Contract Broiler Farming: Business Plan Considerations
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Time to read:
10 minutes
Suitable for:
Any country, but framed in Karnataka, India
Ideal for:
Start-up contract poultry farmers, or beginner poultry farmers who want to learn about the contract poultry business model.
Poultry business plan problem #1:
- India’s broiler farming sector is a relatively giant among agri-sector and only growing – fast.
- India is the 3rd largest global producer of broiler meat (behind only China and the US for volume).
- India’s contract broiler farming sector attracts colossal manpower. It supports over 5 million labourers with employment.
By far among all the poultry farming business models: ‘contract poultry’ farming is the most popular with over 90% of corporate farms adopting this method.
Meet Vikram
Our poultry farming beginner is Vikram Chauhan from Shimoga district of Karnataka, India. Vikram’s a 1st time poultry farm entrepreneur and is at the all important business planning stage. He’s as yet undecided whether to raise poultry independently or to join a contract farming collective.
What he needs
Whilst he’s built some figures to support his understanding of the financial projections of independent poultry farming, he’s attempting to ‘see into’ the budgetary detail of the contract poultry farming model.
How you can help
As a close professional contact of Vikram’s, he’s asked you to help him assess the profitability and nuances of the contract poultry farming model. So, duly, you are expected to give Vikram recommendations and guide him through an analysis that helps him make the most informed and profitable decision.
Topics covered in this exercise
- Capital investment
- Relative variable and fixed costs (farmer vs. company)
- Profits (farmer vs. company)
- Breakdown of returns
- Company revenue breakdown
- KPIs
Economic data
Your independent research led you to the following data tables from the Indian Journal of Poultry Science:
Capital expenses of farmers
(Fig. 1)
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