Project Report for

Establishment of
Breed Multiplication Farm
with
200 Ongole Cows

By
Dr. Vishnu Vardhan Reddy Pulimi
M.V.Sc (Animal Nutrition)
Veterinary Assistant Surgeon,
Animal Husbandry Department
Andhra Pradesh
Contact No: +91 9177568030
Email: [email protected]
 ACKNOWLEDGEMENT

I have immense pleasure in presenting this Project on Establishment of Breed

Multiplication Farm with 200 Ongole Cows. The Subject is an interesting one. It

gave me an opportunity to have a detailed study on the subject and showed how

things work in the practical world. I came to understand and analyze the importance

and the role of Indian Cattle breeds especially Ongole cattle and establishing a Breed

Multiplication Farm to produce disease free Ongole Heifers.

I had a great time working on the project and I have provided information to

the fullest of our knowledge and findings.

I wish all the best to Entrepreneurs who want to explore and Establish Breed

Multiplication Farm.

Regards,

Dr. Vishnu Vardhan Reddy Pulimi

M.V.Sc (Animal Nutrition)
 PURPOSE OF THE DOCUMENT

The objective of this pre-feasibility study is primarily to facilitate information

regarding the Ongole cattle breed and also to provide a brief idea to the potential

entrepreneurs who wants to establish a Breed Multiplication Farm. The document

may form the basis of an important investment decision and in order to serve this

objective, the document covers various aspects of Farm startup, production, finance

and business management.

The purpose and scope of this information memorandum is to introduce the

subject matter and provide a general idea and information on the said area. All the

material included in this document is based on data/information collected from

various sources and is based on certain assumptions.

Although, due care and diligence has been taken to compile this document,

the contained information may vary due to any change in any of the Concerned

factors, and the actual results may differ substantially from the presented

information. The prospective user of this memorandum is encouraged to carry out

additional diligence and gather any information he/she feels necessary for making

an informed decision.
 DISCLAIMER
This project report has been prepared by “Dr. Vishnu Vardhan Reddy Pulimi” is for

information purposes only. This report does not constitute an offer, invitation or inducement to

invest in any sector or industry. Neither the information contained in this project report nor any

further information made available with the subject matter contained herein will form the basis of

any contract. Any recommendations contained in this document must not be relied upon as

investment advice based on the recipient's personal circumstances. In the event that further

clarification is required on the words or phrases used in this material, the recipient is strongly

recommended to seek independent legal or financial advice.

The material in this project report is general information intended for recipients who

understand the risks and opportunities associated with making investment in India specifically in

Livestock sector.

It does not take account of whether an investment, course of action, or associated risks are

suitable for the recipient. This report does not purport to be comprehensive or to contain all the

information on which a prospective investor can make an investment decision. The information

contained herein is based on publicly available information and sources, which i believe to be

reliable, but i do not represent it as accurate or complete. The recipient of this report must make

his own investigation and assessment of the information presented herein.

No representation, warranty or undertaking, express or implied, is or will be made or given

and no responsibility or liability is or will be accepted by us, in relation to the accuracy or

completeness of this project report or any other written or oral information made available in

connection with the information presented herein. Any responsibility or liability for any such

information is expressly disclaimed.

 Profile of the Entrepreneur

Name :

Date of Birth :

Father’s Name :

Age :

Sex :

Nationality :

PAN :

Adhar Card No :

Languages Known :

Permanent Address :

Address for Communication :

Academic Qualifications :

Technical Qualifications :
 Establishment of Breed Multiplication Farm
1. Introduction:
India, one of the twelve mega biodiversity countries in the world, is home to large
diversified cattle genetic resources, having 190.9 M cattle and so far 43 registered native cattle
breeds. Indigenous breeds are well adapted to our agro-climatic conditions and are resistant to
many tropical diseases and can survive and produce milk on poor feed and fodder resources.
Some of these breeds are well known for their high milk and fat production. However, the
production potential of these animals has deteriorated over a period of time due to lack of
selection. Further, Draught breeds utility has decreased because of mechanization in
agriculture. There is decrease of 4.10% in cattle population and 3.14% in cattle genetic
resources of India as compared to the quinquennial livestock census. The exotic / crossbred
population has been increased by 20.18% during the period of last census while population of
indigenous cattle has been decreased by 8.94% during the same duration. The reasons for
depletion of native breeds includes crossbreeding with exotic breeds, economically less viable,
losing utility, reduction in herd size and the large scale mechanization of agricultural operation.
The high producing exotic breeds do not have the above characteristics and are very difficult
to manage in tropical Indian scenario. In addition, existence of superior indigenous breeds can
provide valuable research inputs for developing superior Indigenous breeds. The native breeds
need to be conserved for genetic insurance in future, scientific study, as a part of our ecosystem,
cultural and ethical requirements and for energy sources in future. Hence, indigenous breeds
should be conserved and improved.
2. Importance of Indigenous Cattle Breeds
The different indigenous breeds of farm animals have adapted to the harsh climatic
conditions with low management inputs in terms of feeds, fodder and health care, capable to
convert low quality feeds and fodder more efficiently into animal products and better adapted
to withstand tropical diseases. These breeds are now subject to fast genetic degradation and
dilution because of unplanned breeding and introduction of exotic germplasm through cross
breeding. As a consequence some indigenous breeds are becoming endangered and there is
depletion of good native germplasm which was having unique quality of disease resistance
and heat tolerance. The dilution of a breed is in terms of purity of breed. It is a decline in the
availability of pure bred animals conforming to the model attributes of the breed and is very
common in developing nations. Conservation of genetic diversity is essential to the long term
survival of any species, particularly in the light of changing environmental conditions.

