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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