Dairy Farming

Jammu and Kashmir Entrepreneurship Development Institute (JKEDI)
DETAILED PROJECT REPORT

On
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2015
2016 2017
August
September
October
November
December
TECHNo-ECONOMIC FEASIBILITY
OF
Dairy Farming
S/O:
D/O:
W/O:
Name
Prop
of Entrepreneur:
Proprietor
Parentage:
Prapered By
Hassan Mubasher
(scfs)
FOR
Prop.
0
address 0
District 0
Cell No. 0
September,2015
Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239www.jkedi.org
Jammu and Kashmir Entreprenuership Development Institute

Seed Capital Fund Scheme (SCFS)
PROJECT PROFILE
Name Of Unit:
Name of the Entreprenuer:
Name of Father /Spouse
Unit Address :
District :
Tehsil:
Pin:
Constituency:
Cell:
Legal Status:
Sole Propreitorship
Activity:
Dairy Farming
Sector:
Agri-Allied
Total Cost of Project :

S.No.
Particulars
A.
Fixed Capital Investment
B.
Working Capital
Total
10
Means of Financing:
Particulars
Term Loan
Seed Capital
Promoters Contribution
Total
Percentage
77%
23%
100%
Percentage
65%
35%
Amount
3,06,931
93,069
4,00,000
Amount
2,60,000
1,40,000
0
4,00,000
11
Unit Size:
3 Cows
12
Pay Back Period in Years:
13
Moratorium Period:
6 Months
14
Break Even Point:
56.67%
15
Employment Generation:
16
Projected Sales :
17
Debt Service Coverage Ratio:
2
5,82,578
Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

2
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Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

Introduction
The Detailed project report is for establishment of Dairy Cattle Farm. Dairy farming is
recognized as an instrument for social and economic development. The States overall fresh milk
supply comes from small producers, dispersed throughout the rural and semi-urban areas. These
farmers maintain an average herd of 5 or 8 cows. The cows feed and fodder requirements are
largely met by nearby grazing land and agricultural waste in rural areas, in semi-urban areas it is
largely met by organic waste of households on streets, a small portion of nutritional requirement
in both the cases is met by procured feed and feed supplement from market with erratic supply,
which makes dairy farming a costly affair. Availability of ample labor and a small land base
encourage farmers to practice dairy farming as an occupation subsidiary to agriculture or other
allied activities. While income from agriculture or allied activities is seasonal, dairying provides a
stable, year-round income, which is an important economic incentive for the small farmer
to take to dairy farming. Presently, dairy sector in Kashmir valley is experiencing problems like
unhygienic and adulterated final product for consumption due to low productivity, weak market
organization, insufficient policy support, high operation cost, instable prices, low margins for
farmers, decreasing effectiveness of departmental support due to its multilayered structure etc.all
of which hamper the development of the sector possessing a huge growth potential.
The trained Entrepreneurs in commercial dairy farming is being sponsored by JKEDI under
SCFS for availing loan essential for setting up of the unit. The items of finance would include
capital asset items such as purchase of Milch animals, construction of sheds, purchase of
equipments etc. The feeding cost during the initial period of three months is capitalized and
given as term loan. Facilities such as cost of land development, fencing, digging of well, etc. can
be considered for loan. Cost of land is not considered for loan. However, if land is purchased for
setting up a dairy farm, its cost can be treated as party's margin upto 35% of the total cost of
project. The project include livestock markets, availability of water, feeds, fodders, veterinary
aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the
type of assistance available from State Government.
Based on this, the total cost of the project, margin money to be provided by the beneficiary,
requirement of bank loan, estimated annual expenditure, income, profit and loss statement,
repayment period, etc. can be worked out and shown in the Project report.Other documents such
as loan application forms, security aspects, margin money requirements etc. are also examined. A
field visit to the scheme area is undertaken for conducting a techno-economic feasibility study for
appraisal of the scheme. The loans will be repaid in suitable monthly/quarterly instalments
usually within a period of about 5 years. In case of commercial schemes it may be extended upto
6-7 years depending on cash flow analysis.

