India has made considerable progress in broiler production in the last three decades. The broiler production has sky rocketed at an annual growth rate of about 10% and stands at about 2.3 million metric tons of chicken meat (FAO 2005).The population of broiler poultry as per 2004-05 census is 199.73 million.

Today India is the fifth largest producer of broiler meat in the world. Despite this achievement the annual per capita consumption in India is only 1600 grams of poultry meat as against the world average of 5.9 kg of meat.

Recommended per capita consumption of chicken meat by National Institute of Nutrition is 11 Kg.

Owing to the considerable growth in broiler industry, high quality chicks, equipment, vaccines and medicines, technically and professionally competent guidance are available to the farmers. The management practices have improved and disease and mortality incidences are reduced to a great extent.

Many institutions are providing training to entrepreneurs. Increasing assistance from the Central/ State governments and poultry corporations is being given to create infrastructure facilities so that new entrepreneurs are attracted to take up this business. Broiler farming has been given considerable importance in the national policy and has a good scope for further development in the years to come.

There is a growing trend of integration in broiler farming. In the early nineties, contract farming for broilers was introduced and in 1995 it spread all over Tamilnadu. Between 1995 and 2000, it spread to Karnataka. It gathered momentum and spread its wings to Maharashtra, Andhra Pradesh in the years 2001 & 2002 and after that, it gained inroads into West Bengal and Gujarat.

The spread is due to built in strengths in integration system. Integrators will take care of all aspects of production, right from raising of grandparent and parent flocks, production of day old chicks for rearing, manufacturing and supply of concentrate feed, providing veterinary services and wholesale marketing of birds.

Under integration all the previous profit centres of the broiler industry viz. chick selling, feed selling, hatching, medicine supply, transportation have become cost centres for the integrators who work as a single entity and distribute the benefits among the farmer, consumer and the integration company themselves. Under contract farming, poultry farmers invest only for poultry sheds / equipment on their existing land. The Integrator supplies chicks, feed, medicines, provides technical guidance and takes entire production after 5-6 weeks.

The contract farmers are paid growing charges as per agreed rates. This has eliminated the middlemen. Farmer is benefiting from the lesser investment and production cost and also higher productivity which is achieved as a result of integration.However, the farmer may be at a disadvantage if the number of batches supplied in the year by the integrator is less.

For poultry farming schemes with very large outlays detailed project reports are required to be prepared. The items of finance would include construction of broiler sheds and purchase of equipment, cost of one day old chicks, feed, medicine and labour cost for the first cycle.

Cost towards land development, fencing, water and electricity, essential servant’s quarters, godowns, transport vehicles, broiler dressing, processing and cold storage facilities can also be considered for providing loan. Cost of land is usually not considered for loan.

The bank officers can also assist in preparation of the scheme or filling in the prescribed application form. The scheme so formulated should be submitted to the nearest branch of the bank.

The bank will then examine the scheme for technical feasibility and economic viability.

A. Technical feasibility - this would briefly include:
(a) Suitability of climate and potentiality of the area

(b) Technical norms including schedule for replacement of flocks

(c) Infrastructure and other facilities available for supply of inputs, veterinary aid, marketing etc., and training/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 broilers, manure and other miscellaneous items.

(d) Calculation of annual gross surplus (income-expenditure)

(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 requirements etc. are also examined. A field visit to scheme area is undertaken for conducting techno - economic feasibility study for appraisal of the scheme.

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, construction of sheds, purchase of equipment and machinery, recurring cost on purchase of chicks, feeds, medicines, etc. The end use of the loan is verified and constant follow up is done by the bank.

8.1 Outlay :
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.

8.2 Margin Money :
Margin depends on the category of the borrowers and range from 5 to 25%.

8.3 Interest Rate:
Banks are free to decide the interest rates within overall RBI guidelines. However, for working out financial viability and bankability of model project, we have assumed rate of interest as 12% p.a.

