervals to lift the produce. To take care of the health hazards, adequate veterinary aid facilities are available in the nearby town through the State Animal Husbandry Department dispensary.

OBJECTIVE

To meet the growing demand of Broilers, I intended to establish a Broiler farm initially with Broilers which will be reared on deep litter system / cages. All inputs require for rearing of birds are provided by contract farming company. After rearing all birds are marketed to the company on contract basis.

LOCATION

The proposed unit will be located on a piece of land which is almost leveled and is well connected to approach road, Electricity is available near the farm site. A tube well with electric motor pump set is already existing in this land and this water will be used for proposed poultry farm and adequate water of good quality is available in this tube well.

HOUSING

Provision has been made for the construction of a brooder cum grower house measuring at a rate of 1 square feet per bird, Besides it, farm will have a small store room and servants quarter. Construction of house will be pucka with asbestos roofing. The laying of pipeline for supply of adequate water supply is also be done.

EQUIPMENT

Standard equipments are available from various equipment manufacturers located in the nearby cities.

CHICKS

One day old commercial hybrid chicks are available from the hatcheries. In order to cover transportation, hatchery is supplying 3% extra chicks. Chicks will be vaccinated against Rd and Marek’s at source. Chicks will be purchased in lots at regular intervals.

FEED

Company will provide feeds require to birds on contract basis.

MEDICINE AND VETERINARY AID

The person who will be looking after the day-to-day management of the farm is conversant with the use of medicines. In case of need, the sick birds will be taken to the disease investigation laboratory located in town. For various operations like vaccination, medication etc. a poultry specialist visits the area at regular intervals.

CHAPTER – III

MARKET POTENTIAL

The domestic broiler meat demand is growing at the rate of 15 – 18% on back of factors like rising purchasing power, changing food habits and increasing urbanization. The growth is supported by implementation of large scale contract poultry farming by integrated players. Overall domestic poultry market size is estimated at Rs. 47000 crore with broiler meat. Globally India ranks fourth in Broiler meat production with annual production of 2.9 million ton (MT).

Contract farming is billed to be veritable instrument to address many of the traditional ills affecting the agriculture sector and the farmers. Under the contract growing agreement birds are marketed to the company on the basis of growing charges. Thus, the farmer assumes the production related risks and the price risk is transferred to the company. In India contract farming has considerable potential where small marginal farmers can no longer be competitive without access to modern technologies and support. Contract farming can fill this gap by providing the farmers with quality inputs, technical guidance, management skills, credit as well as knowledge of new improved technology. Pricing arrangement can significantly reduce the risk and uncertainty of market place.

CHAPTER - IV

SWOT ANALYSIS

STRENGTHS

Poultry has the potential to meet the protein requirements of a nation where malnutrition is rampant, since both eggs/broilers are a good source of protein.

Helps to augment the income of the rural masses. Thus improve the socio-economic status of rural population.

Poultry is one of the most efficient converters of plant products / waste in to edible food that can in some measure tackle the problem of malnutrition especially in a country like India.

Unlike other meat (beef, pork) which have religious taboos, chicken is widely accepted in India and is cheaper than goat / sheep meat.

Poultry litter has high manure value and can be used in agriculture activities.

It has tremendous potential to create non-farm employment and check migration from rural to urban areas.

Generates relatively quick returns with low investment requirements.

OPPORTUNITIES

Present per capita meat consumption in India is increasing day by day, therefore there is large scope for poultry farming.

Besides this, India has also great potential market.

The increasing awareness of the need for the balanced nutrition has led to changes in the eating habots.

WEAKNESS

Poultry farming is labor intensive.

A peculiar feature of the poultry industry is that it is highly fragmented.

Low growing charges coupled with the cost of making investments in the infrastructure such as sheds, feeders, breeders, waterers, heating and cooling systems result in a low income for farmers.

The stringent mortality norms (only a 5% mortality is permitted in most integration contracts, else the farmer gets penalized and is offered a lower rate) leaves the farmers in a vulnerable position and with no avenue to voice their grievances.

THREATS

Natural calamities.

If adequate death precautions are not taken infectious / contagious diseases can be spread. The recent avian flu has spread a wave of panic across the globe. The other aspects that have dragged the poultry industry are the recent SARS and Ebola.

Shortage in major feed ingredient i.e., maize, which constitutes more than 50% of feed rations. Therefore even a small increase in costs can wipeout the profits.