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Common Management Practices Recommended for Dairy Farmers

Modern and well established scientific principles, practices and skills should be used to obtain
maximum economic benefits from dairy farming. Some of the major norms and recommended
practices are as follows :
Housing:
Construct shed on dry, properly raised ground.
Avoid water-logging, marshy and heavy rainfall areas.
The walls of the sheds should be 1.5 to 2 meters high.
The walls should be plastered to make them damp proof.
The roof should be 3-4 metres high.
The cattle shed should be well ventilated.
The floor should be pucca/hard, even non-slippery impervious, well sloped (3 cm per metre)
andproperly drained to remain dry and clean.
Provide 0.25 metre broad, pucca drain at the rear of the standing space.
A standing space of 2 x 1.05 metre for each animal is needed.
The manger space should be 1.05 metre with front height of 0.5 metre and depth of 0.25
metre.
The corners in mangers, troughs, drains and walls should be rounded for easy cleaning.
Provide 5-10 sq. metre loaf space for each animal.
Provide proper shade and cool drinking water in summer.
In winter keep animals indoor during night and rain.
Provide individual bedding daily.
Maintain sanitary condition around shed.
Control external parasites (ticks, flies etc.) by spraying the pens, sheds with Malathion or
Copper sulphate solution.
Drain urine into collection pits and then to the field through irrigation channels.
Dispose of dung and urine properly. A go bar gas plant will be an ideal way. Where Bio-gas
plant is not constructed, convert the dung along with bedding material and other farm wastes
into compost.
Give adequate space for the animals.
Selection of Animal :
Immediately after release of the loan purchase the stock from a reliable breeder or from
nearest livestock market.
Select healthy, high yielding animals with the help of technical officer, veterinary/animal
husbandry officer of State government.
Purchase freshly calved animals in their second/third lactation.
Before purchasing, ascertain actual milk yield by milking the animal three times consecutively.

