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 to time.

will

be

as

per

NABARD/RBI

guidelines

issued

from

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) (b) (c) Financial (d) Technical/Other (e) Technical/Managerial Staff and adequacy thereof 2. a) i) ii) iii) iv) b) Detailed c) i) ii) iii) iv) v) vi) vii) viii) ix) x) d) i) ii) e) i) ii) iii) iv) Capability Experience soundness Qualifications

special

Location, Location Total Particulars

Area of

TECHNICAL Land and details of of land Site land development, Civil with measurements Poultry Store Egg Office

land the and fencing,

ASPECTS Development project it's cost map gates etc. Structures structures Sheds room room room staff Others machinery Brooders Feeders Waterers Cages Generator mixer Debeaker Vaccinator Freezer equipments) Housing Litter/Cage/Slat (sft./bird) Birds strain purchased birds birds

cost

estimates

along

of

various

civil

Quarters

for

Equipment/Plant

and

Feed

grinder

and

Truck/van/Jeep(Price

Fridge/Deep quotations for

the

above

Type

of Area

housing required

Deep

No. Age

of Source

Proposed birds of

to the of

be

v) vi) vii) f) i) ii) iii) g) h) i) ii) a) b) c) iii) a) b) c) d) iv) i) i) ii) iii) iv) v) vi) a) b) c) vii) j) i) ii) iii) iv) v) k) i) ii) iii) iv) l) i) ii) iii) iv) v) vi)

Cost

of Vaccination Proposed Number efficiency

Feed

birds (Rs. per of purchased programme of Production of eggs (kg of feed/No. of eggs Mortality Projection

bird) birds replacement parameters produced produced) (%) Chart

Flock

Source

Feeding manufacturing purchased Place of purchase Brand Cost (Rs./kg) Chick mash Grower mash Layer mash If manufactured on farm Capacity of feed grinder and mixer Source of raw materials Feed formula Cost of production(Rs./kg) Chick mash Growing mash Layer mash Requirement (kg per bird) Chick mash Grower mash Layer mash Veterinary aid Source Location Distance (km.) Availability of labour and other staff Type of facilities available If own arrangements are made Employed a veterinary doctor/ stock man / consultant Periodicity of visit Amount paid (Rs.) Expenditure per bird (Rs.) Electricity source SEB/ Other Approval from electricity board Connected load Problems of power failure Arrangements for generator of availability Purchased If or own feed Water Source water cleaning and cost eggs sale disposal (km.) weight) (Rs./egg) payment

Availability If investment

of has

Quality sufficient quantity to be made type

of for drinking and of structure, design of of of

Marketing Source Place Basis Price Periodicity of Distance payment realised

(number of

or

m) i) ii) iii) n) o)

Marketing of cull Manure Qty./bird, Empty gunny bags Beneficiary's Comments on

other birds price per Number

unit and

products Rs./bird (Rs./Q) cost/bag experience

technical

feasibility

p) Government restrictions if any 3. FINANCIAL ASPECTS i) Project Cost Sr. Item No. Capital Costs Total Capital Costs(A) Recurring Costs Total Recurring Costs (B)

Physical Unit and Specification

Cost (Rs.)

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 Purchase of brooder cum grower equipment Purchase of layer equipment Total (I) II. Recurring Expenditure Cost of day old chicks Cost of feed upto 25% laying Cost of medicines & miscellaneous expenses upto laying Insurance of sheds and equipment Insurance of birds Total (II) Grand Total (I+II) or say Margin (25%) Bank Loan B. Techno economic parameters Number of birds Number of batches Batch strength Birds purchased per batch Birds considered for brooding cum growing Birds considered for laying Birds considered for culling Floor space per bird in brooder cum grower house (deep litter system) - sft per bird Floor space per bird in layer shed (cage system) - sft per bird Cost of construction of shed (Rs. per sft) Cost of brooder cum grower equipment (Rs. per bird) Cost of cages for layers (Rs. per bird) Cost of day old chick (Rs. per bird) Feed requirement upto laying, i.e. 20 weeks (kg per bird) Feed quantity capitalized (kg per bird) for first two batches- 8.5 kg upto laying and 1.5 kg for initial laying period Feed requirement during laying (kg per bird) - 52 weeks laying Cost of chick and grower mash (average price Rs. per kg) Cost of layer mash (Rs.) Medicines, vaccines, labour and misc. charges (upto laying) - 20 weeks (Rs.) Medicines, vaccines, labour and misc. charges (laying) - 52 weeks (Rs.) Insurance per bird (Rs. per bird) Insurance of sheds and equipment( Rs. per thousand) Egg production per bird (No.) Sale price per egg (Rs.) Sale price of culled bird (Rs.)

204000 20400 100000 444400 37800 285600 20400 2240 9450 355490 799890 800000 200000 600000 2000 2 1000 1050 1020 1000 900 1 0.85 120 20 50 18 8.5 10 40 14 12 10 25 4.50 5.05 300 2.35 60

Manure production (chicks) - kg per bird per week Manure production (layers) - kg per bird per week Sale price of manure (Rs. per ton) Sale price of gunny bags (Rs. per bag) Margin (%) Interest on bank loan (% per annum) Flock chart Years 1 2

0.2 0.5 300 10 25 12

No. of batches purchased 2 2 2 2 2 1 2 2 2 No. of brooder cum 40 40 34 34 34 38 36 34 34 grower weeks 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 6210 11750 12020 11400 11400 11630 11930 11610 11400 gunny bags Sale of 8148 16248 16781 15881 15881 16126 16603 16181 15881 manure Total 529550 1383306 1465455 1328589 1382589 1383064 1438071 1356214 1382589 Expenditure Cost of day 37800 37800 37800 37800 37800 18900 37800 37800 37800 old chicks Cost of feed 242760 242760 206346 206346 206346 230622 218484 206346 206346 upto laying Cost of feed 350769 849231 904615 849231 849231 849231 886154 867692 849231 during laying Cost of 20400 20400 17340 17340 17340 19380 18360 17340 17340 medicines, labour & misc. expenses upto laying Cost of 18269 44231 47115 44231 44231 44231 46154 45192 44231 medicines, labour & misc. expenses during laying Insurance of 2244 2244 2244 2244 2244 2244 2244 2244 2244 sheds & equipment Insurance of 9450 9450 9450 9450 9450 4725 9450 9450 9450 birds 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 444400 Cost Recurring 681692 1206116 1224910 1166642 1166642 1169333 1218646 1186064 1166642 Expenses Total 1126092 1206116 1224910 1166642 1166642 1169333 1218646 1186064 1166642

Costs Income 529550 1383306 1465455 1328589 1382589 1383064 1438071 1356214 1382589 Residual 178200 value Total 529550 1383306 1465455 1328589 1382589 1383064 1438071 1356214 1560789 Benefit Net Benefit -596542 177190 240545 161947 215947 213731 219425 170150 394147 Disc cost 5626692 @ 15% Disc benefit 5942616 @ 15% 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.