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Model Bankable Projects

   
   
 

Animal Husbandry

 
Poultry Layer Farming
 
 

1. Introduction
Poultry egg and meat are important sources of high quality proteins, minerals and vitamins to balance the human diet. Specially developed breeds of egg type chicken are now available with traits of quick growth and high feed conversion efficiency. Depending on the farm-size, layer (for eggs) farming can be main source of family income or can provide income and gainful employment to farmers throughout the year. Poultry manure has high fertilizer value and can be used for increasing yield of all crops

2. Scope for Layer farming and its National Importance
Poultry industry which provides cheap source of animal protein has taken a quantum leap in the last three decades evolving from a near backyard practice to a venture of industrial promotion. Poultry is one of the fastest growing segments of the agricultural sector in India today. While the production of agricultural crops has been rising at a rate of 1.5 to 2 percent per annum that of eggs has been rising at a rate of 8 percent per annum. India is on the world map as one of the top five egg producing countries with 55.6 billion eggs produced during 2008 (FAO).

The poultry sector in India has undergone a paradigm shift in structure and operation. This transformation has involved sizable investments in breeding, hatching, rearing and processing. Farmers in India have moved from rearing non-descript birds to rearing hybrids which ensures faster growth, good liveability, excellent feed conversion and high profits to the rearers. High quality chicks, equipment, vaccines and medicines are available. Technically and professionally competent guidance is available to the farmers. The management practices have improved and disease and mortality incidences are reduced to a great extent. The industry has grown largely due to the initiative of private enterprise, minimal government intervention, considerable indigenous poultry genetic capabilities and adequate support from the complementary veterinary health, poultry feed, poultry equipment and poultry processing sectors. The industry has created direct and indirect employment for 3 million people.

3. Financial assistance available from banks/NABARD
3.1 Loan from banks with refinance facility from NABARD is available for starting poultry farming.

3.2 For poultry farming schemes with very large outlays, detailed project reports will have to be prepared. Banks provide financial assistance for the following purposes :
a. For construction of brooder/grower and layer sheds, feed store, quarters etc.
b. For purchase of poultry equipment such as feeders, waterers, brooders etc.
c. For creating infrastructure items for supply of electricity, feed, water etc.
d. For purchase of day old chicks or ready to lay pullets.
e. For meeting working capital requirement in respect of feed, medicines and veterinary aid etc. for the first 5 to 6 months (i.e. till the stage of income generation).
The Cost of land is not considered for loan.

4. Scheme formulation for bank loan
4.1 A scheme can be prepared by the beneficiary after consulting local technical persons of State Animal Husbandry / Veterinary department, Poultry Corporation or private commercial hatcheries. If possible, they should also visit the progressive layer farms in the area and discuss the profitability of farming. A good practical training and experience on a layer farm will be highly desirable, before starting a farm. Regular and constant demand for eggs and nearness of the farm to the market should be ensured.

4.2 The scheme should include information on land, water and electricity facility, marketing aspects, training facilities and experience of entrepreneurs and the type of assistance available from State government, poultry corporation, local hatcheries. It should also include data on proposed capacity of the farm, total cost of the project, margin money to be provided by the beneficiary, requirement of bank loan, estimated annual expenditure, income and profit and the period for repayment of loan and interest. A format developed for project report preparation for a commercial layer farm is given in Annexure -I.

5. Appraisal of project
After the scheme is submitted to the bank it is examined for technical feasibility and economic viability.
A. Technical Feasibility : This would briefly include :-
a. Suitability of climate and potentiality of the area
b. Availability of inputs such as chicks, feed, medicines etc.
c. Technical norms
d. Infrastructure available for veterinary aid, marketing, training and experience of the beneficiary.

B. Financial Viability : This would briefly include :-
a. Unit cost and loan requirement.
b. Input cost for chicks, feed, veterinary aid, labour and other overheads.
c. Output cost i.e. sale of eggs, culled birds, for meat, manure, empty gunny bags etc.
d. Income-expenditure statement and annual gross surplus.
e. Cash flow analysis.
f. Repayment schedule i.e. repayment of principal loan amount and interest.
Other documents such as loan application form, security aspects, margin money requirement etc. are also examined. A field visit to scheme area is undertaken for conducting techno economic feasibility study for appraisal of the scheme.

