Cost & Returns In Pig Production (Get A Business Plan & A Feasibility Study)

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

With ever increasing human population in Nigeria and virtually static agricultural productivity, the animal protein consumption among Nigerians has increased in the past few years (Okopo, 1999). Many Nigerians feed on carbohydrates. This is because the average man cannot afford the cost of animal protein which is richer in amino-acid.

The pig industry in Nigeria is an important arm of the livestock sub-sector in the overall agricultural sector. This assertion derives from the fact that porcine production, among other species has a high potential to contribute to high economic gain in three ways. First, the pig have high fecundity, high feed cohesions efficiency, early maturity, short generation interval and relatively small space requirement. Pig is equally important to agro-based industries like feed milk for provision of bone and blood which are used for production of bone meal and blood meal respectively, which are good source of calcium in animal nutrition. In addition pig’s manure is an excellent fertilizer for biogas methane for cooking gas. Its skin is also useful for light leather production (Babatunde and Fetuga, 2006). Thirdly, it is produced under a variety of production system ranging from simple backyard piggery, pigs living on garbage bets to family operated farm or large scale integrated pig industries with sophisticated bio-safety measure.

1.2 Statement of Problem

The people of Awgu Local Government Area of Enugu State also have high value for pig because it is one of the requirements in their marriage and burial rites, many other feast and festivals have special provision for pork meat.

Unfortunately, pigs in most cases are left to the small scale native farmers who traditionally leave the animals to scavenge with minimal attention for their lives. This system is characterized by high mortality rate absence or minimal healthcare and improper housing and feeding (Ugwu, 1996). This has lead to the poor production and improvement of pigs in areas which encourage spread of disease, low fecundity and low meat yield. According to Kanrol and Krider (2009), free ranging of pigs is considered as one of the risk factors for porcine crysticerosis. Therefore, it is imperative to find ways to keep pigs enclosed. Economic studies have showed that traditional production system is wasteful and unprofitable due to poor feed conversion, high mortality rates, low reproductive rates and final products (Verhulst, 1993).

Specifically, this study is going to attempt to provide consumers to the following questions:

i. What are the socio-economic characteristics affecting pig production in the Study Area?

ii. What are the system(s) of pig production in the Study Area?

iii. What are the cost and returns of producing pig?

iv. What are the constraints associated with pig production in the Study Area?

1.3 OBJECTIVES OF THE STUDY

The broad objective of this study is to analyze the cost and returns of pig production in Awgu Local Government Area of Enugu State. The specific objective is to:

i. identify the socio-economic characteristics of pig rearers in the study area.

ii. identify the system(s) of pig production in the study area.

iii. analyze costs and returns associated with pig production

iv. examine the problems or constraints associated with pig production in the study area.

1.4 SIGNIFICANCE OF THE STUDY

This study will provide vital information to investors as well reveal the importance, and advantages of modern piggery over the traditional method of keeping pig. It will help to reduce unemployment because the profitability of the enterprise will motivate unemployed citizens to embrace piggery as a means of livelihood. This study will also help the farmers to know that pig production is capable of transforming the social economic well being and their standard of living.

CHAPTER TWO

2.0 LITERATURE REVIEW

The review of related literature is arranged under the following sub-heading:

v The origin of pig

v Breeds of pig

v Pig production system

v Problems of pig production in Nigeria research constraints

v Importance of pig

v Reasons to invest in piggery in Nigeria

v Policies on pig production in Nigeria

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 THE STUDY AREA

The study will be carried out in Awgu Local Government Area of Enugu State. It is a growing Local Government with her headquarters located at Awgu. Geographically, Awgu Local Government Area lies between latitude 6’ 0⁰ N and 6’ 40⁰ 5 of the equator and longitude 7’ 21⁰E and 7’ 24⁰ W of the greenwish meridian.

The Local Government Area occupies a land of 24.6 square kilometer and has a population of about 390, 681 (National population census, 2006). The Local Government Area is made of twenty (20) communities namely: Ituku, Agbogugu, Ogbaku, Ihe, Isu-Awaa, Agbudu, Owelli, Amoli, Ugbo, Ogugu, Mgbowo, Awgu, Mgbidi, Mmaku, Obeagu, Ugwueme, Nkwe, Ezere, Nenwenta and Awgunta. Each of these communities operates as a separate and independent entity under its own traditional ruler. They are well known for their farming process producing Cassava, maize, yam, pig and poultry. The area is influenced by two main wind systems, the South West trade wind and the North East trade wind. These wind systems gives rise to two district season. The dry and rainy season. The dry season begins in late November and last till March, while the rainy season begins in April and last to October

3.2 SAMPLING TECHNIQUES

Multiple sampling techniques will be used in thus study. Awgu is made up of twenty (20) communities. 10 communities will be purposively selected using purposive sampling techniques. 10 farmers from each community will be randomly selected from pig producers using simple random sampling techniques and a total of 100 farmers will be selected, interviewed and administered questionnaire to obtain useful information for the study

3.3 DATA COLLECTED

The data for thus study will be collected from primary and secondary sources. Primarily data will be collected using well-structured questionnaire. Data will be collected on the socio-economic characteristics of the respondents and their level of production. In addition, data on pig output, farm size, family and hired labour, inputs will be collected.

