WELCOME

OUTLINE OF REASERCH WORK

An Economic Analysis of Broiler

Production in Palghar District (M.S)

Presented by
Shubham Balbhim Katkar
Reg no. ADPM/18/2639
 ADVISORY
COMMITTEE
Chairman and Dr. S.R. Torane
Research Guide
Professor (CAS), & DDR

Department of Agricultural Economics,

College of Agriculture, Dapoli.

Members Dr. A.C.Deorukhakar Dr. J. R. Kadam

Professor,
Department of Agricultural Economics,
College of Agriculture, Dapoli.
Dr. S. M. Kulkarni
Associate Professor
(CAS) Statistics
Department of Agricultural Economics
College of Agriculture, Dapoli
Associate Professor,
Department of Extension Education,
College of Agriculture, Dapoli.
Dr. D. B. Malave
Assistant Professor,
Department of Agricultural
Economics,
College of Agriculture, Dapoli
POINTS TO BE COVERED
 Introduction
 Objective
 Review of Literature
 Methodology
 Literature cited
 INTRODUCTION
• Agriculture besides farming includes forestry, fruit cultivation,
dairy, poultry, mushroom, sericulture, bee keeping etc.
• Agriculture plays a key role in the overall economic and social
well-being of our country.
 Role of livestock in agriculture
• Integral component of farming system.
• Provide draft power and manure inputs to the crop.
• Contributes to the foreign exchange.
• Indian poultry and egg consumption continuously grow up.
 General information of poultry
• Poultry farming includes rearing of domesticated birds such as
Chickens, Ducks, Turkeys and Gees for meat and eggs.
• Most common and widely raised poultry birds in the world are chicken.

• Poultry production has three segments

i. Layers

ii. Broiler

iii. Backyard/family production ( both eggs and chicken )

• Layers raised for - egg production.

• Broilers - meat production.

• Poultry meat – source of proteins, minerals and vitamins.

• Commercial broiler farming is most successful business in Asia and

world.

• Meat, egg and manure has good market value.

 Poultry scenario of world
• Total broiler meat production (April 2018) – 95500 metric tones.

• India rank in egg production(2017-18) – Third ( 84 billion eggs )

• India rank in meat production(2017-18) – Fifth (4855 metric tones)

• Per capita consumption

Recommended Average
Meat (kg/annum) 11 3.6
Eggs / annum 182 63
Poultry scenario of India
• Leading states in broiler meat and egg production in India -
Andhra Pradesh, Tamil Nadu, Maharashtra, Karnataka and West
Bengal.
• Maharashtra rank in meat production(2017-18) – Third ( 571.20
metric tones)
 Need of study
Increasing industrialization, increasing population growth,
changing food habit, urbanization and nearness to Mumbai city,
increased per capita income and awareness about health care etc.
are contributing towards rising demand of poultry products.
 OBJECTIVES

1. To study the existing management practices in broiler

production.

2. To work out cost and returns in broiler production.

3. To assess the financial feasibility of broiler production.

4. To study the disposal pattern of broiler birds.

5. To document the constraints in broiler production

 REVIEW OF LITERATURE
1. Existing management practices in broiler production.
•Rahman (2015) studied the Management of broiler farms in Aizawl district
of Mizoram. The study revealed that farmers were rearing adult birds in
raised slatted floor made up of bamboo. The majority of farmers (96.67 %)
did not vaccinate their birds and the mortality rate of the poultry were very
high (17.67%) due to the diseases like enlargement of liver, diarrhea,
paralysis, dysentery etc. Most of the farmers (60.00%) sold their birds at the
age above 3 months or when the birds gained body weight of 3-4 kg to the
wholesalers.
• Mohan kumar (2016) studied the economic analysis of investment in broiler

production Chikkaballapur district of Karnataka. The study revealed that

majority of farms was adopted all-in all-out system of rearing and deep litter

system of housing. The average age at marketing of bird was 43.71 days. Chicks

were fed thrice and matured birds twice in a day. 60 per cent of the farms were

preparing own broiler feed whereas 40 per cent farms were buying readymade

feed. 70 per cent farms were dependent on hired labour and 30 per cent farms

were managing farms with family labour. The average batch interval between

the two successive batches was 21.63 days. All non-contract farms procuring

inputs from dealer/agent whereas all contract farms procure inputs from contract

company.
 2. To work out cost and returns in broiler production.
• Jheeba (2015) studied the cost and return structure of poultry enterprise in Jaipur district

of Rajasthan. The study revealed that the Total cost per bird was Rs.185 in the broiler

farm and Rs. 602 in the layer farm. The variable costs consist 79.14 per cent in broiler

farm and 90.01 in layer farm of total costs. The total fixed cost consist 20.86 per cent in

broiler farms and 9.99 per cent in layer farms of the total cost. Feed cost was Rs. 86.57

and Rs. 413 per bird which was the major item both in broiler and layer farms,

respectively. Cost of chicks in broiler farm was the second most cost item which was

about 21.87 per cent of the total cost where as in layer farms it was about 4.33 per cent of

the total cost incurred in the farm. The revenue from the sale of broilers was Rs.222 per

bird constituting 96.34 per cent of the total revenue in broiler farms and from the sale of

eggs did Rs.718 per bird constitute 92.35 per cent of the total revenue in layer farms. The

gross return was Rs. 231 in broiler farms and was Rs.778 in layer farms. The net return

was Rs.46.29 and Rs.175.60 in broiler and layer farms, respectively. The B-C ratio was

1.25 in broiler farm and 1.29 in layer farms.