6. Sanction of Bank loan and its disbursement
After ensuring technical feasibility and financial viability, the scheme is sanctioned by the bank. The loan is disbursed in kind in 2 or 3 stages against the creation of specific assets such as construction of sheds, purchase of equipment and machinery, recurring cost during growing period on purchase of chicks, feed, medicines and vaccines, electricity and water, labour expenses etc. for first cycle. Constant follow up and supervision of the scheme is done by the bank.

7. Lending terms - general
7.1 Financial Outlay
Financial outlay of the project depends on the local conditions, unit size and the components included in the project. Prevailing market prices may be considered to arrive at the outlay.

7.2 Margin Money:
Margin depends on the category of the borrowers and may range from 5 to 25% of the total outlay.

7.3 Interest Rate for ultimate borrower :
Banks are free to decide the rates of interest within the overall guidelines. However, for working out the financial viability and bankability of the model projects we have assumed the rate of interest as 12 % p.a.

7.4 Security
Security will be as per NABARD/RBI guidelines issued from time to time.

7.5 Repayment period of loan
Repayment period depends upon the gross surplus from the project. The loan will be repaid in suitable monthly/quarterly instalments usually within a period of seven to nine years with first year as grace period.

7.6 Insurance
The birds and other assets (poultry sheds, equipments) may be insured. Wherever necessary, risk/mortality fund may be considered in lieu of insurance.
A model project with 2000 layers ( 1:2 cage system)  is given as Annexure II. This is indicative and the applicable input and output costs as also the parameters observed at the field level may be incorporated.
Guidelines for integrated biosecurity in poultry production are given in Annexure III.

 
Annexure I

Format for preparation of Project report
Poultry -  Commercial Layer Farm

 

1. GENERAL
i)
Nature and objectives of the proposed scheme
ii) Details of proposed investments
iii) Specification of the project area
iv) Name of the financing bank branch
v) Status of beneficiary: (Individual)/Partnership/Company/Corporation/Co-operative Society/Others
vi) Details of borrowers profile

(a)
Capability
(b) Experience
(c) Financial soundness
(d) Technical/Other special Qualifications
(e) Technical/Managerial Staff and adequacy thereof

2. TECHNICAL ASPECTS
a) Location, Land and land Development
i)
Location details of the project
ii) Total Area of land and it's cost
iii) Site map
iv) Particulars of land development, fencing, gates etc.

b) Civil Structures
Detailed cost estimates along with measurements of various civil structures
- Poultry Sheds
- Store room
- Egg room
- Office room
- Quarters for staff
- Others

c) Equipment/Plant and machinery
i)
Brooders
ii) Feeders
iii) Waterers
iv) Cages
v) Generator
vi) Feed grinder and mixer
vii) Debeaker
viii) Vaccinator
ix) Fridge/Deep Freezer
x) Truck/van/Jeep(Price quotations for the above equipments)

d) Housing
i)
Type of housing Deep Litter/Cage/Slat
ii) Area required (sft./bird)

e) Birds
i)
Proposed strain
ii) No. of birds to be purchased
iii) Age of the birds
iv) Source of birds
v) Cost of birds (Rs. per bird)
vi) Vaccination of purchased birds
vii) Proposed programme of replacement
f) Production parameters
i) Number of eggs produced
ii) Feed efficiency (kg of feed/No. of eggs produced)
iii) Mortality (%)

g) Flock Projection Chart

h) Feeding
i)
Source of availability Purchased or own feed manufacturing
ii) If purchased
a) Place of purchase
b) Brand
c) Cost (Rs./kg)
- Chick mash
- Grower mash
- Layer mash
iii) If manufactured on farm
a) Capacity of feed grinder and mixer
b) Source of raw materials
c) Feed formula
d) Cost of production(Rs./kg)
- Chick mash
- Growing mash
- Layer mash
iv) Requirement (kg per bird)
- Chick mash
- Grower mash
- Layer mash
i) Veterinary aid
i) Source
ii) Location
iii) Distance (km.)
iv) Availability of labour and other staff
v) Type of facilities available
vi) If own arrangements are made
a) Employed a veterinary doctor/ stock man / consultant
b) Periodicity of visit
c) Amount paid (Rs.)
vii) Expenditure per bird (Rs.)
j) Electricity
i) source SEB/ Other
ii) Approval from electricity board
iii) Connected load
iv) Problems of power failure
v) Arrangements for generator

