Case Exercise on Layer Unit (2000 birds)

1. A farmer submitted proposal for setting up of a Layer unit with

2000 birds capacity under Cage 1:2 system of rearing i.e., 1000
layers per batch. The farmer owns 5 acres of land out of which
he wants to set up the Layer unit in one acre of his land.

2. The farmer proposes to construct one brooder cum grower shed

and two layer shed of of 1000 sq ft each (Total 1000 sq ft for
grower shed and 2000 sq ft for layer sheds @ of 1 sq ft per
bird). The cost of construction is Rs. 115/- per sq ft for Brooder-
cum-Grower shed and Rs.140/- per sq ft for layer shed.

3. Construction period is 3 months.

4. Cost of equipment to be purchased for rearing of birds is Rs.24/-

per bird for brooder cum grower house and cost of cages is Rs.
60/- per layer bird.

5. Cost of DOCs to be purchased is Rs.25/- per bird. Mortality is

5% at brooder cum grower stage and 8% at layer stage and
hence the hatchery will supply 5% of free DOCs.

6. The rearing period is 72 weeks ie., Brooder –cum – growing

stage 20 weeks and laying period 52 weeks.

7. Insurance premium is Rs. 4.50 per bird. Insurance premium for

sheds and equipments is Rs. 5.05 per Rs.1000/-

8. Feed requirement is 7.5 kg per bird in the brooding cum growing

stage and 39 kg per bird in the laying stage. The cost of
Chick/grower mash is Rs. 17/- per kg and Layer mash is Rs.
16/- per kg.

9. Cost of overheads like cost of power, medicines, vaccines, litter

etc., is Rs. 12/- per bird in the brooding cum growing stage and
Rs. 30/- per bird in the laying stage.

10. The egg production is 310 eggs per bird during the entire laying
period. The sale price of egg is Rs.2.75 /-.

11. Income from sale of culled birds is Rs. 75/- per bird.

12. Income from sale of gunny bags is Rs.12/- per bag ( @ 13.3
bags per tonne of feed).
 13. The farmer also gets income from sale of poultry litter as
manure @ Rs. 2.50 per bird during the brooding cum growing
stage and Rs. 16/- per bird during the laying stage.

14. Depreciation on sheds is 5% and on equipment 10%.

15. Recurring cost for the first batch upto 24 weeks to be

capitalized.
16. Margin money is 25% ; Interest rate (%) is 13.5%
17. Repayment period is 8 years with one year grace period
18. Flock projection schedule for working out the cash flow under
1:2 system of rearing with 2 batches of 1000 layers each may
be prepared with the following parameters.

Rearing period (weeks) 72

Brooding cum growing period (weeks) 20
Laying period (weeks) 52
Rest period (weeks)
Brooder cum grower house 8
layer house 4

Find out the financial viability (NPV & Benefit Cost Ratio at 15% and IRR)
of the layer unit keeping the economic life of the unit is 8 years.

Developed by College of Agricultural Banking, RBI, Pune