• Mohan kumar (2016) studied the economic analysis of

investment in broiler production Chikkaballapur district of

Karnataka. The study revealed that In non-contract broiler

farms, the average per bird cost of production and gross returns

were Rs. 127.21 and Rs. 163.17, respectively resulting into net

returns of Rs. 35.96 per bird. In contract broiler farms, the

average the average per bird cost of production and gross

returns were Rs. 10.60 and Rs. 15.39, respectively with net

returns of Rs. 4.79 per bird.

 3. Financial feasibility of broiler production.

• Manoharan (2012) carried out cost and return analysis of different sizes of

integrated broiler farms in Theni District of Tamil Nadu State has been

carried out based on the primary data collected from 150 broiler farmers.

The study revealed that the payback period was found to be 3.72, 3.18 and

2.81 years in small, medium and large farms respectively. The net present

value was found to be Rs. 196210, Rs. 413132 and RS.1033091 in small,

medium and large farms respectively and internal rate of returns was 33%,

43% and 53% in small medium and large farms respectively.

• Mohan kumar (2016) studied the economic analysis of investment
in broiler production Chikkaballapur district of Karnataka. His
study showed that payback period in non- contract and contract
broiler farms in the study area was 1.03 years and 5.75 years,
respectively. The net present value is positive, benefit cost ration is
more than one and internal rate of returns are higher than
prevailing rate of interest. Therefore broiler poultry business is
economically feasible. In care of contract farms payback period is
higher, net present value is negative, benefit cost ratio is less than
one and is at par to prevailing rate of interest which can be
consider to be low(12.75%). Hence the contract farms were not
economically feasiblity of broiler production.
 4. Disposal pattern of broiler birds.

• Gangwar et al. (2010) studied the marketing of broiler meat

in the organized and unorganized markets in Delhi. The study
revealed that the most prominent channel in organized market
was been found such as Producer - Commission agent-
Supplier-Distributor- Shopping Malls/Hotels/Retailer-
Consumer; whereas the same in the unorganized market was
Producer-Wholesaler- Dresser-cum-Retailers –Consumer.
• Mohan kumar (2016) studied the economic analysis of
investment in broiler production Chikkaballapur district of
Karnataka. The study revealed that, out of total quantity
produced, majority of the produce (99.42%) was sold to the
wholesaler and retailer whereas in case of contract, all the
quantity produced was sold to the wholesaler and retailer only.
 5. Constraints in broiler production.

• Yitbarek and Atalel (2013) studied constraints and

opportunities of village chicken production in Ethiopia by
collecting data from 150 respondents. The result revealed that
the main constraints were feed shortage (28 %), predation
(30%) and flock mortality (28 %). The farmers use traditional
medicine to treat chickens (82%). Hatchability percentage was
72 per cent.
• Mohan kumar (2016) studied the economic analysis of
investment in broiler production Chikkaballapur district of
Karnataka. Study showed that, frequent power cuts, high cost of
feed and day old chicks and incidence of diseases were the
major production constraints and frequent fluctuations in market
prices and more cutting on sale price were the major problems in
marketing of birds.
 METHODOLOGY
1 .Sampling design
• Selection of region

Maharashtra is divided in to nine agro climatic zones taking in

to consideration the rainfall pattern, quantum and distribution, in
which North Konkan zone will be purposively selected for the
present study where there is more potential for poultry business.
• Selection of district

Konkan zone comprises of 5 districts namely Palghar, Raigad,

Ratnagiri, Sindhudurg and Thane. Out of which Palghar district will
be selected purposively.
• Selection of Tahsils

Four tahsils namely Palghar, Talasari, Vikramgad, and Dahanu

having maximum broiler poultry units are selected purposively.