k) Water
i)
Source
ii) Quality of water
iii) Availability of sufficient quantity for drinking and cleaning
iv) If investment has to be made type of structure, design and cost

l) Marketing of eggs

i) Source of sale
ii)
Place of disposal
iii)
Distance (km.)
iv)
Basis of payment (number or weight)
v)
Price realised - (Rs./egg)
vi)
Periodicity of payment

m) Marketing of other products
i)
cull birds Rs./bird
ii) Manure - Qty./bird, price per unit (Rs./Q)
iii) Empty gunny bags Number and cost/bag

n) Beneficiary's experience

o) Comments on technical feasibility

p) Government restrictions if any

 

3. FINANCIAL ASPECTS

i) Project Cost

 

Sr. No.

Item

Physical Unit and Specification

Cost  (Rs.)

 

Capital Costs

 

 

 

 

 

 

 

 

 

 

 

Total Capital Costs(A)

 

 

 

Recurring Costs

 

 

 

 

 

 

 

 

 

 

 

Total Recurring Costs (B)

 

 

 

Total Project Cost (A+B)

 

 

 

ii) Down payment/margin/subsidy (Indicate source & extent of subsidy)
iii) Financial Particulars
a) Internal Rate of Return (IRR):
b) Benefit Cost Ratio (BCR) :
c) Net Present Worth (NPW) :
iv) Financial position of the borrowers (to be furnished in case of corporate bodies/partnership firms)
a) Profitability ratio
i) Gross Profit ratio
ii) Net Profit ratio
b) Debt equity ratio
c) Whether Income tax& other tax obligations are paid upto date
d) Whether audit is upto date (enclose copies of audited financial statements for the last three years)
v) Lending Terms
i) Rate of interest
ii) Grace period
iii) Repayment period
iv) Nature of Security
v) Availability of Government guarantee wherever necessary

 

4. INFRASTRUCTURAL FACILITIES
a)
Availability of technical staff with bank/implementing authority for monitoring
b) Details of
i) technical guidance
ii) training facilities
iii) Government support/extension support
c) Tie-up arrangements with marketing agencies for loan recovery
d) Insurance
i) Type of policy
ii) Periodicity
iii) Rate of premium

 

Annexure II

ECONOMICS OF A COMMERCIAL LAYER POULTRY FARM OF 2000 BIRDS

 

A. Project Cost

 

I. Capital Cost

Amount Rs.

Construction of brooder cum grower house

120000

Construction of layer house

204000

Purchase of brooder cum grower equipment

20400

Purchase of layer equipment

100000

Total (I)

444400

II. Recurring Expenditure

 

Cost of day old chicks

37800

Cost of feed upto 25% laying

285600

Cost of medicines & miscellaneous expenses upto laying

20400

Insurance of sheds and equipment

2240

Insurance of birds

9450

Total (II)

355490

Grand Total (I+II)

799890

or say

800000

Margin (25%)

200000

Bank Loan

600000

 

B. Techno economic parameters

 

Number of birds

2000

Number of batches

2

Batch strength

1000

Birds purchased per batch

1050

Birds considered for brooding cum growing

1020

Birds considered for laying

1000

Birds considered for culling

900

Floor space per bird in brooder cum grower house (deep litter system) - sft per bird

1

Floor space per bird in layer shed (cage system) - sft per bird

0.85

Cost of construction of shed (Rs. per sft)

120

Cost of brooder cum grower equipment (Rs. per bird)

20

Cost of cages for layers (Rs. per bird)

50

Cost of day old chick (Rs. per bird)

18

Feed requirement upto laying, i.e. 20 weeks (kg per bird)

8.5

Feed quantity capitalized (kg per bird) for first two batches- 8.5 kg upto laying and 1.5 kg for initial laying period

10

Feed requirement during laying (kg per bird) - 52 weeks laying

40

Cost of chick and grower mash (average price Rs. per kg)

14

Cost of layer mash (Rs.)

12

Medicines, vaccines, labour and misc. charges (upto laying) - 20 weeks (Rs.)