The indiscriminate crossbreeding between exotic breeds and indigenous animals has been
adjudged as major cause for the losses, as well as the risk to existing breeds. It is believed
that continuous import of highly productive animals from developed countries is the most
significant threat to domestic animal diversity in the developing world. Therefore,
conservation of indigenous animal resources has been projected as a suitable method for
slowing down the loss in livestock breed diversity through extinction. Animals which belong
to descript (identified)/ non-descript (non-identified) breeds of indigenous origin are
considered as indigenous animals.
Native cattle breeds in India are broadly classified into Milch, Draught and Dual purpose
breed depending upon their utility either in dairying or in agriculture work. The breeds which
can give higher milk are classified under “Milch” breeds. The breeds which are using for
agriculture and work purpose are classified as “Draught” purpose breeds. The breeds which
can be used for both milk and work purpose are classified as “Dual” purpose breeds. In
below mentioned table we can find different Indian cattle breeds as per their classification.

Milch Purpose Breeds Dual Purpose Breeds Draught Purpose Breeds

Sahiwal Ongole Amritmahal
Red Sindhi Deoni Hallikar
Gir Kankrej Khillari
Tharparkar Hariyana Kangayam
Rathi Mewati Bargur
Dangi Malvi
Red Khandari Kherigarh
Nimari Kenkatha
Siri Nagori
Krishna Valley Bachaur
Ponwar
Gaolao

Among the above given breeds “Ongole” was originated in Andhra Pradesh and it is
considering as “Pride of Andhra Pradesh”. Apart from the Ongole cattle breed we have
“Punganur” in our state which can be considered as one of the smallest cattle breed in India.
3. Objective of the Project
At present dairy farmers are facing difficulties in procuring disease free high yielding
Ongole cattle. Most of them are depending on middlemen and dairy farmers. The purchasing
by dairy farmers are under exploitation in quality of animal and price. So this project is taken
up to provide high yielding Ongole cows within Prakasham district and state to the Dairy
Farmers at reasonable price at farmers level by using sexed semen technology.
It is also proposed to spread the awareness about scientific management practices including
animal nutrition, disease prevention, etc. Now a days people are getting educated and attaining
knowledge regarding the A1 and A2 milk and the importance of Native breeds. So, Milk can
be sold or can be used to make milk based products like curd, ghee etc. Cow dung can be used
to make manure to be used in the farm for enhancement of soil fertility or it can be used as a
source of fuel. Establishing Breed Multiplication Farm can be a profitable venture if input
sources are properly used and the farm is managed properly. Marketing of milk is not a problem
as there is always a high demand for milk, even farmers can sell milk at farm.
The proposal is for Establishment of Ongole Cattle Breed Development Farm to produce
genetically elite Ongole calves and heifers to meet local and state wide requirement along with
selling of A2 milk. The total project cost of Rs 400 lakhs and party has sought term loan of Rs
160.00 lakhs, margin Rs.40.00 lakhs and subsid Rs.200.00 Lakhs .
4. Ongole Cattle Breed
The name of the breed ’Ongole’ is derived from the Ongole taluk of Guntur district of
Andhra Pradesh. This breed is also known by the name of ‘Nellore’. The breed has contributed to
the development of some of the exotic breeds like ’American Bradman’ and ’Santa Getrudis’ etc.
The Ongole breed is used for milk and draft in India and for beef production in Latin American
countries. The breeding tract comprises all among the coast from Nellore to Vijayanagaram, and
Chittoor, Kurnool, Kadapa Anantapur of Andhra Pradesh. Nalgonda, Mahbubnagar and
Khammam districts of Telangana.

The Ongole cattle are large sized animals. The bulls weigh as much as 800 kg and cows
from 350 to 420 kg. The popular color is white. The males have dash gray markings on the head
and neck. The average body length, height at withers and chest girth in cows were 140 cm, 144
cm and 165 cm, respectively. The cows are good milkers. The average age at first calving is
1300 days. The average age at first service in males is 31 months. Cows produce about 1318 kg
of milk in 275 days.