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Identify the newly purchased animal by giving suitable identification mark (ear tagging or
tattooing).
Vaccinate the newly purchased animal against disease.
Keep the newly purchased animal under observation for a period of about two weeks and then
mix with the general herd.
Purchase a minimum economical unit of two milch animals.
Purchase the second batch after 5-6 months from the purchase of first animal.
As Cows are seasonal calvers purchase them during July to February.
As far as possible purchase the second animal when the first animal is in its late stage of
lactation and is about to become dry, thereby maintaining continuity in milk production vis-avis income. This will ensure availability of adequate funds for maintaining the dry animals.
Follow judicious culling and replacement of animals in a herd.
Cull the old animals after 6-7 lactations.
Feeding of Milch Animals
Feed the animals with best feeds and fodders.
Give adequate green fodder in the ration.
As far as possible, grow green fodder on your land wherever available.
Cut the fodder at the right stage of their growth.
Chaff roughage before feeding.
Purchase crushed grains and concentrates.
The oil cakes should be flaky and crumbly.
Moisten the concentrate mixture before feeding.
Provide adequate vitamins and minerals. Provide salt licks besides addition of mineral mixture
to the concentrate ration.
Provide adequate and clean water.
Give adequate exercise to the animals. To estimate the daily feed requirement remembers that
the animals consume about 2.5 to 3.0 percent of their body weight on dry matter basis.
Milking of Animals
Milk the animals two to three times a day.
Milk at fixed times.
Milk in one sitting within eight minutes.
As far as possible, milking should be done by the same person regularly.
Milk the animal in a clean place.
Wash the udder and teat with antiseptic lotions/luke-warm water and dry before milking.
Milker should be free from any contagious diseases and should wash his hands with antiseptic
lotion before each milking.
Milking should be done with full hands, quickly and completely followed by stripping.
Sick cows should be milked at the end to prevent spread of infection.
V. Protection against Diseases
Be on the alert for signs of illness such as reduced feed intake, fever, abnormal discharge or
unusual behavior.
Consult the nearest veterinary aid centre for help if illness is suspected.
Protect the animals against common diseases.
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In case of outbreak of contagious disease, immediately segregate the sick, in-contact and the
healthy animals and take necessary disease control measures.
Conduct periodic tests for Brucellosis, Tuberculosis, Johne's disease, Mastitis etc.
Deworm the animals regularly.
Examine the manures of adult animals to detect eggs of internal parasites and treat the
animals with suitable drugs.
Wash the animals from time to time to promote sanitation.
Breeding Care
Observe the animal closely and keep specific record of its coming in heat, duration of heat,
insemination, conception and calving.
Breed the animals in time.
The onset of estrus will be within 60 to 80 days after calving.
Timely breeding will help achieving conception within 2 to 3 months of calving.
Breed the animals when it is in peak heat period (i.e. 12 to 24 hours of heat).
Use high quality semen preferably frozen semen of proven sires/bulls.
Care during Pregnancy
Give special attention to pregnant cows two months before calving by providing adequate
space, feed, water etc.
Marketing of Milk
Marketing milk immediately after it is drawn keeping the time between production and
marketing of the milk to the minimum.
Use clean utensils and handle milk in hygienic way.
Wash milk pails/cans/utensils thoroughly with detergent and finally rinse with chloride
solution.
Avoid too much agitation of milk during transit.
Transport the milk during cool hours of the day.
Care of Calves
Take care of new born calf.
Treat/disinfect the navel cord with tin cuter of iodine as soon as it is cut with a sharp knife.
Feed colostrum to calf.
Assist the calf to suckle if it is too weak to suckle on its own within 30 minutes of calving.
In case it is desired to wean the calf immediately after birth, then feed the colostrum in
bucket.
Keep the calf separately from birth till two months of age in a dry clean and well ventilated
place.
Protect the calves against extreme weather conditions, particularly during the first two
months.
Group the calves according to their size.
Vaccinate calves.
Dehorn the calves around 4 to 5 days of age for easy management when they grow.
Dispose of extra calves not to be reared/maintained for any specific purpose as early as
possible, particularly the male calves.
The female calves should be properly reared.
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Milk Marketing:
Milk is among the most important consumable and marketable commodities of the world with
enormous demand in domestic and international market. Timing the demand of milk in
summer is high as compared to winter. Thats why the animals in summer are sold at a bit
higher prices as compared to winter. So the proposed business can be started before the onset
of summer season. At the commencement of the proposed business, it is important that the
entrepreneur must have good knowledge of the production and have contacts with the
livestock breeders and farmers. The ability to work with people and animals, and efficient use
of resources are important aspects in modern and commercial dairy farming. In the State, milk
trade practices are not established and milk marketing network is not much developed and
milk is produced mostly for household consumption and local marketing. There is scope for
cooperative development and milk distribution development through institutional
arrangements with milk processing plant, of the daily production of 95,00000 lit/day in the
State only 212,500 lit./day i.e (5.4%) is marketed in an organized way by local dairy
processing plant owners, rest is sold in loose and unhygienic way. The small and landless
dairy farmers account for 100 % of marketed milk, with increasing population, urbanization,
income and diversification of diet towards high nutritive value products, per capita milk
consumption is increasing.
The information collected through meetings with farmers indicated that yield levels varied
from farm to farm. The majority farmers with average management of farm on scientific terms
were able to get yield at 7-8 liters per day/cow, however very few farmers who applied
improved practices including feed, fodder, health checkups etc. were able to obtain good
yields ranging from 10-12 liters per day/cow. The seasonal fluctuations in milk production
occur due to lower water and fodder availability in winters when the production of milk
decreases. The milk market in Jammu & Kashmir is characterized by the presence of number
of different kinds of mediators in milk marketing system, such as milk producers, Milk
collectors, Milk retailers operating at different stages of milk collection and distribution.
However, there is a serious problem of displaying the share in quantitative terms due to the
incompleteness of statistical data through these channels.
The major players in Milk marketing in valley are:
Milk producers: They are sole point of milk production and include rural subsistence and
semi-subsistence farmers, rural market oriented farmers, city and semi-urban landless
producers constituting majority of dairy farmers and are responsible for 100% of the milk
produced. They normally keep 1-3 milk producing cows.
The milkman or (Goor) are the main and traditional and well established intermediaries in
linking farmers in rural and semi-urban areas with consumers. They have more social and
family links with the farmers and enjoy more trust and family bonds with them. They collect
milk in small quantities from farmers at their doorstep and milk is sold to consumers at their
door step. The marketing cost involved is mainly labor and transportation charges.The milk is
handled in crude way. A milkman owns a few metallic containers/cans to collect,transport
and distribute milk without chilling and care for hygiene of milk.
Street Milk retailers may produce his own milk and sell or buy the milk form milkmen
(Goors) or collectors.
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Contractors are based on the contractual arrangements with some individuals who collect milk
at their own from farmers, milkmen and after purchasing milk in the bulk from farmers sell that
directly to milk retail shops or dairy processors.
Village Milk Collection Centers are set up by milk processing plant owners like (Khyber,Zum
Zum,White valley,& Sun fresh) etc . They possess refrigerated carriers and have set up
collection centers in milk production areas of the valley where they have created basic
infrastructure for milking and testing the quality of milk collected from the small dairy farmers
and supply approximately 90,500 lit/day.
Dairy Cooperative Society (J&KMPCo.) is the only organized system of milk collection and
distribution where milk reaches in processed and packaged form to final consumers through
allocation channels owned by wholesalers as well as the departmental stores and other shops. Of
the 33,00000 lit/day milk production in Kashmir valley, milk marketed through cooperative
societies to J&KMPCL is about 10,565 lit/day that makes about .333 % (approx) of market
share at present, is much better organized both in terms of milk collection system and quality.
This has created competition to the traditional milk collection system dominated by milkmen
(Goors) to some extent and has enabled rural farmers to obtain better prices, provided they
practice scientific techniques in farming for quality milk production with less bacterial and
somatic cell count.
The Number of Dairy Cooperative societies district wise in Kashmir Valley and daily
procurement
from
them
is
as:
District
DCS
Daily Procurement/day
Pulwama
80
3987 lit
Anantnag
16
1038 lit
Shopian
16
1100 lit
Kilgam
21
1085 lit
Baramulla
26
1436 lit
Budgam
24
1919 lit
Total
183
10,565 lit/day
Ganderbal
Separate Milk union/Society
Consumers are the last at the milk marketing chain and consist of individual household as well
as institutions like hotels, restaurants, hospitals, cafeterias which are mainly supplied by
organized players, while former are the major consumers of milk from unorganized sector are
always under a constant threat regarding the food safety, as raw milk is sold to them mostly
under doubtful and unhygienic way, that too without pasteurization, packaging and at high
ambient temperatures, which lead to considerable reduction in its shelf life, thus adversely
affecting the quality of milk. Moreover the origin of milk is usually unknown, as it relates to
milk from unregistered dairy farmers, thereby involving quality and quantity issues with respect
to legal and monitoring framework. Even though this risky position is known to consumers, still
many consumers prefer to consume unprocessed milk in order to make tea, desserts, curd etc.
by traditional methods, because of the miss-belief that street milk is of better quality and
fresher
than
processed
milk.
Key Success Factors/Practical
Tips for Success Commercial dairy farmers depend on land, labor and animals as the major
resources. The thrust in modern dairy farming is on the increased use of capital and
management. Successful dairy farming harnesses all available resources into productive and
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profitable unit. Dairy farming is highly complex as it includes breeding, management, feeding,
housing, disease control and hygienic production of milk on farm. The judicial use of means and
resources to achieve clearly defined goals is the key success factor in modern dairy farming i.e.
the art of maximization and optimal utilization of resources and means for maximizing
productivity and profits. The low yielder animals are uneconomical to keep, hence these should
be culled. The over all genetic improvement of all the dairy animals is necessary for improved
milk production. It involves milking records at equal intervals, selection of bull from high
producing mothers, progeny testing of breeding bull and then making extensive use of these
bulls by well-organized Artificial Insemination (AI) program. Feeding dairy animals on
nutritious and high yielding hybrid varieties of forages can be adopted. The surplus forage
should be preserved as silage or hay. Other farm management practices include feeding for
growth, lactation, pregnancy or maintenance, hygienic milk production, comfortable and
ventilated barns, spraying/ wallowing of animals in summer, timely detection of heated, mating,
with selected bull or AI service. If animals are bred within the 60-90 days of calving provided
with clean surroundings, drinking water and feed according to the requirements, the overall
performance of herd can be improved. Timely vaccination against Foot and Mouth Disease,
Brucellosis along with the prevention of mastitis and parasitic control will also improve the
overall performance of dairy herd. Hygienic milk production depends upon healthy animals,
clean surroundings, clean hands of milkman and clean utensils.
Market Potential
Raw milk is used for drinking and tea making purpose. In rural areas, milk is used to make Desi
ghee, yogurt, whey (lasi) and butter. Rural as well as the urban households are the major
consumers of milk. The demand for milk increases during summers as the consumption of whey
(lassi) rises due to hot weather. Ghee is obtained by heating the milk to evaporate water and
removing the curd. Liquid butter oil with 93% fat content and a much smaller volume results. It
is easy to store and resists spoilage even at tropical temperatures. Milk processing companies
use milk as a raw material to formulate different types of milk i.e. pasteurized milk, UHT
treated milk, condensed milk, skim milk & milk powder, etc. Different value added products
like yogurt, ice cream, butter and cheese are also prepared from the raw milk. The processed
milk market has increased its share in quality.
Conditions that favor dairy farming
The following conditions are required to enable a good environment for dairy farming:
A good climate with sufficient rainfall, preferably well distributed over the year.
A good water supply from rivers, streams, dams, boreholes, etc. Water is essential for the
animals to drink and to maintain a good hygienic standard at farms.
A nearby market for the milk within reach. Either informally direct to consumers or formally
through Cooperative Societies and milk processors.
Availability of inputs, like stock feeds and veterinary drugs.
Access to technical information and support of a dairy extension service and to breeding
facilities, like Artificial Insemination (A.I.) or Cow camps.
Access to an infrastructure with all-weather roads.
Knowledge of good crop husbandry; like maize, fodder crops and legumes.
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A cultural background with a tradition of cattle keeping and milk consumption.