3.4 METHOD OF DATA ANALYSIS

Descriptive statistical tools such as percentage and frequency distribution table will be used in the analysis. Objective I and II will be analyzed using percentages, frequency distribution table; objective III will be analyzed using gross margin analysis; objective IV will be analyzed using frequency distribution table and mean, objective V will appeared in form of prefer recommendation based on the result of the finding.

v Gross margin = TR –TVC

v Net Profit = TR – TC

v TC = TFC + TVC

v TR = P x Q

v Where;

v TR = Total Revenue

v TVC = Total Variable Cost

v TFC = Total Fixed Cost

v TC = Total Cost

v P = Price

v Q =Quantity

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OUR TABLE OF CONTENT INCLUDE;

SECTION 1(Business plan section)

SECTION I – EXECUTIVE SUMMARY
NAME OF BUSINESS / COMPANY
OFFICE & SITE LOCATION
MOTIVATION
MISSION STATEMENT
SOCIAL/ECONOMIC VALUE
PROJECT STATUS & START UP
WHY PREPARE THIS BUSINESS PLAN?
SECURITIES FOR THE PROPOSED LOAN
REPAYMENT
SECTION II – STUDY AREA
STUDY AREA
COMPANY OVERVIEW
MANAGEMENT TEAM
DEPARTMENTS IN THE COMPANY
EXPERIENCE
MANAGEMENT TEAM GAPS
SECTION III – INDUSTRY ANALYSIS
DEFINING YOUR INDUSTRY
YOUR INDUSTRY SIZE GROWTH RATE AND SALES PROJECTIONS
INDUSTRY STRUCTURE
MARKET OVERVIEW
MARKET SEGMENTATION
RELEVANT MARKET SIZE
KEY SUCCESS FACTORS
LONG TERM PROSPECTIVE
MARKET CHARACTERISTICS
SAMPLING TECHNIQUE
SECTION IV – CUSTOMER ANALYSIS
TARGET CUSTOMERS
CUSTOMER NEEDS
MARKET NEEDS / SOCIAL PROBLEMS AND SOLUTIONS
BUYERS BEHAVIOUR
MARKET SHARE
SALES FORECASTING
SECTION V – COMPETITIVE ANALYSIS
DIRECT COMPETITORS
COMPETITIVE ADVANTAGES
SECTION VI – MARKETING PLAN
PRODUCTS & SERVICES
FINISHED PRODUCTS
PRODUCT QUALITY AND PRODUCTION QUANTITY
PRODUCTION CAPACITY
PRICING
PROMOTIONS PLAN
DISTRIBUTION PLAN
SECTION VII – OPERATIONS PLAN
GENERAL APPROACH TO PRODUCTION
TECHNICAL ANALYSIS / PRODUCTION PROCESS
EQUIPMENT
PACKAGING REQUIREMENTS
SECTION VIII – FINANCIAL PLAN
REVENUE MODEL
FINANCIAL ANALYSIS
FINANCIAL ASSUMPTIONS
FINANCE CHARGES
FINANCIAL PROJECTIONS
FUNDING REQUIREMENTS/USE OF FUNDS
CRITICAL ASSUMPTIONS

SECTION 2(Feasibility study section)

FINANCIAL MODELS
SUMMARY OF PROJECT COST
BUDGET OF FIXED ASSETS / CAPITAL EXPENSES / INVESTMENTS
DEPRECIATION
UTILITIES
OPERATING EXPENSES (OPEX)
TOTAL REQUIRED INVESTMENT OUTLAY (REQUIRED START-UP CAPITAL)
FINANCING PLAN
INSTALLED / AVAILABLE EQUIPMENT
BREAK-EVEN ANALYSIS
LOAN REPAYMENT SCHEDULE AND INTEREST PAID
FORECAST OF PROFIT AND LOSS
CASH FLOW
BALANCE SHEET
GENERAL ASSUMPTIONS (BREAK EVEN ANALYSIS)
BUSINESS RATIOS - PROFITABILITY ANALYSIS
CONCLUSION
SECTION 3 – APPENDIX

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· NOTE; According to our policy, we are not “allowed / permitted” to disclose peoples business or written feasibility study, “to anyone”, irrespective of their personality.

· BUT, WE are permitted to display only executive summary.

· This is just a sample of our executive summary on poultry feasibility study and business plan, carried out in Rivers State.

· 1^st sample;

These Feasibility study on poultry farming business (specializing on layers and boilers production), was conducted using projections, impressive publications, compounding interest/values, tables, graph, bar chart, pie chart, profits analysis and cash flow positions in other to give a clear picture of what is obtainable in that location, using eight plots of land, at Esemdiary village, Off Effurun Sapele Road, Okpe LGA of Delta state, Nigeria as a case study.

Esemdiary village is a community in Okpe Local Government Area of Delta State with coordinates 05°26’N 5°57’E, which also plays the host community to the Warri Airport, which is actually located at Osubi.

Okpe Local Government is a territory that used to be part of the original Okpe Kingdom, its headquarters is at Orerokpe, with a population of 128,398 people whose primary occupations include commercial farming, fishing, hunting, trading and gas exploration.

After carrying out the feasibility study on Esemdiary village, Off Effurun-Sapele Road, Okpe LGA of Delta state, Nigeria, it was discovered that, farming generally will do well both on crop and animal production.

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