4.1 Breed Development:

This breed has been developed in the deltas of the river Penna, Krishna and
Godavari, on the east coast of Peninsular India over a few centuries under the selection and
patronage of farmers in these areas. The best draft type specimensof this breed were developed
south of the river Krishna and north of river Penna covering the districts of Guntur,
Prakasam and Nellore. The Nellore district collector started the Ongole cattle show in 1858
to encourage the breeding of good quality animals in the breeding tract. This event was
conducted annually till 1871. The shows were a great encouragement for small and big breeders to
produce better stock. In addition to these shows, in 1867, the Government laid down a
principal that out of its uncultivated land, each village should reserve for common grazing, an
area equivalent to its 30% of land under cultivation, thereby providing additional pasture land
for the Ongole cattle. A key village scheme was launched by the State Government at two
places in the main Ongole breeding zone in 1952 and at two more places in 1956. In the
area covered by the scheme all scrub bulls were arrested. To provide an additional boost to
the breeding operation, bulls were stationed at several centers under various schemes such as
Premium scheme, District board scheme and free Bull distribution scheme. The period
between 1958 and 1980 saw the emergence of crossbreeding and even the Ongole breed
was not spared. Development of the Ongole breed suffered further with the introduction of Land
Ceiling Act and removing of restriction from the pasture land. After almost half a century, the
Ongole cattle show was revived in March 1981. A seminar was also held to discuss the
reasons for the said state of Ongole breed in their home land. An important outcome of this
seminar was the formation and registration of the Indian Ongole Cattle Breeders Association.
The Agricultural College Dairy, Coimbatore maintained Ongole cows till 1924-25. Ongole
cows were maintained till 1933-34 at the Hosur farm, which was established in 1919. Ongole
cows were also kept at the Chintaladevi farm, which was started in 1918. The objectives of
this farm were to improve the milk yield, reduce inter calving period and attain early
maturity in the Ongole as well as produce large number of pedigree bulls for distribution in
villages of the breeding area. The cows were shifted to the Lam farm in 1928. The Law farm,
which was established in 1926 at Ongole, initially for some time and again during 1964-75.
The Mahanandi farm was started with Ongole cows in 1954. Ongole cattle breeding farm was
established at Ramatheertham in 1980. A composite livestock farm with Ongole cows and
Nellore sheep was started at Chintaladevi in 1986 by the Animal Husbandry Department.
An Ongole cattle germplasm center was established by the A.P. Agricultural University at the
Lam farm in 1986. Ongole cattle were also maintained at the Visakhapatnam and Kakinada
farms earlier.
An Ongole Cattle Breeders Association was formed on 27 August 1951. There
was a Central Herd Registration Scheme functioning at Ongole since 1978 with the
objectives of survey of breeding tract, location of milk recording units, registration of
animals, milk recording and formation of breeders association. With a view to stent the
decline in population of Ongole breed, the Andhra Pradesh Agricultural University has
launched a Network Project on Genetic Improvement through Associated Herd Progeny
Testing in Ongole breed with the co-operation of State Animal Husbandry Department and
the financial support from the Indian Council of Agricultural Research. Ari Ongole cattle
germplasm unit was started at the Lam farm with a bull rearing, semen freezing and data
processing centers. The Ongole cattle breeding farms of the Animal Husbandry
Department at Ramatheertham in Prakasam district and Chitaladevi in Nellore district
and University farm at Mahanandi in Kumool district became associated herds. The
University farm associated herds and a farmers field assisted herd were added at the Lam
Farm in 1994.
Ongole cattle are our mute ambassadors to several countries. South American
countries keep pure Ongole cattle. The United States of America imported Ongole cattle
but mixed it with other Indian breeds to develop Brahman cattle. South Americas
developed Indo-Brazil by mixing the Ongole with the Gir and the Kankrej. The last
shipment of Nellore bulls into Jamaica was in 1921. Until mid-1920s, most of the Zebra
cattle in the USA were of Nellore type. Brazil imported Ongole cattle first time in 1895. In
1906, a large contingent of 200 Ongole cows and bulls were brought to Umeraba in Brazil.
During 1961-62 Brazilians purchased 107 Ongole cows and a few bulls. The Nellore or Ongole
breed’s hardiness, disease resistance and its capacity to thrive on scanty and dry fodder
have been quite successfully exploited for improving and upgrading the local stock of
European origin. Ongole cattle have been imported by the USA for beef, by Brazil for beef
and milk, by Sri Lanka, Fiji and Jamaica for draught; by Australia for heat tolerance and
beef and by Switzerland for disease resistance. Ongole cattle have been imported by many
 other countries like Argentina, Paraguay, Mexico, Columbia, Mauritius, Indonesia,
Philippines and Malaysia.
4.2 Physical Characteristics of Ongole Breed:
The Ongole cattle are large sized animals. Animals of the breed have glossy white
coat colour called “Padakateeru”. The bulls weigh as much as 800 kg and cows from 350
to 420 kg. The popular coat color is white. A red or red and white animal of typical
conformation is occasionally seen. The male has dark gray markings on the head, neck and
hump and sometimes black points on the knees and on the pasterns of both the fore and hind
legs. The skin is of medium thickness, mellow and elastic and often shows black mottled
markings. Animals of the breed have long bodies and short necks, limbs are long and
muscular. Face is short with greater breadth of forehead and muzzle. The forehead is broad
between the eyes and slightly prominent. Eyes are large, prominent and heavy looking, elliptical