Essentials of successful dairy farming
To make dairy farming a successful enterprise at the farm the following factors are essential:
Availability of good quality feeds, fodder, water and grazing throughout the year.
Suitable breeding animals with potential for milk production.
Good animal husbandry practices.
Effective disease and parasite control.
Title deed land settlement.
Favorable good government policy towards smallholder dairy farmers.
Dairy Cattle Breed Selection For Milk Production
Selection of Cattle breed for farm is extremely important due to the following reasons:
Lactation Period: Lactation period for various breeds differ that will have direct impact on
farm revenues.
Size of Cow: Large cows generally produce more milk than small cows, but milk yield does
not vary in direct proportion to body weight. Rather, it varies by the 0.7 power of body weight,
which is an approximation of the surface area of the cow (metabolic body size). A cow which
is twice as large as another usually produces only about 70% instead of 100% more milk.
Milk Production Capacity: Certain breeds produce more milk than others; however,
different breeds produce within a range of around 2,000 to over 10,000 kg of milk per annum.
Comparative analysis of milk production capacity for various cattle breeds is given below:
Breed Milk
Yield (Kg/Y)
Lactation Period
1.Jersey
5,000
310
Guernsey
5,500
305
Brown Swiss
6,180
Shorthorns
6,700
305
Australian Friesian Sahiwal

