PROJECT REPORT ON SHEEP FARMING

Project description
Sheep is a multi-functional animal and plays a significant role in the economy and
nutrition of landless, small and marginal farmers in the country. Sheep rearing is an
enterprise which has been practiced by a large section of population in rural area.
Sheeps are among the main wool-producing animals in India and has huge domestic
demand. Sheep rearing under intensive and semi-intensive system for commercial
production has been gaining momentum. A number of commercial Sheep farms have
been established in different regions of the country.

Production Technology
Project Location
Sheep farm is located in the area where assured market round the year is available.
It is easily accessible to the main road.

Housing
Low cost housing will be constructed on a raised platform (about 1 meter height from
ground level) by using bamboo/wooden poles or ‘pakka’ building by establishing
concrete pillars. Floor and side walls will be made of wooden material. Roof will be
thatched with coconut leaves, grass or asbestos sheets

Feed & Fodder cultivation

Fertile land with assured irrigation facilities is available so that fodder crops could be
successfully raised and abundant good quality green fodders will be made available
for animal feeding throughout the year.

Water
Good quality fresh water for animal drinking and for the cleaning, washing etc. is
available.

Labour
Honest, economic and regular supplies of labours are available.

Veterinary Aid
Veterinary aid/ breeding centres facilities are availability near the proposed Sheep farm.
Market potential
The market potential for sheep farming is quite promising,
especially given the multiple revenue streams it offers. Here are some key points:
Revenue Streams
Meat Production: Sheep are primarily raised for their meat (lamb and mutton).
Wool Production: Sheep wool is used in textiles, and there is a consistent market for high-quality wool.
Dairy Products: Sheep milk and related products (like cheese and yogurt) are gaining popularity.
By-products: Sheepskin and parchment are also valuable products.
Export Potential
The export potential for sheep farming is quite promising, especially given the rising
global demand for sheep products Here are some key points:

Global Demand

Rising Appetite: The demand for sheep meat (lamb and mutton) is projected to grow,
particularly in markets like the Middle East, Asia, and Europe.
Export Growth: Exports account for a significant portion of total sheep
meat production in many countries, with expectations for further growth.

SWOT Analysis
Strengths:
Low Initial Investment: Sheep farming requires relatively low capital investment compared to other livestock.
High Feed Conversion Efficiency: Sheep efficiently convert feed into meat and wool.
Adaptability: Sheep are well-suited to various climates, including arid and semi-arid regions.

Multiple Income Sources: Products like meat, wool, milk, and by-products provide diverse income streams

Weakness:
Infrastructure Needs: Adequate marketing infrastructure, such as meat processing facilities and cold storage, is essential.
Market Fluctuations: Prices for sheep products can vary, affecting profitability.

Disease Management: Sheep are susceptible to various diseases, requiring vigilant health management.

Opportunities

Rising Demand: There is an increasing demand for sheep products, especially in regions like Asia and the Middle East.

Export Potential: Countries with advanced veterinary infrastructure and quality breeds have untapped export potential.

Government Support: Policies and initiatives aimed at promoting scientific sheep farming can boost productivity and profitability.
Threats
Market Competition: Intense competition from other livestock and alternative protein sources.
Environmental Factors: Climate change and natural disasters can impact sheep farming operations.

Regulatory Changes: Changes in agricultural policies and regulations can affect business operations.
 Financial Appraisal of Goat Schemes

Breed Of Sheep
System of Rearing Semi Intensive
No. of Ram 25
No. of Ewe 500
Purchase cost - Ram 20000
Purchase cost - Ewe 25000
A. Production Traits
Age at Maturity (Months) 10-11
Kidding interval (Months) 8
Kidding percentage 80
Twinning percentage 60
No. of kiddings per year 1.5
Sex ratio 1:1
Mortality(%) Adults 5
Kids 10
Saleable age of kids (months) 8-9
Culling of Ewe (% per year) from second year 20
onwards

B. Expenditure norms
Space requirement (sq [Link] head)
Ram 10
Ewe 10
Kids 4
Cost of construction ([Link] sft) 650
Cost of equipment ([Link] adult animal) 150
P 62,000
No. of acres 1.5
Concentrate feed :
Adult Ewe (one month before breeding and one month 2 6.75
after kidding i.e. per kidding) kg/month

