FARM BUSINESS

PROPOSAL
on DAIRY CUM BIO-GAS FARMING

GROUP-8
DIPTI PARIDHI KINDO -11
SOUMYA RANI GOUDA -24
ASEEM SANGA -49
FR. FREDDY -S-4

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CONTENTS::
¨ GOAL
¨ FARM OVERVIEW
¨ LABOUR MANAGEMENT
¨ TECHNICAL FEASIBILITY
¨ ECONOMIC VIABILITY
¨ MARKETING
¨ SWOT
¨ SOCIAL COST BENEFIT ANALYSIS

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 Statement

•• Goal:
Goal:
To
To build
build aa dairy
dairy farm
farm and
and linking
linking itit with
with
bio-gas
bio-gas plant
plant which
which will
will further
further help
help inin
going
going for
for organic
organic farming
farming after
after five
five years.
years.

•• Location
Location ::Kathiawar
::Kathiawar district
district of
of Gujarat
Gujarat
•• Beneficiary::
Beneficiary:: Community
Community people
people
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 FARM OVERVIEW:
¨ The Proposal has been designed in such a way that
it can generate income
• from milk
• Bio gas
• Manure(Leading towards Organic Farming
in future)
A coordinated dairy farm is not only environment-
friendly, but also meets three basic demands of
farmers- protein, fuel and fertiliser
The different resources needed in this project are
as follows:
Land, Labor and Livestock
Apart from profit making it also serves the
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LOCATION::
¨ Kathiawar or
Kathiawadi is a peninsula
in western India, on the
Arabian Sea coast of
Gujarat state. It is bounded
on the north by the great
wetland of the Rann of
Kutch, on the northwest
by the Gulf of Kutch, on
the west and south by the
Arabian Sea, and on the
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Selection of Buffalo:
¨ The breed ‘Jaffarabadi’ ,high yielding variety than
Murrah, is available in the area so, the location is
selected.
¨ Produce more milk than local cows and with a
higher fat content (1.4% higher). Fetches a higher
price per litre.
¨ Well-adapted to local feed sources. Performs well
on poor quality roughage and agricultural residue
(feeds even on millet stover, unlike cows).
¨ Improved buffaloes, in general, are comparatively
more resistant to prevailing diseases than exotic
breeds of cattle.
¨ Gives more manure than cows.
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¨ Cost of rearing calves not considered as it
will be nullified by their sale value or
retention value.
¨ Fodder cultivation considered in two acres
and working capital for one crop / season
considered. Two crops considered per year.

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Govt. Support:
¨ Central and State Governments are giving
considerable financial assistance for
creating infrastructure facilities for milk
production. The ninth plan outlay on
Animal Husbandry and Dairying was Rs.
2345 crores.

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 HUMAN RESOURCE

• Trained laborers
• Dairy Farm knowledge
•Bio-gas plant expertise
• proven interest in organic food production

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(A) TECHNICAL FEASIBILITY
¨ The selected area has availability of
veterinary aid.
¨ Availability of buffalo in nearby
livestock market
¨ Availability of Green/dry fodder,
concentrate feed, medicines etc and good
grazing ground.
¨ Good number of co-operatives present in
the area.
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(B)ECONOMIC VIABILITY:
¨ Model Unit Cost and Economics of a 20
Buffalo Unit AND BIO-GAS PLANT
¨ Type of Animal : Jaffarabadi Breed Buffalo
¨ No. of Animals : 20

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 . PROJECT COST of DAIRY:
PARTICULARS AMOUNT(Rs.)
Cost of 20 Buffaloes @ 14,000 per Buffalo 2,80,000

Cost Of Construction of shed 60,000

Cost of Powered Equipment 80,000
Cost of non-powered Equipment 20,000
TOTAL CAPITAL COST =4,40,000
Food for Buffaloes @20,000 per Buffalo 4,00,000
Vet. Services @ 2,000 per Buffalo 40,000
8 Laborers @ 2,000 per month 1,92,000
Insurance for Buffalo @1000 per Buffalo 20,000
Interest on loan amount[200000] @10% 20,000
TOTAL RECURRING COST: 6,72,000
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 . PROJECT COST of BIO- GAS:
PARTICULARS AMOUNT(Rs.)