in shape with black eyelashes and a ring of black skin about 1/4th” to 1/2” wide around the eyes.
Ears are moderately long, measuring on an average for 9” to 12”, and slightly in drooping
position Horns are short md stumpy, 10 to 15 cm long in length. Horns are growing outwards
and backwards, thick at the base and firm without cracks. In some animals the horns are
loose, probably due to the under grown horn core. The hump in the males is well developed
and erect and filled up on both sides and not concave. They have white eyelashes, a flesh
colored muzzle, light colored hooves, dark gray marking on the hindquarters and dark
mottle appearance on the body. Tail is long with black switch and touching to the ground.
Animals of the breed have a majestic gait. A fair depth and width of chest, compact their
powers of draught are great, and when well-bred they draw much heavier loads than most
of the other breeds.
The points of disqualifications are : red colour and red patches on body, white
switch of the tail, white eye dashes, white preputial hair, partly or fully flesh colored
muzzle, light colored hooves, dark mottled spots and albino patches on body, black
markings on find quarters, long neck in mole, long drooping ears, raised poll, presence of
grooves below inner canthes to bridge of nose, biconcave hump, leafy hooves floating or
uneven ribs on either side, short tail with switch ending above the hock joint, straight hock,
supernumerary teats, rubbing hooves while walking, single testis (cryptochid), winged
shoulders, switching hind limbs at hip joints and loose horns.
 Farmers identify the Ongole breed with 3 lengths (legs, shoulders and back), 7
shorts ( muzzle, ears, neck, dewlap, flank, sheath and toil) and 9 blacks (muzzle, eyes, tip
of ears, knees, fetlocks, sheath, switch of tail, anal region and tips of testes).
4.3 Breeding tract of Ongole Cattle:
The breeding tract extends between rivers Krishna on Northern side, Penna river
on Southern side, Nallamala range forest on Western side arid Coromandal coast on Eastern
side. True animals of this breed are seen in exclusively in Prakasam district particularly in
Parchuru, lnkollu, Marturu, Kandukur, Ulvapadu & Addanki mandals of Prakasam district
along with Tenali, Bellamkonda, Sattenapalli, Vinukonda and Cherukupalli mandals of
Guntur district. So, In this regard we are proposing to establish the Ongole Breed
Multiplication Farm in its natural Breeding tract.
5. Application of Advanced Technology Like IVF and Sexed Semen:
5.1 In-vitro Fertilization (IVF) Technology:
Briefly, IVF technology refers to production embryos in laboratory and inserting
them into donor cows. In vitro embryo production, also referred to as in vitro fertilization
(IVF), is the process of creating embryos by fertilizing mature oocytes with sperm outside
of the uterus i.e. in a dish. Oocytes are collected from anaesthetized donors by ultrasound-
guided follicular aspiration (ovum pick-up – OPU). The donor oocytes are then matured in
an incubator for 21-24 hours before being fertilized via the addition of sperm. The
inseminated oocytes are then cultured further in an incubator for up to seven days, at which
point the resulting viable embryos are transferred into recipients or frozen for future use.
Additionally, embryos can be biopsied to determine the genetic make-up and/ or sex of
each embryo.
With this technology we get more number of genetically superior heifer in less time
and we can use this technology to produce male or female calves as per our desire. Though
scientifically IVF is a well proven technology it is very costly procedure. So, its economic
success rate is doubtful.
5.2 Sexed Semen Technology:
Sexed semen is specially processed semen of bulls from which ‘Y’ chromosomes
in sperm cells which lead to the birth of a male calf are either removed through a ‘sorting’
process or killed. Semen which has only ‘X’ chromosomes can ensure that a female calf is
born.
 To explain in short using this technology we can get female calf surely by 90%
instead of 50% as in conventional A.I technology. The advantage of using sexed semen is
we get more no of female calves. Further to adapt this technology we don’t required highly
qualified technicians as in case of IVF. So, we are proposing to adapt this sexed semen
technology to improve the breed.
6. Scope for Marketing of Milk from the Farm:
India is endowed with the largest livestock population in the world. It accounts for about
57 per cent of the world’s buffalo population and 15 per cent of the cattle population. The value
of output of milk is Rs. 6,14,387 crore in 2016-17. India’s milk production increased from
165.40 MMT in 2016-17 to 176.35 MMT in 2017-18 and planning to produce 240 MMT by
2023-24 with growth rate of around 6% per annum. The per capita availability of milk in India
during 2017-18 was 375 gm/day and by 2023-24, it is estimated to increase to 592 gm/day with
around 10% increase per annum. To achieve this demand annual growth rate in milk production
has to be increased around 4% additionally per annum. Thus, there is a tremendous
scope/potential for increasing the milk production through profitable dairy farming.
Central and State Governments are giving considerable financial assistance for creating
infrastructure facilities for milk production and processing. So, we can get extra income by
selling the pure indigenous cattle milk as A2 milk at very affordable price.
6. The Main Costs in Farming are:
6.1 Capital cost: For purchase of animals, construction of Shed & purchase of machinery,
cans etc. This cost occurs only once & is depreciable over a Period of time totally.
6.2 Administrative Costs: includes appointment of a Farm manager, Supervisor, Skilled &
unskilled labours depending upon the requirements as well as the size of the farm. This is a
fixed cost for a certain period.
6.3 Recurring Cost: includes the Feeding & Management along with Vaccination, Insurance,
treatment & other miscellaneous costs. This is required daily & is liable to fluctuate at all times.
It will be essential to control these costs which will have a direct bearing on the production of
milk as well as Reproduction (birth of next calf). At the same time balancing of feed will also
determine the reduction of the Inter calving period which has a bearing on total profitability.
7. SWOT Analysis:
A SWOT analysis can help in analyzing these factors, which can play important role in
making the decision. This particular project report is regarding to “Establishment of Ongole
Cattle Breed Multiplication Farm” which comes under “Livestock and Agriculture” sector.
Before making the decision, one should carefully analyze the associated risk factors & must
consider following critical aspects, which form the basis of any investment decision.
7.1 Strengths:
• Readily available Farmland.
• As we are proposing the project in Ongole breed native tract we can get genetically
superior animals to start the project easily and at attractive price.
• Readily available veterinary sources.
• Connectivity by road to near towns.
• Entrepreneur knowledge regarding the cattle management and farming.
• As the project proposing area is located in high altitude place we can eliminate many
climatic disadvantages.
• As project proposed area is well nourished with water source all over the year we can
get fresh green fodder all over the year.
• As the entrepreneur has good knowledge in business management he can market the
milk more effectively.
• Project proposing area is rural area so that we can have the good labor resources.
7.2 Weaknesses:
• High Establishment costs.
• Continuously increasing cost of concentrate feed.
• No or low application of research work and pedigree record keeping.
• Procuring large no of genetically high potential animals at a time may leads to
compromise in animal quality.
7.3 Opportunities:
• As it is the native tract there is high demand for Ongole heifers.
• Milk and other dairy products needs are much higher than supply.
• Continuously increasing health concern among the public to use Native cattle breed milk.
• Vast range of area of operation, more needs and scope of development.
• Value added dairy products are in demand.
 7.4 Threats:
• High risks of diseases in livestock.
• Imbalance between prices of inputs & outputs.
• Rising trend of cost of production with higher rate of interest as compared to profit ratio.
8. Risk Analysis
Some of the important challenges faced by Breed Multiplication Farms may be identified as
follows:
• Competition with local farmers.
• Quality consciousness and standardization of breed
• Security/ guarantee for the breed
• Fast changing Technology
• Technological collaboration
• Liberalization in policy and action
• Health/ Hygiene
• Emphasis on self- sustenance of supporting/ promotional organization leading to better
services from them.
Some important issues of the Breed Multiplication Farm:
Breeding of animals and getting expected good quality heifers along with milk yield is a
biological phenomenon, which depends upon various factors. Farm management besides good
planning requires hardworking, reliable and alert manager. In India, usually persons from the
family take the responsibility. Inadequate management of feeding heard health and lack of
quality control in various stage of production can cause major loss affecting the profitability
of the entire venture.
Key Challenges:
1. There is an increasing pressure on the land resources for cultivation of food crops and
fodder crops are not preferred.
2. Lack of good quality animal feed
3. Lack of animal health care facilities.
4. Lack of breeding and good quality artificial insemination facilities.
5. High production costs
6. Lack of financial support.
 Solutions & Guideline:
1.Every year there should be a progressive aim for breeding (including number of animals
to be maintained) and production.
2.Visiting dairy farms that run on commercial basis and have a discussion with experienced
farm owners. We need not have to rely much on others experience, analyze every event
logically and if needed consult with local Veterinarians for more information.
3. Plant to manage the farm on our own, look for opportunities to work for an existing farm
for a minimum period of six months.
4. Develop interest and study feed and fodder's market in your region, its difficulties in
relation to seasons.
5. Manage a good team of laborers. You need to choose hardworking reliable persons
preferably with some experience. You can also train them for specific jobs.
6. Visit the cattle market occasionally. Observe animals on sale and talk with persons
engaged with purchasing of animals.
7. Read magazines on Dairy Industry and keep yourself informed.
9. Project Profile
The proposed pre-feasibility is for establishment of breed multiplication farm for Ongole
cattle with improved genetic potential through state of the art farm management facilities,
efficient and effective utilization of dairy production and deployment of technologically
advance infrastructure. The project requires a unique mix of technology and herd composition
that will make it possible for investor to achieve economies of scales and attain high rate of
return on investment.
10. Technical Details of the Project
10.1 Location: The unit will be located 30 kms from Ongole City