• Selection of Broiler units

From each tahsil twenty broiler units will be selected randomly

and from each tahsil four villages will be selected randomly, in such a
way that each village consists of 5 samples. Thus the total sample
consists of 80 broiler units which were analyzed to obtain appropriate
results.
• Selection of Broiler units

From each tahsil twenty broiler units will be selected randomly

and from each tahsil four villages will be selected randomly, in such a
way that each village consists of 5 samples. Thus the total sample
consists of 80 broiler units which were analyzed to obtain appropriate
results.
• Method of data collection

The data will be collected by survey method, with the help of

specially designed schedule by personal interview with the broiler
production unit owners.
The information regarding fixed and variable costs, returns,
profitability, disposal pattern and constraints of selected broiler
poultry units will be obtained.
• Reference period

The information and data for the present study will be collected in the
month of June 2019 pertained to the agriculture year 2018-19 from the
selected broiler production unit owners.
• Analysis of data

As per the objectives of study for drawing meaning full conclusions the
selected poultry units will be classified on the basis of appropriate criteria’s
and tabular analysis will be made.

The stratification will be carried out with the help of statistical tools
mean and standard deviation.
• Analytical techniques

For the purpose of achieving specific objectives of the study, the

collected data will be analyzed to draw the conclusions. The data will be
arranged in suitable tables and simple statistical tools such as average,
percentage, ratios, discounted and undiscounted measures will be used for
analysis.
• Terms and concepts used

Standard cost concepts in farm management studies will be used to work out
total cost of broiler farming units.

A) Variable costs

i) Cost of feed

ii) Cost of chicks

iii) Cost of labour

iv) Veterinary expenditure

v) Interest on working capital

vi) Miscellaneous charges

B) Fixed costs

i) Depreciation on building and implements

ii) Interest on Fixed capital

•
  and returns per farm, per batch and per bird
• Cost
• Break-even analysis

The break-even point for broiler farm (in terms of quantity) was calculated by

following formula:

Q=

Where,

Q = Break-even output in kg

Fc = Annual fixed cost in Rs.

P = price per unit of output in Rs.

Vc = Variable cost per unit of produce in Rs.

  
• Break-even analysis (in terms of monetary value)

BER=

Where,

BER = Break-even returns in Rs.

F = Fixed cost per unit in Rs.

V = Variable cost per unit in Rs.

P = Price per unit of output in Rs.

•• Margin of safety
 
Excess of production over the break-even point is called margin of safety. It
indicates the strength of the enterprise. Margin of safety as percentage to the
total output is represented by following formula :

Margin of Safety = ×100

• Efficiency measures

i) Livability (%)

Livability (%) = ×100

Normal value ranges from 96-97 per cent.

   efficiency or Feed Conversion Ratio (FCR)
• Feed
ii)

FCR =

A value of 1.5 or lesser at 6 weeks of age is preferable.

iii) Broiler Performance Efficiency Factor (BPEF)

BPEF = × 100

Higher the value better will be the index. A value of 100 or more is

desirable.
•  
• iv) Broiler Farm Economy Index (BFEI)

BFEI =

A value of 2.0 and above indicates better management of farm and

optimal performance of the birds.
• Financial feasibility of broiler units

Financial feasibility of investment in broiler farming will be judged

with the help of

following discounted and undiscounted measures.

•• i) Net Present Value (NPV)
 
It is the discounted value of net cash flow of the broiler unit during its life
time. It is computed as,

NPV=

Where,
P1 = Net cash flow in first year

i = Discount rate

t = Time period
C= Initial cost of the Investment

For viability of investment NPV should be positive at prevailing rate of

interest.
•ii) Pay Back Period (PBP)
It is the number of years the project takes to recover its cost from its

return. Payback period of the project was estimated by using the

following formula.

P=

Where,

P = Payback period in years,

I = Investment in rupees,

E = Annual net cash revenue in rupees.

iii) Benefit Cost Ratio (BCR)

• It is the ratio of discounted value of all cash inflows to the discounted

value of cost outflows during life of project. It is computes as,

Where,

Bt = Benefits or returns from the project

Ct = Costs involved in the project

r = Discount rate

n = life of the project

If BCR is greater than one, the investment is considered feasible.

•  Internal Rate of Return (IRR):
iv)

The internal rate of return is that rate of discount at which NPV is zero.

IRR=

Where,

LDR = Lower discount rate

HDR = Higher discount rate

If IRR is greater than prevailing rate of interest then investment is

feasible.
V) Profitability Index
It is the ratio of net present value of the cash flows to the initial
capital expenditure.

It is given by,

PI =  
• Disposal pattern:

The information obtained from the broiler production unit owners to

know the extent of production of the broiler birds and its disposal pattern.
Per farm production and disposal of broiler poultry birds will be worked
out to know the various channels followed by the poultry farms in
marketing of birds.
• Constraints faced by broiler owners

Different constraints faced by broiler owners in production process and

in marketing of birds will be documented and they will be ranked by
assigning percentages to the total, based on that severity and conclusions
will be drawn.
 TENTATIVE PROGRAMME OF
RESEARCH WORK

Sr.
Proposed technical work Proposed work
No.

1. Data collection December 2019 - January 2020

2. Data processing and analysis February2020 – March 2020

3. Interpretation of result and Thesis Writing April - 2020

4. Thesis submission May 2020