10

Medicines, vaccines, labour and misc. charges (laying) - 52 weeks (Rs.)

25

Insurance per bird (Rs. per bird)

4.50

Insurance of sheds and equipment( Rs. per thousand)

5.05

Egg production per bird (No.)

300

Sale price per egg (Rs.)

2.35

Sale price of culled bird (Rs.)

60

Manure production (chicks) - kg per bird per week

0.2

Manure production (layers) - kg per bird per week

0.5

Sale price of manure (Rs. per ton)

300

Sale price of gunny bags (Rs. per bag)

10

Margin (%)

25

Interest on bank loan (% per annum)

12

 

Flock chart

 

Years

1

2

3

4

5

6

7

8

9

No. of batches purchased

2

2

2

2

2

1

2

2

2

No. of brooder cum grower weeks

40

40

34

34

34

38

36

34

34

No. of layer weeks

38

92

98

92

92

92

96

94

92

No. of batches culled

 

2

2

1

2

2

2

1

2

 

C. Economics

 

Item / Year

1

2

3

4

5

6

7

8

9

Income

 

 

 

 

 

 

 

 

 

Sale of eggs

515192

1247308

1328654

1247308

1247308

1247308

1301538

1274423

1247308

Sale of culls

0

108000

108000

54000

108000

108000

108000

54000

108000

Sale of gunny bags

6210

11750

12020

11400

11400

11630

11930

11610

11400

Sale of manure

8148

16248

16781

15881

15881

16126

16603

16181

15881

Total

529550

1383306

1465455

1328589

1382589

1383064

1438071

1356214

1382589

Expenditure

 

 

 

 

 

 

 

 

 

Cost of day old chicks

37800

37800

37800

37800

37800

18900

37800

37800

37800

Cost of feed upto laying

242760

242760

206346

206346

206346

230622

218484

206346

206346

Cost of feed during laying

350769

849231

904615

849231

849231

849231

886154

867692

849231

Cost of medicines, labour & misc. expenses upto laying

20400

20400

17340

17340

17340

19380

18360

17340

17340

Cost of medicines, labour & misc. expenses during laying

18269

44231

47115

44231

44231

44231

46154

45192

44231

Insurance of sheds & equipment

2244

2244

2244

2244

2244

2244

2244

2244

2244

Insurance of birds

9450

9450

9450

9450

9450

4725

9450

9450

9450

Total

681692

1206116

1224910

1166642

1166642

1169333

1218646

1186064

1166642

 

D. Calculation of NPV, BCR & IRR

 

Years

1

2

3

4

5

6

7

8

9

Capital Cost

444400

 

 

 

 

 

 

 

 

Recurring Expenses

681692

1206116

1224910

1166642

1166642

1169333

1218646

1186064

1166642

Total Costs

1126092

1206116

1224910

1166642

1166642

1169333

1218646

1186064

1166642

Income

529550

1383306

1465455

1328589

1382589

1383064

1438071

1356214

1382589

Residual value

 

 

 

 

 

 

 

 

178200

Total Benefit

529550

1383306

1465455

1328589

1382589

1383064

1438071

1356214

1560789

Net Benefit

-596542

177190

240545

161947

215947

213731

219425

170150

394147

Disc cost @ 15%

5626692

 

 

 

 

 

 

 

 

Disc benefit @ 15%

5942616

 

 

 

 

 

 

 

 

NPV

315924

 

 

 

 

 

 

 

 

BCR

1.06

 

 

 

 

 

 

 

 

IRR

30.63%

 

 

 

 

 

 

 

 

 

E. Repayment Schedule

 

Year

Loan

Gross surplus

Interest

Principal

Total repayment

Net surplus

1

600000

203348

72000

 

72000

131348

2

600000

177190

72000

34300

106300

70890

3

565700

240545

67884

76416

144300

96245

4

489284

161947

58714

38486

97200

64747

5

450798

215947

54096

75504

129600

86347

6

375294

213731

45035

83165

128200

85531

7

292129

219425

35055

96645

131700

87725

8

195484

170150

23458

78642

102100

68050

9

116842

215947

14021

116842

130863

85084

 
Annexure III

Guidelines for integrated biosecurity in poultry production

 

A set of recommended biosecurity practices to be adopted by the poultry farmers for minimising the disease occurrence is given here under in brief.