10.2 Water Availability: The project proposing area is well nourished with ground water. So,
entrepreneur is planning to establish another borewell with overhead water tank for farm
purpose.

10.3 Power Availability: Power is available at the site. The power is used for agriculture
purposes and it is reported by the part that separate power connection will be obtained
for dairy unit.

10.4 Feed Arrangement:

10.4.1 Green fodder: As per standard norms, 1 acre of green fodder is required for every
10 animals. Party has 10 acers of land at present and planning to obtain another 15
acres of land which might be sufficient for 200 cattle. The entrepreneur is planning
to procure crops like Hybrid Napier.

10.4.2 Dry fodder: Dry fodder requirement will be procured from nearby villages; the
same will be brought to the farm, rolled & stored (Stalked).

10.4.3 Concentrates: The promoter is proposing to purchase the concentrates from

Ongole or Any other local Manufacturer.
10.5 Manpower: The applicant will take care of procurement & marketing aspects of the dairy
unit. Veterinary Doctor from nearby Veterinary Hospital will be visiting the farm on
frequent intervals for general checkup and technical assistance apart from veterinary
assistants available on the farm. Other farm workers hired locally and from Bihar for
managing day to day operations.

10.6 Purchase of Animals: Pure Ongole Cows of 2nd lactation will be procured from native
breeding tract. Animals will be selected on the basis of the dams performance (breeding
value, lactation yield & milk fat %) and sires‟ information. CHRS units will help the
entrepreneur in procurement of animals.