Sahiwal
2. Holestein-Friesian
3,000-5000
280
2,270
9000 to 15,385
300
365
Red Sindhi
1900
265
Cholistani
1,188
165
Tharparkar/White Sindhi
1,660
305

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Entreprenuers Background
M/s******** is a sole propreitership concern.The promoter has qualified 10+2 and is a young person with
enthusiasm and energy to excel. The promoter will be overall in charge in the process of setting up a
small- scale unit for Dairy Farming. The unit is proposed to be located at on 1 Kanal Rented land.
Where all the basic infrastructural facilities viz: Water connection, Power connection road connectivity
is available as per the requirement. The proposed project as such would not face any difficulty for its
smooth operation. The requirement of land for the project has been worked out on the basis of covered
area for civil works, marginal area for future expansion.Besides all necessary Registrations,licenses,No
Objection Certificates have been obtained.

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Assumptions of Project:
S.No Discription
Remarks
Economic Life of Cows
6 to 7 Lactatations
Rearing System
Shed rearing
Breeds Type
Local & Hybrid (Jersy or HF)
Shed Area
40 Sq.ft per Cow
Breeding Cycle
One Calf a year
Gestation Period
282 Days
Adult Mortality
5%
Calf Mortality
10%
Culling Percentage
Every Five years at the rate of 20 Percent
10 Calving interval
13-15 Months
11 Insurance Cost
3 Percent of Value of Ewe
16 Sex ratio
01:01
17 Female Progeny
Retained in Flock for growth of farm
20 Annual Manure Production
Avg.20 Kg/Cow
22 Rate of Culled Stock
50,000.00
23 Avg.Age at first Calving
2-3 years
24 Lactation Period
280 days
25 Wet Cows
80.00%
26 Breeding Stock Development
3 Years
27 Male calves Sold