1. Locational biosecurity :
* Farm should be located
- At an elevated and well ventilated site
- Away from any existing farms or complexes
- Away from water ways/water pools/lakes/tanks
- Away from any nearby village poultry
* Broiler and layer units should not be established in close vicinity
* Farms having more than 50000 birds (Layers) should preferably have separate facilities for
brooding/growing.
* The new poultry farms may be one kilometer away from the existing farms or complexes.

2. Structural biosecurity:

  • Construct separate sheds for brooding/growing/laying operations with East-West orientation.
  • A minimum distance of 150 ft. between brooding/growing sector and layer sector should be maintained. The distance between the sheds within the sector should be at least 50 ft.
  • In case of farms wherein brooding/growing operations are carried out along with layer operations 1:3 system of rearing may be adopted, while in case of units where brooding/growing operations are carried out at separate places, 1:1:4 or 1:1:5 system of rearing may be adopted.
  • Multi-storeyed poultry sheds are not desirable.
  • Individual farms should be provided fencing with wheel dip at main gate. Provide foot dips at every doorstep.
  • The maximum width of the sheds in the case of deep litter system should not exceed 30 feet and the shed should be 2 feet above ground level with pucca floor.
  • A minimum over hang of 3 feet must be provided.
  • The maximum width of the sheds should be 33.5 feet in case of layer houses under cage system.
  • In case of cage system, rows as well as tiers should not be more than three.
  • The height of the platform from the ground should not be less than 6 feet in case of cage system.
  • For ideal farming, 3 birds per cage with adequate water and feeding facilities should be ensured
  • Provide closed disposal pit or incinerator at least 500 feet away from the active operational area.
  • A store house for proper storage of litter material should be provided to avoid contamination.
  • Provide proper area for used litter disposal away from the active operational area.
  • Feed store/mill should be 150 feet away from the sheds and preferably near the gate.
  • Office and egg store should be away from active operational area and preferably at the main gate.
  • All the sheds and other structures should have rat proof arrangements.

3. Operational biosecurity :

  • Procure the day old chicks, which are free from diseases from reputed hatcheries
  • It is advisable to have cage system of rearing in place of deep litter system of rearing.
  • As far as possible automated equipment should be considered to minimize the manual handling of feeds and water.
  • Testing feed ingredients/feeds must be arranged to ensure that they are free from microbial agents or toxins at periodic intervals.
  • Storage facilities for feed ingredients/feeds must be managed in an hygienic manner.
  • Ensure the feed manufacturing area free from dust, cobwebs and should be equipped with appropriate screens to protect from fly problem.
  • It is advisable to feed the birds with pellets for improved biosecurity.
  • Sheds having infected flocks should be served with feed at the end of a delivery day.
  • Always ensure the supply of clean and potable water. If necessary use appropriate sanitizers.
  • Periodic inspection of wells, piping and tanks to ensure that water supplied is clean.
  • An area specific vaccination schedule as recommended by hatchery doctor must be practiced with utmost care.
  • Rodent control programme, where ever necessary, must be adopted by employing mechanical (traps) or chemical techniques along with strict sanitation measures.
  • After selling each crop from the sheds, thorough cleaning of sheds should be done by removing all fixtures, equipment, litter dust, debris followed by brooming and burning. The rat holder cracks, worn out area should be packed with cement.
  • Thorough cleaning of the vegetation six feet around the sheds and spraying of bleaching powder (1 parts) with lime (3 parts) around the sheds for a minimum of 3 feet.
  • Avoid use of litter as manure around the farms.
  • Well cleaning of sheds and equipment with water and appropriate detergent.
  • A thorough disinfection of sheds, equipments as well as farm surroundings by formalin spray at recommended concentration.
  • Foot baths should be always filled with disinfectant.
  • Vehicles visiting the farms should be thoroughly disinfected by appropriate disinfectant spray.
  • Personnel working in laying sectors should not be allowed into brooding/growing sector or feed manufacturing facilities. All visitors must be ensured to walk through foot baths.
  • Disposal of dead birds in hygienic manner either by using incinerator or by pit method is very essential.
 
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