Poultry Layer Farming
- Introduction
Poultry egg and meat are important sources of high quality
proteins, minerals and vitamins to balance the human diet.
Commercial layer strains are now available with traits of high
egg production and high feed conversion efficiency. Superior
germplasm of chicken have been developed by both public
and private sectors which met the requirement of Indian
Poultry Industry. 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 manure value and can be used for increasing yield of all crops.
- Scope for Layer farming and its National Importance
Poultry is one of the fastest growing segments of the agricultural sector in India today. India has emerged on the world map as the 3rd largest egg producer (56 billion eggs) and annual growth rate in egg production approximated 6% per year (Source; Report of the Working Group on AH & dairying, 12th Five Year Plan). The current strength of layers in India is estimated to be 230 million and the annual percapita availability of eggs has increased from 7 eggs in 1961 to 52 eggs in 2010. However, the present availability is far below the ICMR recommendation of 180 eggs per capita per annum.
In the poultry industry, value added products utilizing poultry eggs, culled birds for human consumption have been developed. However only 6% of the eggs produced in the country are converted into processed egg products mainly for export.
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, high egg production and profits to the rearers. High quality chicks, equipment,
vaccines and medicines are now available through both public and private players. Technically and
professionally competent guidance is available to the farmers. The managerial 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 enterprises, government intervention, and considerable indigenous poultry genetic
capabilities and adequate support from the complementary veterinary health, poultry feed, poultry equipment and poultry processing sectors.
- Financial assistance available from Banks
Loan from banks with refinance facility from NABARD is available for starting poultry farming. For poultry farming schemes with very large outlays, detailed project reports will have to be prepared. Banks provide financial assistance for the following purposes:
- For construction of brooder/grower and layer sheds, feed store, quarters etc.
- For purchase of poultry equipment such as feeders, waterers, brooders etc.
- For creating infrastructure items for supply of electricity, feed, water etc.
- For purchase of day old chicks or ready to lay pullets.
- 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).
For high value projects, the borrowers can utilise the services of NABARD Consultancy Services (NABCONS) who are having wide experience in preparation of Detailed Project Reports.
- 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.
4.2 The project should include the following information on technical, financial and managerial aspects in
detail.
Technical:
- Land and land development (Location, area, suitability, proximity to road, site map etc.)
- Proposed capacity / farm size
- Civil structures (sheds, feed mixing unit, egg room, godown / store room, office quarters, staff
room etc.)
- Equipments, Plant & Machinery – (Feeder, waterer, cages, feed grinder & mixer, Deep freezer,
vaccinator, debeaker etc.)
- Housing (capacity, Type- Deep litter / Cage, Area required, system of housing (1+2, 1+3, 1+1+2
etc.) - Chicks – (Strain, number of birds / batch strength, source of chicks, vaccination of chicks etc.)
- Feeding (Feed requirement, source of feed, type of feed – chick, grower and layer mash, price of
feed etc.) - Availability of utilities – Water, power & fuel
- Veterinary aid and transportation arrangements
- Production parameters (Egg production, Feed efficiency – FCR, Mortality etc.)
- Flock projection chart
- Marketing (Marketing of eggs / culled birds and other products / by-products – place of
marketing, basis of payment (kg or no.), price per unit etc.)
Financial:
- Project cost – capital (land, building, chicks, plant and machinery etc.) and recurring costs
- Funding pattern (Margin contribution, bank loan, etc.)
- Techno-Economic assumptions
- Income – expenditure statement
- Cash flow analysis showing financial indicators (IRR, NPW, BCR and DSCR)
- Analysis of ratios (DER, ROCE, current ratio, etc.)
- Repayment schedule indicating repayment of principal and payment of interest
Managerial:
Borrower’s profile
- Individual/Partnership/ Company/Corporation/ Co-operative Society/Others
- Capability in managing the proposed business
- Experience in the proposed activity or others
- Financial soundness
- Technical/Other special qualifications
- Technical/Managerial Staff and adequacy thereof
Others:
- Name of the financing bank branch
- Training facilities
- Assistance available from State / Central Government
- Regulatory clearances, if any etc.