ANNEXURE - I

ECONOMICS IN BROILER FARMING - TECHNO ECONOMIC NORMS

1	No. of birds per batch	9000
2	Rearing period (weeks)	6
3	No. of batches per year	6
4	No. of batches sold per year	6
5	Space requirement per bird (sft)	1
6	Cost of construction of shed (Rs./sft)	150
7	Store Room (sft)	200
8	Cost of construction of Store room	Existing
9	Labor quarter (sft)	150
10	Cost of construction of Labor quarters	Existing
11	Cost of electrification (as % of civil costa)	4
12	Equipment cost (Rs/bird)	24
13	Mortality in 6 weeks (%)	4
14	Cost of Day Old Chicks (Rs/chick)	Contract Company supply
15	Supply for free chicks (%)	4
16	Feed requirement (kg/bird)	3.2
17	Feed cost (Rs/kg)	Contract Company supply
18	Expenditure on labor (Rs/batch i.e. 2 months)	18000
19	Cost of medicines, vaccine etc	Contract Company supply
20	Cost of litter (Rs/bird)	2
21	Average body weight of birds (kg/bird)	2.2
22	Sale price of Broilers (Rs./kg body weight) (Contract Company)	4.5
23	Sale price of bird (Rs/bird)  (Contract Company)	9.45
24	Income from Manure (Rs/bird)	1
25	No. of gunny bags (per ton of feed)	20
26	Income from gunny bags (Rs./bag)	10
27	Depreciation on sheds (%)	5
28	Depreciation on equipment (%)	10
29	Margin Money (%)	45
30	Interest rate (%)	14
31	Repayment period (years)	6
32	Grace period years (years)	0.5
33	Construction period (months)	3
34	Rest period for broiler sheds (days)	10 - 15

ANNEXURE - II

ECONOMICS OF BROILER FARMING – INVESTMENT COST

S.No.	Particulars	Specifications	Units	Unit cost Rs	Total cost Rs
1	Sheds and other structures
	a) Broiler Shed	1sft per bird	9000 sft	150	1350000
	b) Store Room		200 sft		Existing
	c) Labor quarter		150 sft		Existing
2	Water supply system
	a) Digging of Tubewell				Existing
	b) Water tanks	2 No.s	1000 ltrs each	6000 each	12000
	c) Electric motor pump set				Existing
	d) Electrical installations/ equipment		4% of civil costs		54000
3	Equipments
	a) Feeders and Waterers	Cost per bird	9000	22	198000
	b) Foggers		150	38	5700
	c) Sprinklers		30	75	2250
	d) Brooders		10	1000	10000
4	Capitalization of recurring expenses for one batch
	a) Chick cost				Contract company
	b) Feed cost				Contract company
	c) Medicine, vaccine etc				Contract company
	d) Litter		5 Tonns	2200	11000
	e) Labor cost per batch		9000 /month	2	18000
	f) Power charges per batch				15000
5	Total Financial Outlay (TFO)			1676000	1680000
6	Margin Money @ 45% of TFO				776000
7	Bank loan @ 55% of TFO				900000

ANNEXURE - III

ECONOMICS OF BROILER FARMING – FLOCK PROJECTION CHART

Year	No. of batches introduced	No. of batches sold
I	6	6
II	6	6
III	6	6
IV	6	6
V	6	6
VI	6	6

ANNEXURE - IV

ECONOMICS OF BROILER FARMING – CASH FLOW ANALYSIS

S.No.	Particulars	I Year	II to V Years	VI year
I	COSTS
A	Capital Cost	1632000	0	0
B	Recurring costs
a	Cost of chicks	0	0	0
b	Cost of Feed	0	0	0
c	Misc expenses	0	0	0
d	Litter	66000	66000	66000
e	Labor charges	108000	108000	108000
f	Power bill	90000	90000	90000
II	BENEFITS
A	Sale of birds (Rs 4.5 /kg)	507600	507600	507600
B	Sale of Manure	54000	54000	54000
C	Sale of gunny bags	34500	34500	34500
D	Depreciation value of
i	Sheds			405000
ii	Equipment incl water pump			158400
E	TOTAL Benefits	596000	596000	1159000
	NET Benefits	-1300000	332000	332000
	NPV
	a) Cost
	b) Benefits
	c) NPW
	d) BCR
	e) IRR

ANNEXURE - V

ECONOMICS OF BROILER FARMING – REPAYMENT SCHEDULE

Year	Loan outstanding	Gross surplus	Interest @14%	Principal	Tot Repayment	Surplus
I	900000	332000	126000	100000	226000	106000
II	800000	332000	112000	120000	232000	100000
III	680000	332000	95200	139800	235000	97000
IV	541000	332000	75800	159200	235000	97000
V	382000	332000	33500	200000	233500	98500
VI	182000	332000	25500	182000	207500	124500
	TOTAL		468000	901000	1369000	623000