Cost of gas holder and frame 15000

Cost of piping and stove 10000

Cost of civil engineering and construction 20,000

TOTAL CAPITAL COST =45000

The interest on investment(45000)@ 10% pa 4500

Depreciation on gas holder and frame @10% pa 1500

Depreciation on piping and stove @ 10% p.a. 1000

Depreciation on structure @ 10 % 2000

TOTAL RECURRING COST: =9000

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INCOME IN THE FIRST YEAR
FROM MILK
PARTICULARS TOTAL
20 BUFFALOES * 250 DAYS * 9 =45,000 LTRS. OF MILK
LITRES
45,000 LITRES @ 30 RS =RS. 13,50,000

FROM BIO-GAS AND MANURE

PARTICULARS TOTAL
Gas 10m3 per day @ Rs 2.5 /m3 for 300 days =Rs 7500
(Assuming only 300 days of production)
Cow dung @ 300 kg production per day = 90,000kgs
300kg*300days
90 tonnes of dung will give manure= =21,600kgs
(as 1 tonne of fresh dung gives 240kgs of manure)

Income from manure pa [1kg manure= Rs 8] Rs 172800

TOTAL INCOME [1350000+7500+172800] = Rs.15,30,300/-

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 CASH INFLOW AND OUTFLOW
YEAR TOTAL REVENUE TOTAL NET INCOME
EXPENSES
Zero year(2012) 4,85,000 -4,85,000

First year(2013) 1530300 681000 8,49,300

Second year(2014) 1540000 681000 8,59,000

Third year(2015) 1535000 690000 8,45,000

Fourth year(2016) 1545000 695000 8,50,000

Fifth year(2017) 1550000 7,00,000 8,50,000

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NET PRESENT VALUE:
¨ NPV = [CF0/(1+r)0 ] + [ CF1/(1+r)1 ] + ------
+ [ CF t /(1+r)t ]
¨ NPV = [-4,85,000/(1+0.1)0 ] +
[ 8,49,300/(1+0.1)1 ] + [ 8,59,000 /(1+0.1)2 ] +
[ 8,45,000/(1+0.1)3 ]+ [ 8,50,000 /(1+0.1)4 ]+
[ 8,50,000 /(1+0.1)5 ]
¨ Where Cost of capital /Interest Rate @ 10%
¨ NPV = 17,40,212 APPROX

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IRR
¨ It is the discounting rate which makes the
NPV equal to Zero. Here the capital R is the
IRR of the project presented here.
[-4,85,000/(1+R)0 ] + [ 8,49,300/(1+R)1 ] +
[8,59,000 /(1+R)2 ] + [ 8,45,000/(1+R)3 ]+
[ 8,50,000 /(1+R)4 ]+ [ 8,50,000 /(1+R)5 ]=0 
¨ IRR= 124%
¨ Since,R > r
¨ So, this project is a highly profitable
business enterprise.
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Pay-Back Period::
Initial investment = 4,85,000
From the first year = 8,49,300
At the mid of 7th month = 4,85,000

The total payback period of the business would be 7 months.

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 Marketing::
SMALL HOUSEHOLD
HOLDER CONSUMPTION
DAIRY (GHEE, MILK)

FARM Community
CC
30%
APPROX
Bio-gas Manure Organic
RAW Farming
-Milk

Local Chilling
70%
APPROX center Poison-free food

MILK PRIVATE
COOPERATIVE DAIRIES
COLLECTION (PASTEURISED Urban
CENTER MILK), BUTTER, Consumers
YOGHURT, ICE
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SWOT Analysis:
¨ . STRENGTHS::
1.Nearness of the selected area to veterinary,
breeding and milk collection centre and the
financing bank's branch.
2. Availability of “JAFFARABADI” breed in the
area.
3. Availability of good grazing ground/lands and
green/dry fodder, concentrate feed, medicines etc.

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¨ . WEAKNESS::

1. Marketing
– getting the best price at the right time.
2. Convincing people for Organic Farming

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Opportunity::
¨ Health and environment problems related to pesticides
decreased .
¨ to protect the consumer’s health by providing them with
poison-free food by promoting the organic farming.
¨ At the 38th Dairy Industry Conference (IDC), according
to NDDB’s Survey, in order to meet the projected
demand of 180 million tonnes of milk by 2021-22, milk
production in the country has to grow by 5 million tonnes
annually double than the present growth which is 2.5
million tonnes per annum.

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Threat:Govern regula
vernment regulation
¨ Government Regulation.
¨ Any fatal diseases.

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CONCLUSION::
¨ SOCIAL COST BENEFIT ANALYSIS->
 Ideal Programme for Weaker Sections of the
Society . (even Women can be involved)
 Eco-friendly Activity.
 Increase in the milk production and
consumption .
(The per capita availability of milk is only 226
grams where as the recommended quantity is
500 grams per person per day.)
 Dairying and Employment Generation.
 Organic Farming(Poison–free food)
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 ¨ Any Questions?

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