Ram (two months per breeding season) 2 7.5 kg/month

Kids (for 30 days) 1 3.75 kg/month
 Cost of conc. Feed (Rs./kg) 18
Labour (No.) 10
Labour wages ([Link] month) 180000
Insurance (as percentage of the cost of breeding 750
stock)
Veterinary aid (Rs./adult/year) 8
Water, electricity and other misc. expenses (Rs./adult) 8

C. Income norms :
Sale price of Ram Lamb (Rs./kid) 16000
Sale price of Ewe Lamb (Rs./kid) 20000
Sale of culled Ewe (Rs./Ewe) 16000
Sale price of culled Ram (Rs./Ram) 15000
Sale value of male/female kids (Rs./kid) 950
Income from manure is not assumed as it 120
is used on the own farm
Sale of Gunny bags (Rs./bag) 18
(13.3 bags / tonne)

D. Bank loan
Margin Money 15
Subsidy 50
Interest rate(%) 10
E Repayment norms:
Repayment period (years) 7
Grace Period (years) 1
 Sheep Flock Chart 500:25
[Link]
Years 1 2 3 4 5 6 7 8

Kidding No. I II III IV V VI VII VIII IX VII VIII IX Max

A Opening Stock - Adult Ram 25 25 25 25 25 25 25 25 25 25 25 25 25
Adult ewe Purchased stock 500 480 400 450 380 420 450 380 420 450 380 420 500
Replaced stock 0 0 100 50 120 80 50 120 80 50 120 80
B Births during the year
Male Kids 340 330 340 340 340 340 340 340 340 340 340 340 340
Female Kids 340 330 340 340 340 340 340 340 340 340 340 340 340 680
C Mortality

Adult Ewe (5 %) 20 30 0 20 30 0 20 30 0 20 30 0
Male kids (15 %) 50 50 50 50 50 50 50 50 50 50 50 50
Female kids (15 %) 50 50 50 50 50 50 50 50 50 50 50 50
D Sales during the year
Adult Ram 0 0 0 2 0 0 2 0 0 2 0 0
Adult Ewe 0 50 50 50 50 50 50 50 50 50 50 50
Ram Lamb 0 290 260 290 290 270 290 290 300 330 290 270
Ewe Lamb 0 190 230 170 210 240 170 210 290 250 210 240
E Closing stock at the end of the year

Adult ram 25 25 25 23 25 25 23 25 25 23 25 25
Adult ewe 500 430 450 450 450 450 450 450 450 450 450 450
Ram Lamb transfer 0 0 25 0 0 25 0 0 25 0 0 30
Ewe Lamb transfer 0 100 50 120 80 50 120 80 50 120 80 80
Male kids 290 280 290 290 290 290 290 290 290 290 290 340
Female kids 290 280 290 290 290 290 290 290 290 290 290 340
Total kids 580 560 580 580 580 580 580 580 580 580 580 680
 Project Cost
Sr. Items Specifications Requirement Physical Unit Cost Total (Rs.)
Units No. (Rs./Unit)
Capital Cost
1 Shed [Link]/animal 16 500 500 4,000,000
Ram-16 [Link]./Ram 16 25 500 200,000
[Link]/kid (Thatch roof) 6 350 500 175,000
Max kid born (Fencing) 350 500 175,000
2 Equipment -- 525 150 64800
3 Cost of Animals Ewe 500 25000 12500000
Ram 25 20000 500000
17,614,800
Recurring Cost
4 Insurance Ewe 500 750 375000
Ram 25 750 18750
5 Veterinary aid 525 8 4200
6 Fodder cultivation Per season for two acres & for 3 1.5 62,000 93,000
seasons
7 Supplementary Ewe-6.75 kg/month for 3 months 13500 12 162000

Ram -7.5 kg/month for 3 months 750 10 209375

Kids -3.75 kg/month for one month 31500 10 315000

8 Labour wages 10 180000 1800000

9 Water, electricity and 525 8 24200
other misc. expenses

3,001,525
10 Total Cost 20616325 3295854 17320471
11 Margin Money @15% 2320471
of total cost
12 Government subsidy 5000000