10.7 Marketing arrangement: The milk produced in the unit is proposed to be sold to local
consumers located in towns like Ongole and Addanki. As informed, the milk will be sold
immediately after milking and the firm is not undertaking any value addition of milk at
this stage, hence, the need for BMC (Bulk Milk Cooler) does not arise.
11. Economic Viability
Overview of the Economics

S.No Parameter value

Details regarding the Animals
1 No of Animals 200
2 Cost of each animal 100000
3 Rate of insurance/animal/anum in % 5%
4 Animals in Batch 1 100
5 Animals in Batch 2 100
Production and Technical Assumptions
1 Average body weight of milch animal in kg 400
2 Average body weight of Heifer in kg 300
3 Average body weight of Calf in kg 100
4 Lactation days/Animal 300
5 Dry days/Animals 65
6 Average Milk Yield/Animal/Day 6
7 Average inter calving period in months 12
8 Milk:Dry animal ratio 7:3
9 Female to Male Calf Ratio in Sexed Semen 90:10
10 Milk price/liter 65
11 Manure production in kg/day/animal 10
12 Price of Manure per kg 2
13 Sale price of male calf 40000
14 Sale price of female calf 40000
15 Sale price of large milch animal 60000
16 Mortality rate of calves % 5
17 Sale price of Heifers 60000
18 Mortality of Heifers % 5
19 Mortality rate of large animals % 5
20 Replacing rate of large animals % 5
21 Conception rate over total animals/annum (%) 70
Feeding Details of the animals
1 Conc feed for maintenance during lactation 1.0
2 Conc feed/lit milk (in addition to maintenance) 0.3
3 Conc feed during dry period 1
4 Green grass for maintenance during lactation 26.4
5 Green grass during dry period 24.0
 6 Dry grass for maintenance 3.0
7 Dry grass in dry period 2.7
8 Mineral Mixture during milk production in gm 30
9 Average Conc feed required by heifer/day in kg 2.3
10 Average Green fodder required by heifer/day in kg 10.6
11 Average dry fodder required by heifer/day in kg 1.5
12 Average Conc feed required by calf/day in kg 0.8
13 Average Green fodder required by calf/day in kg 3.5
14 Average dry fodder required by calf/day in kg 0.5
15 Cost of concentrate feed/kg 25
16 Cost of green grass/kg 1.5
17 Cost of Dry grass/kg 5
18 Cost of min mix/kg 100
Details regarding the land development and shed construction
1 Bore well and Submergible pump set with pipe line (Lump sum) 250000
2 Overhead tank with motor and pipe line 200000
3 Land required in acers 10
4 Land development/acre 15000
5 Link mesh to entire farm with bio-security and gate (Lump sum) 600000
6 Trevis with flooring and roofing 65000
7 Fencing to animal sheds on both sides/shed 300000
8 Milch animal Shed area required/animal in sq. ft. 30
9 Cost of large animal shed construction/sq. ft. 450
10 Electrification cost in large animal shed (% over civil construction) 5
11 Heifer Shed area required/animal in sq. ft. 25
12 Cost of heifer shed construction/sq. ft. 450
13 Electrification cost in heifer shed (% over civil construction) 5
14 Calf shed area required/calf in sq. ft. 15
15 Cost of calf shed construction/sq. ft. 450
16 Electrification cost in calf shed (% over civil construction) 5
17 Area of Isolation shed required in sq.ft. 600
18 Cost of construction of isolation shed/sq.ft. 450
19 Electrification cost in isolation shed (% over civil construction) 5
20 Area of office room required/Milch Animal in sq.ft. 5
21 Cost of construction of office room/sq.ft. 500
22 Area of Medicine and Vaccine room required in sq.ft. 400
23 Cost of construction of Medicine and Vaccine room/sq.ft. 500
24 Area of Milk collection and packing room in sq.ft. 2000
25 Cost of construction of milk collection and packing room/sq.ft. 400
26 Area required for construction of labor rooms in sq.ft. 5000
27 Cost of construction of labor rooms/sq.ft. 450
28 Area required for feed godown in sq.ft 1500
29 Cost of construction of feed godown/sq,ft. 500
30 Area required for fodder storage shed in sq.ft 3000
31 Cost of construction of fodder storage shed/sq,ft. 350
32 Area required for garage to vehicles and other implements in sq.ft. 5000
33 Cost of construction of garage/sq.ft. 350
34 Area for Bulk Milk Chilling Room 500
35 Cost of construction of Bulk Milk Chilling Room/sq.ft 500
36 Cost of construction of generator room (Lump sum) 200000
37 Depreciation of civil structures % 5
Details regarding the labor
1 No of large animals can be maintained by each labor 10
2 Wage paid per each labor 12000
Details regarding the equipment and veterinary aid
1 Cost of chaff cutter 50000
2 Cost of Milking Machine 500000
3 Cost of Tractor with Trolley 800000
4 Cost of 4 wheeler van 700000
5 Cultivator and other agriculture implements 200000
6 Cost of Dairy Equipment (BMC, Milk Cans, Milk Analyzer, Freezer) 500000
7 Minor equipment cost/animal 1000
8 Depreciation on equipment % 10
9 Cost for veterinary aid/animal 1500
10 Cost of Sexed Semen/Milch Animal/Annum (@4 A.I/Conception) 6000
11 Water and electricity charges/animal 1000
12 Miscellaneous expenditure/animal 500
13 Discount factor (for financial indicators) 5%
14 Cost of the Project (Only for the Establishment) 40000000
15 Subsidy Portion of the Project 20000000
16 Bank Loan to the Project 16000000
17 Promotor Margin in the Project 4000000
18 Interest Rate to the bank loan amount in % 10
19 Repayment tenure for bank loan in years 7
Estimation of Non-recurring cost