- Appraisal of the project
The project so formulated considering the above mentioned aspects should be submitted to the nearest branch of the bank for availing credit facility for establishment of the layer farm. The bank will then examine the project for its technical feasibility, financial viability and bankability.
- Sanction of Bank loan and its disbursement
After ensuring technical feasibility and financial viability, the loan is sanctioned by the bank. The loan is disbursed in stages viz., construction of sheds / other civil structures, purchase of equipment and machinery, recurring cost on purchase of chicks, feeds, medicines, etc. The end use of the loan is verified and constant follow up / monitoring is done by the bank.
- Lending terms – General:
7.1 Outlay:
Outlay of the project depends on the local conditions, unit size and the investment components included in the project. Prevailing market prices / cost may be considered to arrive at the outlay.
7.2 Margin Money:
Margin depends on the category of the borrowers and may range from 10% to 25%.
7.3 Interest Rate:
Banks are free to decide the interest rates within overall RBI guidelines. However, for working out financial viability and bankability of model project, the rate of interest is assumed at 12.50% p.a.
7.4 Security:
Security will be as per RBI / NABARD 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 installments 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, equipment) may be insured. Wherever necessary, risk/mortality fund may be considered in lieu of insurance.
A model project with 20000 layers (1:2 cage system) is given below. This is indicative and the applicable input and output costs as also the parameters observed at the field level may be incorporated.
- Project Cost
| I. Capital Cost | Amount Rs. |
| Construction of brooder cum grower house | 2000000 |
| Construction of layer house | 3400000 |
| Purchase of brooder cum grower equipment | 204000 |
| Purchase of layer equipment | 1000000 |
| Total (I) | 6604000 |
| II. Recurring Expenditure | |
| Cost of day old chicks | 525000 |
| Cost of feed upto 10% of feed requirement during laying | 3588892 |
| Cost of medicines & miscellaneous expenses upto laying | 244800 |
| Insurance of sheds and equipment | 33350 |
| Insurance of birds | 94500 |
| Total (II) | 4486543 |
| Grand Total (I+II) | 11090543 |
| Margin (25%) | 2772636 |
| Bank Loan | 8317907 |
*It is assumed that the farmer is having his own necessary arrangements for storage of feed.
- Techno economic parameters
| Number of birds | 20000 |
| Number of batches | 2 |
| Batch strength | 10000 |
| Birds purchased per batch | 10500 |
| Birds considered for brooding cum growing | 10200 |
| Birds considered for laying | 10000 |
Birds considered for culling 9000
Floor space per bird in brooder cum grower house (deep 1
litter system) – sft per bird
Floor space per bird in layer shed (cage system) – sft per 0.85
bird
Cost of construction of shed (Rs. per sft) 200
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) 25
Feed requirement upto laying, i.e. 20 weeks (kg per bird) 8.5
Feed requirement during laying (kg per bird) – 52 weeks 40
laying
Cost of chick and grower mash (average price Rs. per kg) 18
Cost of layer mash (Rs.) 16
Medicines, vaccines, labour and misc. charges (upto laying) 12
– 20 weeks (Rs.)
Medicines, vaccines, labour and misc. charges (laying) – 52 20
weeks (Rs.)