13 Bank loan @85% of 10000000

total cost
 Cash flow & Calculation of financial viability
Sr. No. Particulars Years
I II III IV V VI VII VIII
I Costs
1 Capital Cost 17,614,800
2 Recurring cost
a) Grren fodder cultivation cost 93,000 93,000 93,000 93,000 93,000 93,000 93,000 93,000
b) Feed cost
Rams 2250 2250 2070 2250 2070 2250 2250 2250
EWES 40500 36450 36450 36450 36450 36450 36450 36450
Kids 26100 26100 26100 26100 26100 26100 26100 26100
c) Medicines/Vet. charges 4,200 4,200 4,200 4,200 4,200 4,200 4,200 4,200
d) Insurance 393750 393750 393750 393750 393750 393750 393750 393750
e) Misc.(water/electricity charges) 24200 24200 24200 24200 24200 24200 24200 24200
f) Labour wages 1800000 1800000 1800000 1800000 1800000 1800000 1800000 1800000
Total recurring expenses 2,384,000 2,379,950 2,379,770 2,379,950 2,379,770 2,379,950 2,379,950 2,379,950
Total costs 19,998,800 2,379,950 2,379,770 2,379,950 2,379,770 2,379,950 2,379,950 2,379,950
II Benefits
a) Sale of animals
Sale of adult Ram (Culling) 0 0 30000 0 30000 0 0 30000
Sale of adult EWE (Culling) 0 1600000 800000 1600000 800000 1600000 1600000 800000
Sale of Ram lamb** 0 8800000 4640000 8960000 4640000 9440000 8800000 5280000
Sale of Ewe lamb** 0 8400000 3400000 9000000 3400000 10000000 8400000 5000000
450
b) Sale of gunny bags 174 208 174 208 174 208 174 208
Total income 174 18800208 8870174 19560208 8870174 21040208 18800174 11110208
c) Value of Closing Stock
d) Scrap value of shed and equip.
Total benefits 174 18800208 8870174 19560208 8870174 21040208 18800174 11110208
NET BNEFITS -19,998,626 16,420,258 6,490,404 17,180,258 6,490,404 18,660,258 16,420,224 8,730,258
DF @15% 0.869565217391 0.756143667297 0.6575162324 0.5717532456 0.4971767353 0.4323275959 0.3405920033 0.2597948393
NPV cost at 15% 17,390,260.87 1,799,584.12 1,564,737.40 1,360,744.14 1,183,166.28 1,028,918.06 810,591.94 618,298.73 25,756,301.54
NPV benefits at 15% 151.3043478261 14215658.22306 5832283.3895 11183612.408 4410044.1508 9096262.5421 6403188.9257 2886374.7024 54,027,575.65
V NPW at 15% 28,271,274.11
V BCR at 15% DF 2.10
VII IRR 63.67%
* Excludes the capitalised cost for fodder cultivation for one season, supplementary feed, insurance, veterinary aid, labour wages and Misc. expenses. .
 Repayment Terms
Bank loan 10000000

Interest Rate (%) 10 0.1

Rep period 7 1 year holiday period

Years Income Expenses Gross surplus Loan balance Interest Repayment Loan balance DSCR

Interest Principal

I 174 19998800 -19998626 10000000 1000000 1000000 10000000 -13.9990382

II 18800208 2379950 16420258 10000000 1000000 1000000 1428571 8571429 11.4941806

III 8870174 2379770 6490404 8571429 1000000 1000000 1428571 7142857 4.5432828

IV 19560208 2379950 17180258 7142857 1000000 1000000 1428571 5714286 12.0261806

V 8870174 2379770 6490404 5714286 1000000 1000000 1428571 4285714 4.5432828

VI 21040208 2379950 18660258 4285714 1000000 1000000 1428571 2857143 13.0621806

VII 18800174 2,379,950 16420224 2857143 1000000 1000000 1428571 1428571 11.4941568

VIII 11110208 2,379,950 8730258 1428571 1000000 1000000 1428571 0 0.8730258

70393438 8000000 10000000

18000000

Avgerage DSCR 3.91