Estimation of Non-Recurring Cost

S.N Unit No of Margin Loan Subsidy
Parameter Total cost
o cost units (10%) (40%) (50%)

1 Cost of Animals 100000 200 20000000 2000000 8000000 10000000

Cost of Insurance for

2 5% 200 1000000 100000 400000 500000
animals

3 Land development 15000 10 150000 15000 60000 75000

Link mesh to entire farm

Lump
4 with bio-security and 600000 60000 240000 300000
sum
gate

Cost of construction of
5 450 6000 2700000 270000 1080000 1350000
shed for large animals

Cost of construction of
6 450 3000 1350000 135000 540000 675000
shed for calves

Cost of construction of
7 450 2500 1125000 112500 450000 562500
shed for heifers

Cost of construction of
8 450 600 270000 27000 108000 135000
Isolation shed

Lump
9 Electrification of sheds 5 275000 27500 110000 137500
sum

Fencing to animal sheds

10 300000 4 1200000 120000 480000 600000
on both sides/shed

Cost of construction of
11 500 1000 500000 50000 200000 250000
Office room

Cost of construction of
12 Medicine and Vaccine 500 400 200000 20000 80000 100000
room

Cost of construction of
13 Milk collection and 400 2000 800000 80000 320000 400000
Packing room

Cost of construction of
14 450 5000 2250000 225000 900000 1125000
Labor rooms
 Cost of construction of
15 500 1500 750000 75000 300000 375000
Feed godown

Cost of construction of
16 350 3000 1050000 105000 420000 525000
Fodder storage shed

Cost of construction of
17 350 5000 1750000 175000 700000 875000
Garage

Cost of construction of
18 Bulk Milk Chilling 500 500 250000 25000 100000 125000
Room

Cost of construction of Lump

19 200000 200000 20000 80000 100000
Generator Room sum

Cost of establishment of
20 Trevis with flooring and 65000 2 130000 13000 52000 65000
roofing

Bore well and water Lump

21 250000 250000 25000 100000 125000
supply system sum

Overhead tank with Lump

22 200000 200000 20000 80000 100000
motor and pipe line sum

23 Cost of chaff cutter 50000 2 100000 10000 40000 50000

24 Cost of milking machine 500000 1 500000 50000 200000 250000

Cost of Tractor with

25 800000 1 800000 80000 320000 400000
Trolley

26 Cost of 4 wheeler Van 700000 1 700000 70000 280000 350000

Cost of Cultivator and

27 other agriculture 200000 1 200000 20000 80000 100000
implements

28 Cost of Dairy Equipment 500000 1 500000 50000 200000 250000

Cost of Minor
29 1000 200 200000 20000 80000 100000
Equipment

Total Non-Recurring
40000000 4000000 16000000 20000000
cost
Overall Herd Projection Chart

Flock Projection
Category Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Opening Stock of Large Animals 200 200 190 171 200 200 200
Opening Stock of Female calves 100 95 191 209 164 138 141
Opening Stock of Male calves 100 95 9 12 11 13 13
Opening stock of Heifers 0 0 0 45 88 92 65
Sale of Large Animals to replace
0 0 10 9 10 10 10
with heifers
Mortality of large animals 0 10 10 9 10 10 10
New Born Female calves 0 126 120 108 126 126 126
New Born Male calves 0 14 13 12 14 14 14
Mortality of Female Calves 5 11 16 16 14 13 13
Mortality of Male calves 5 5 1 1 1 1 1
Live Female calves 95 210 295 301 275 251 254
Live Male calves 95 104 21 23 24 25 25
Sale of Female calves 0 19 38 42 33 28 28
Sale of Male calves 0 95 9 12 11 13 13
Calves turned into Heifers 0 0 48 95 105 82 69
Mortality of Heifers 0 0 2 5 5 4 3
Sale of heifers 0 0 0 2 75 85 62
Heifers replaced large animals 0 0 0 46 20 20 20
Closing stock of Large animals 200 190 171 200 200 200 200
Closing stock of Heifers 0 0 45 88 92 65 49
Closing stock of Female calves 95 191 209 164 138 141 157
Closing stock of Male calves 95 9 12 11 13 13 13
Average farm holding of Milch
200 195 181 185 200 200 200
animals
Average farm holding of Heifers 0 0 23 66 90 79 57
Average farm holding of Female
98 143 200 187 151 139 149
claves
Average farm holding of Male
98 52 10 11 12 13 13
calves
Sale of total Animals (Calves +
0 114 47 56 119 125 103
Heifers)/Year
 Lactation chart

Lactation Chart

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Batch
MD DD MD DD MD DD MD DD MD DD MD DD MD DD
1 30000 6500 29250 6338 27075 5866 27818 6027 29986 6497 29987 6497 29988 6497