Insurance per bird (Rs. per bird) 4.5
Insurance of sheds and equipment( Rs. per thousand) 5.05
Egg production per bird (No.) 310
Sale price per egg (Rs.) 3.15
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) 12.50%
* Feed quantity capitalized for first two batches- 8.5 kg up to laying and 10% of the feed requirement during the laying period
- 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 | 0 | 2 | 2 | 1 | 2 | 2 | 2 | 1 | 2 |
- Economics
| Item /
Year |
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| Income | |||||||||
| Sale of
eggs |
71359
62 |
172765
38 |
184032
69 |
172765
38 |
172765
38 |
172765
38 |
180276
92 |
176521
15 |
172765
38 |
| Sale of
culls |
0 | 108000
0 |
108000
0 |
540000 | 108000
0 |
108000
0 |
108000
0 |
540000 | 108000
0 |
| Sale of
gunny bags |
62094 | 117479 | 120165 | 114011 | 114011 | 116323 | 119270 | 116062 | 114011 |
| Sale of
manure |
81480 | 162480 | 167808 | 158808 | 158808 | 161256 | 166032 | 161808 | 158808 |
| Total | 72795
36 |
186364
97 |
197712
42 |
180893
57 |
186293
57 |
186341
17 |
193929
94 |
184699
86 |
186293
57 |
| Expenditu
re |
|||||||||
| Cost of
day old chicks |
52500
0 |
525000 | 525000 | 525000 | 525000 | 262500 | 525000 | 525000 | 525000 |
| Feed
consumpti on upto laying (kg) |
17340
0 |
173400 | 147390 | 147390 | 147390 | 164730 | 156060 | 147390 | 147390 |
| Cost of
feed upto laying |
31212
00 |
312120
0 |
265302
0 |
265302
0 |
265302
0 |
296514
0 |
280908
0 |
265302
0 |
265302
0 |
| Feed
consumpti on during |
29230
8 |
707692 | 753846 | 707692 | 707692 | 707692 | 738462 | 723077 | 707692 |
laying (kg)
Cost of 46769 113230 120615 113230 113230 113230 118153 115692 113230
feed 23 77 38 77 77 77 85 31 77
during
laying
Cost of 24480 244800 208080 208080 208080 232560 220320 208080 208080
medicines 0
, labour &
misc.
expenses
upto
laying
Cost of 14615 353846 376923 353846 353846 353846 369231 361538 353846
medicines 4
, labour &
misc.
expenses
during
laying
Insurance 33350 33350 33350 33350 33350 33350 33350 33350 33350
of sheds &
equipmen
t
Insurance 94500 94500 94500 94500 94500 47250 94500 94500 94500
of birds
Total 88419 156957 159524 151908 151908 152177 158668 154447 151908
27 73 12 73 73 23 66 19 73
Gross 29241 294072 381883 289848 343848 341639 352612 302526 343848
Surplus* 51 4 0 4 4 4 8 6 4
*A part of recurring expenses for the first year (as detailed at A ii) has been capitalized in the project cost and the same has not been netted out from the expenditure shown during the first year at “C” above. Hence while arriving at the surplus, the recurring expenditure has been included / added
- Calculation of NPV, BCR & IRR
| Years | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 |
| Capital
Cost |
660400
0 |
||||||||
| Recurri
ng Expens es |
884192
7 |
156957
73 |
159524
12 |
151908
73 |
151908
73 |
152177
23 |
158668
66 |
154447
19 |
151908
73 |
| Total
Costs |
154459
27 |
156957
73 |
159524
12 |
151908
73 |
151908
73 |
152177
23 |
158668
66 |
154447
19 |
151908
73 |
| Income | 727953
6 |
186364
97 |
197712
42 |
180893
57 |
186293
57 |
186341
17 |
193929
94 |
184699
86 |
186293
57 |
Residua 255852
l value 5
Total 727953 186364 197712 180893 186293 186341 193929 184699 211878
Benefit 6 97 42 57 57 17 94 86 82
Net – 294072 381883 289848 343848 341639 352612 302526 599700
Benefit 816639 4 0 4 4 4 8 6 9
1
Disc 739375
cost @ 35
15%
Disc 804339
benefit 23
@ 15%
NPV 649638
8
BCR 1.09
IRR 37.93%
- Repayment Schedule
| Year | Loan | Gross surplus | Interest | Principal | Total
repayment |
Net surplus |
| 1 | 8317907 | 2924151 | 1039738 | 0 | 1039738 | 1884413 |
| 2 | 8317907 | 2940724 | 1039738 | 800000 | 1839738 | 1100986 |
| 3 | 7517907 | 3818830 | 939738 | 1600000 | 2539738 | 1279092 |
| 4 | 5917907 | 2898484 | 739738 | 900000 | 1639738 | 1258746 |
| 5 | 5017907 | 3438484 | 627238 | 1500000 | 2127238 | 1311246 |
| 6 | 3517907 | 3416394 | 439738 | 1500000 | 1939738 | 1476656 |
| 7 | 2017907 | 3526128 | 252238 | 1700000 | 1952238 | 1573890 |
| 8 | 317907 | 3025266 | 39738 | 1675641 | 1715379 | 1309887 |
