Economic Affairs
  • Year: 2019
  • Volume: 64
  • Issue: 2

Financial Feasibility of Broiler Production in Case of Non Contract and Contract Farms

1Department of Agricultural Economics, College of Agriculture, Dr. B S K K V, Dapoli, Maharashtra, India

2Deputy Director of Research and PME Cell (I/c), Dr. Balasaheb Sawant Konkan Krishi Vidyapeeth, Dapoli, Maharashtra, India

*Corresponding author: mohanghalli28@gmail.com

Online published on 12 September, 2019.

Abstract

An attempt was made to explore the financial feasibility of broiler poultry production in Chikkaballapur district of Karnataka. The objective of the study was to work out cost and returns in broiler production and to assess the financial feasibility of broiler production. The data was collected from 90 broiler farms consists of both non contract and contract farms. In the study area, the average fixed capital investment made per bird was 213.74 and 151.51 in non contract and contract farms respectively. Cost of production and net returns per bird were 123.16 and 18.44 respectively in case of non contract farms against 11.02 and 4.62 in contract farms. In the study area, number of birds to be raised annually to cover the cost of production in non contract and contract farms was found to be 13118 and 26692. The feasibility study shows that, the investment in non contract broiler farms was economically feasible with NPV of 2892260, BC ratio of 1.14 and IRR 49.53 per cent indicating more returns per rupee invested. Conversely, investment in contract broiler farms was just marginally feasible with NPV of 28928, BC Ratio of 1.41 and IRR 16.39 percent.

Dissimilar operation pattern was found between non contract and contract farms, as farm owners were compensated only with rearing charges and take away major portion of the returns.

Non contract farms were found to be more financially feasible than contract farms.

Keywords

Flock size, Depreciation, Mortality, Sanitation, Payback period, Break even analysis, Internal rate of returns