2 18000 0 17550 6338 16245 5866 16691 6027 17991 6497 17992 6497 17993 6497
Second batch animals will be purchased after 6 months of purchasing of 1st batch animals

Total 48000 6500 46800 12675 43320 11733 44508 12054 47977 12994 47979 12994 47982 12995
MD refers to Milk Days and DD refers to Dry Days
Feeding Schedule

Feeding Schedule/Day/Animal
Milk Day Feed Dry Day Feed Heifer Feed Calf Feed
Type of Feed
Quantity Cost Quantity Cost Quantity Cost Quantity Cost
Concentrate Feed 2.80 70.00 1.00 25.00 2.3 56.67 0.8 18.89

Green Fodder 26.40 39.60 24.00 36.00 10.6 15.84 3.5 5.28

Dry Fodder 3.02 15.11 2.67 13.33 1.5 7.33 0.5 2.44

Mineral Mixture (gm) 0.03 3.00 0.00 0.00 0.00 0.00 0.00 0.00

Total 32.22 127.71 27.67 74.33 14.29 79.84 4.76 26.61

Feeding Economics

Feeding Economics

Cost of Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Concentrate
4866917 4935568 5244126 6158109 6667606 6361291 5974138
feed
Green fodder 2510604 2684902 2674095 2962714 3201890 3116330 3008166

Dry fodder 985983 1049960 1059312 1188031 1284451 1244830 1194746

Mineral
144000 140400 129960 133524 143932 143938 143945
mixture
Total 8507504 8810831 9107493 10442379 11297879 10866389 10320994
Estimation of recurring costs

Estimation of Recurring Cost

S.No Parameter Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Cost of concentrate
1 4866917 4935568 5244126 6158109 6667606 6361291 5974138
feed
Cost of green
2 2510604 2684902 2674095 2962714 3201890 3116330 3008166
fodder
3 Cost of dry fodder 985983 1049960 1059312 1188031 1284451 1244830 1194746
Cost of mineral
4 144000 140400 129960 133524 143932 143938 143945
mixture
Cost of veterinary
5 300000 292500 270750 278175 299858 299872 299885
aid
Cost of Sexed
6 1200000 1200000 1140000 1026000 1199400 1199460 1199514
Semen used
Water and
7 200000 195000 180500 185450 199905 199915 199923
electricity charges
Miscellaneous
8 100000 97500 90250 92725 99953 99957 99962
expenditure
9 Labor charges 2880000 2880000 2880000 2880000 2880000 2880000 2880000
Total Recurring
13187504 13475831 13668993 14904729 15976994 15545592 15000277
cost

Total Expenditure

Total Expenditure
S.No Parameter Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
1 Cost of feeding 8507504 8810831 9107493 10442379 11297879 10866389 10320994
2 Cost of labor 2880000 2880000 2880000 2880000 2880000 2880000 2880000
Cost of veterinary
3 300000 292500 270750 278175 299858 299872 299885
aid
Water and
4 200000 195000 180500 185450 199905 199915 199923
electricity charges
Miscellaneous
5 100000 97500 90250 92725 99953 99957 99962
expenditure
Depreciation on
6 756250 756250 756250 756250 756250 756250 756250
civil structures
Depreciation on
7 202500 202500 202500 202500 202500 202500 202500
equipment
Bank Loan
Repayment
8 3885714 3657143 3428571 3200000 2971429 2742857 2514286
(Principle +
Interest)
Total Expenditure 16831968 16891723 16916315 18037479 18707772 18047739 17273799
Year wise Bank Loan Repayment Schedule (Principle + Interest)
Bank Loan Repayment Schedule
Category Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Principle amount to be paid 2285714 2285714 2285714 2285714 2285714 2285714 2285714
Intererst on the loan to paid 1600000 1371429 1142857 914286 685714 457143 228571
Ttoal amount to be paid 3885714 3657143 3428571 3200000 2971429 2742857 2514286

Income Calculation
Income
S.No Parameter Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
1 Sale of Milk 18720000 18252000 16894800 17358120 18711108 18711997 18712797
Sale of Female
2 0 760000 1527600 1675420 1311513 1103046 1128697
calves
3 Sale of Male calves 0 3800000 342000 488300 430445 510212 506250
4 Sale of Heifers 0 0 0 120000 4500000 5100000 3720000
Sale of large
4 0 0 570000 513000 599700 599730 599757
Animals
4 Sale of Manure 2171750 2550438 2339176 2524472 2814487 2759729 2632043
Total Income 20891750 25362438 21673576 22679312 28367253 28784713 27299545

Profit Loss Statement

Profit loss statement
S.No Parameter Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
1 Gross profit 4059782 8470714 4757261 4641834 9659481 10736974 10025746
2 Gross profit/month 338315 705893 396438 386819 804957 894748 835479
3 Gross profit/month/animal 856 1811 958 859 1778 2077 1997

Estimation of Financial Parameters

Financial Parameters
Year Cash flow Present value
0 -20000000 -20000000
1 4059782 3866459
2 8470714 7683187
3 4757261 4109501
4 4641834 3818848
5 9659481 7568456
6 10736974 8012095
7 10025746 7125110
NPV 22183656
IRR 21%
BCR 1.08