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You are Here :: Agri Business :Diary Farming :Model Project Cost Estimation

 

Model Unit Cost and Economics of a 10 Buffalo Unit



A. Project Cost
A. Project Cost Rs.
Cost of milch animals including transportation cost 330000
Cost of construction of shed for adult animals 60000
Cost of construction of shed for calves 20000
Cost of chaff cutter 50000
Cost of equipment 10000
Capital cost 470000
Cost of concentrate feed for first batch for first month 4800
Cost of fodder cultivation in 2 acres 9000
Insurance of first batch of milch animals 16000
Recurring cost 29800
Total cost 499800
or say 500000
Margin (15%) 75000
Bank Loan 425000

B. Techno economic parameters
Type of Animal Graded Murrah Buffalo
No. of Animals 10
Cost of Animal (Rs./animal) 32000
Transportation Cost/Animal 1000
Average Milk Yield (litre/day) 8
Floor space (sqft) per adult animal 60
Floor space (sqft) per calf 20
Cost of construction per sqft (Rs.) 100
Cost of chaff cutter (power operated) (Rs.) 50000
Cost of equipment per animal (Rs.) 1000
Cost of fodder cultivation (Rs./acre/season) 4500
Insurance premium (% per annum) 5
Veterinary aid/animal/ year (Rs.) 250
Cost of concentrate feed (Rs./kg) 8
Cost of dry fodder (Rs./kg) 1.50
No. of labourers 1
Salary of labourer per month (Rs.) 3000
Cost of electricity and water/animal/year (Rs.) 150
Margin (%) 15
Rate of interest (%) 12
Repayment period (years) 7
Selling price of milk/litre (Rs./kg) 16.50
Sale price of gunny bags (Rs.per bag) 10
Lactation days 270
Dry days 150

Freshly calved animals in 1st or 2nd lactation are purchased in two batches of five animals each at an interval of 5 to 6 months.

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.

C. Calculation of BCR and IRR
1 2 3 4 5 6 7
Capital Costs 470000
Recurring Cost 162740 185140 185140 180640 180080 185140 182810
Total Costs 632740 185140 185140 180640 180080 185140 182810
Benefit 278910 322180 322180 295660 292350 322100 322050
Net Benefit -353830 137040 137040 115020 112270 136960 139240
PW Costs @ 15% 1153513
PW Benefits @ 15% 1272701
NPW 119187.8
B.C. Ratio 1.10 : 1
I.R.R. (%) 28.66

D. Repayment schedule
Year Loan Outstanding Gross Surplus Interest Principal Total Repayment Surplus
1 425000 145970 51000 51200 102200 43770
2 373800 137040 44856 51044 95900 41140
3 322756 137040 38731 57169 95900 41140
4 265587 115020 31870 48630 80500 34520
5 216957 112270 26035 52565 78600 33670
6 164392 136960 19727 76173 95900 41060
7 88219 139240 10586 88219 98805 40435