8.4 Security:
Security will be as per NABARD / RBI guidelines issued from time to time.

8.5 Repayment of loan :
The loan repayment is determined, on the basis of gross surplus generated in the scheme. Usually the repayment period of loan for broiler farming is 6 to 8 years.

8.6 Insurance :
The birds and other assets (poultry shed, equipment) may be insured. Wherever necessary Risk/Mortality fund may be considered in lieu of poultry insurance.           

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) Borrowers profile

(a) Capability

(b) Experience

(c) Financial soundness

(d) Technical/Other special qualifications

(e) Technical/Managerial Staff and adequacy thereof

2. TECHNICAL ASPECTS:
a) Location, Land and Land Development:
i) Location details of the project

ii) Total area of land and it's cost

iii) Site map

iv) Particulars of land development, fencing, gates etc.

b) Civil Structures:
Detailed cost estimates along with measurements of various civil structures

- Broiler Sheds

- Store room

- Dressing room

- Office room

- Quarters for staff

- Others

c) Equipment/Plant and machinery:
(i) Feeders

(ii) Waterers

(iii) Generator

(iv) Feed grinder and mixer

(v) Debeaker

(vi) Vaccinator

(vii) Fridge/Deep Freezer

(viii) Dressing equipment if necessary

(ix) Truck/van/jeep (Price quotations for the above equipment)

d) Housing:
i) Type of housing - Deep Litter/Slat/Environment controlled)

ii) Area required (sft./bird)

e) Birds:
i) Proposed strain

ii) No. of birds to be purchased

iii) Source of purchase

iv) Cost of birds (Rs. per bird)

v) Vaccination of purchased birds

vi) Proposed programme of replacement

f) Production parameters:
i) Average body weight (kg.)

ii) Feed efficiency (kg. of feed/ kg body weight gain)

iii) Mortality (%)

g) Flock Projection Chart:
h) Feeding:
i) Source of availability - Purchased or own feed manufacturing

ii) If purchased

a) Place of purchase

b) Brand

c) Cost (Rs./kg)

- Starter

- Finisher

iii) If manufactured on farm

a) Capacity of feed grinder and mixer

b) Source of raw materials

c) Feed formula

d) Cost of production (Rs./kg)

- Starter

- Finisher

iv) Requirement (kg/bird)

- Starter

- Finisher

i) Veterinary aid:
i) Source

ii) Location

iii) Distance (km.)

iv) Availability of labour and other staff

v) Type of facilities available

vi) If own arrangements are made

a) Employed a veterinary doctor/stock man /consultant

b) Periodicity of visit

c) Amount paid (Rs.)

vii) Expenditure per bird per cycle (Rs.)

j) Electricity
i) Source SEB / Other

ii) Approval from electricity board

iii) Connected load

iv) Problems of power failure

v) Arrangements for generator

k) Water
i) Source

ii) Quality of water

iii) Availability of sufficient quantity for drinking and cleaning

iv) If investment has to be made, type of structure, design and cost

l) Marketing of broilers

i) Source of sale

ii) Place of disposal

iii) Distance (km)

iv) Basis of payment (number or weight)

v) Price realised - (Rs. per kg live weight or live bird)

vi) Periodicity of payment

m) Marketing of other products
i) Manure - Qty./bird, price per unit (Rs./Q)

ii) Empty gunny bags - Number and cost/bag

n) Beneficiary's experience
o) Comments on technical feasibility
p) Government restrictions, if any

3. FINANCIAL ASPECTS :
i) Project Cost

Sr. No.	Item	Physical Unit and Specification	Cost (Rs.)
1	Capital Costs
2	Total Capital Costs(A)
3	Recurring Costs
4	Total Recurring Costs (B)
5	Total Project Cost (A+B)

ii) Down payment/margin/subsidy (Indicate source & extent of subsidy)

iii) Financial viability ( comment on the cash flow projection on a farm model / unit and enclose the same ) 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 :

a) Rate of interest

b) Grace period

c) Repayment period

d) Nature of Security

e) Availability of Government guarantee wherever necessary

4. INFRASTRUCTURE 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 : Type of policy, Periodicity, Rate of premium