28 No.of Working days
29 No. of Shift
After Birth
365
Round the clock

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Project Financials
The Total Project Cost for the proposed venture is estimated at
4,00,000.00
The subsidy amount depends upon the educational qualification of the borrower and is as:
S.No Qualification
Amount (Lkhs)
1 10+2 & Graduate
3,00,000.00
2 Post Graduate
5,00,000.00
3 Technical Graduate
7,50,000.00
The amount if needed to make 35% Margin money, for availing bank loan of 65% of Total Project Cost may
be contributed by Entreprenuer himself,the said venture has funding pattern as:
S.No
Particulars
Percentage
Amount (Rs.)
1 Seed Capital
1,40,000
35%
2 Promoters Contributers
0
3 Term Loan
65%
2,60,000
Likewise,the project will be financed under two accounts viz.
Term Loan A/c For Fixed Capital Investment
Cash Credit A/c for Working Capital Investment

The projected Financials are given under following heading:
I
Fixed Capital Estimate
II
Working Capital Estimate
III
Recurring Expenses
IV
Depreciation Schedule
Projected Sales
VI
Projected Profit & Loss Account for Six Years
VII
Projected Cash Flow Statement for Six Years
VIII
Projected Balance Sheet for Six Years
IX
Repayment Schedule for Six Years
Payback Period
XI
Break-Even Analysis
XII
Debt Service Coverage Ratio
XIII
Benefit Cost Ratio Estimate

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Fixed Capital Investment
1
Land
Rented
Civil Work
Dimensions
Shed/Workshop
12" X 10"X10''
Area Sq.ft
Rate/Sq.ft
120
Rate in Rs.
Rented
Sub-Total
3
Livestock
Cross breed Cows
Quantity
Rate
Amount
75000.00
225000.00
2,25,000.00
Sub-Total
4
Equipement:
Quantity
Rate
Amount
Milk Pails
300.00
600.00
Buckets
200.00
200.00
Cans
400.00
800.00
Chains
1505.00
1505.00
Weighting Balance
5000.00
5000.00
Chaff Cutter
15000.00
15000.00
Manure Kart
1000.00
1000.00
Tool Kit
1000.00
1000.00
25,105.00
Sub-Total
5
Miscellaneous Assets
Rate
Amount
Tables & Chairs
LS
2,500.00
Fans
LS
2,500.00
Sub-Total
6
Quantity
5,000.00
Preliminary Expenses
Amount
Processing Fee
2,000
Renovation
36,135
Intererst during Moratorium
13,691
Sub-Total
Grand Total
51,826
3,06,931

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Working Capital Estimate
The working capital requirement is calculated on the basis of Operating Cycle Expenses and is provided for Six
Months in order to carry on its functions in a normal manner.Besides,the working capital requirements for the
unit include cost of Feed & Concentrate ,General Expenses,Wages & Salaries and Utilities & Upkeep.
S.No Particulars
Herd Size
Days
Amount
Feed & Concentrate
90
50867
General Expenses
90
19566
Utilities & Upkeep
90
444
Wages & Salaries
90
22192
Total
93,069
Feeding Schedule
S.No Particulars
Herd Size
Days
Quantity
(Kg)/Cow/Day
Rate
Amount
Lactating Cows
1
Green Fodder
270
25
113400
Dry Fodder
270
10
51840
Concentrate
270
15
29160
Minerals & Salts
270
324
Dry Cows
1
Green Fodder
95
20
7980
Dry Fodder
95
2280
Concentrate
95
15
1282.5
Mineral & Salts
95
28.5
2,06,295.00
Total
Total Dry Fodder Consumpton

Total Concentrate Consumpton
6765 Kg
2029.5 Kg

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Annual Recurring Expenses
A Wages & Salaries
S.No
Particulars
1
2 Manager (Self)
3 Gowalas*
Total
No. of
Amount
Amount
Worker
Per Month
Per Annum
1
1
2
5000
60000
2500
30000
7500
90000
*On an Average one Cow take 1/2 hours of labour per day at the rate of Rs.40 a day
B Utilities & Upkeep

S.No Particulars
1
2
3
Lighting*
Water*
Disinfectant
Total
*Rs 200
Ist
2nd
3rd
4th
5th
6th
7th
600
600
600
600
600
600
600
600
600
600
600
600
600
600
600
600
600
600
600
600
600
1800
1800
1800
1800
1800
1800
1800
Ist
2nd
3rd
4th
5th
6th
7th
1%
1%
251
251
251
251
251
251
251
251
251
251
251
251
251
251
3rd
4th
5th
6th
7th
676365
676365
Per cow per year
C Repairs & Maintenance:

S.No Particulars Amount %age
1
2
Building
Equipement 25105
Total
D Selling & Distribution Expenses:

S.No Particulars %age
Ist
2nd
1
Sales
676365 676365
2
3
E
S.No
1
2
3
4
5
6
676365 676365 676365
Marketing
3%
20291
20291
20291
20291
20291
20291
20291
Hauling
Total
2%
13527
13527
13527
13527
13527
13527
13527
33818
33818
33818
33818
33818
33818
33818
General Expenses :
Particulars
Per Month Per Annum
Rent
5000.00 60000.00
Telephone Expenses
500.00
6000.00
Stationery & Postage
50.00
600.00
Veterinary Expenses*
62.50
750.00
Miscellaneous Expenses
1000.00 12000.00
Insurance Expenses**
562.50
Total
*Rs
6750.00
79350.00
250 of Medication per Cow per Annum is required

**3% of Cost per annum per Animal

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16

STATEMENT SHOWING THE DEPRECIATION ON FIXED ASSETS
The Depreciation is calculated under Written-Down Value Method (WDV) with preliminary expenses amortized in 5
years.
BUILDING @ 5.00%
Particulars
1st Year
2nd Year 3rd Year
4th Year
5th Year
6th Year
7th Year
Opening Balance
Depreciation
Closing Balance
4th Year
5th Year
6th Year
7th Year
EQUIPMENT @ 10.00%
Particulars
1st Year
2nd Year 3rd Year
Opening Balance
25105
22595
20335
18302
16471
14824
13342
Depreciation
2511
2259
2034
1830
1647
1482
1334
Closing Balance
22595
20335
18302
16471
14824
13342
12008
4th Year
5th Year
6th Year
7th Year
MISCELLANEOUS ASSETS @ 10.00%

Particulars
1st Year
2nd Year 3rd Year
Opening Balance
5000
4500
4050
3645
3281
2952
2657
Depreciation
500
450
405
365
328
295
266
Closing Balance
4500
4050
3645
3281
2952
2657
2391
4th Year
5th Year
6th Year
7th Year
PRELIMNERY EXPENSES
Particulars
1st Year
2nd Year 3rd Year
Opening Balance
51826
41461
31096
20730
10365
Less:
10365
10365
10365
10365
10365
Closing Balance
41461
31096
20730
10365
Assets Net of Depreciation

Particulars
1st
2nd
3rd
4th
5th
6th
7th
Equipment
22595
20335
18302
16471
14824
13342
12008
Miscellaneous Assets
4500
4050
3645
3281
2952
2657
2391
Net Block
27095
24385
21947
19752
17777
15999
14399
Total Depreciation
3011
2709
2439
2195
1975
1778
1600
Building

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17

Sales Realization
This is assumed that the sale of Milk is a every day business whereas the sale of Manure,gunny bags and calves
will be held seasonally
S.No Particulars
Sale of Milk
Sale of Manure
Sale of Gunny Bags
Sale of Calves
Quantity
(Kg/No.)
Rate/Unit
No.of Cows
Days
Amount
17
35
270
385560
25
365
109500
176
20
3518
35000
84000
Total
5,82,578

18
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Projected Profitability statement for Seven years of operation of unit
The projected income staement gives a snapshot of yearly performance of project and ins presented below:
S.No.
Particulars
A Year of Operation
B Capacity Utilization (%)
C Sales/Revenue
Less: Sales Return
Less: Cash Discount
Net Sale Revenue
Less : Cost of Sales
Opening stock
Purchases/Raw Material
Salary & Wages
Sub-Total
Operating Years
1st
2nd
3rd
4th
5th
6th
7th
100
100
100
100
100
100
100
582578
582578
582578
582578
582578
582578
582578
582578
582578
582578
582578
582578
582578
582578
206295
206295
206295
206295
206295
206295
206295
90000
90000
90000
90000
90000
90000
90000
296295
296295
296295
296295
296295
296295
296295
D Gross Profit on Sales

Less: Operating
Overhead Expenses
General Expenses
Utilities & Upkeep
Repairs & Maintenance
Depreciation
Sub-Total
Less: Operating
Selling & Distribution
Expenses
Marketing
Hauling
Sub-Total
286283
286283
286283
286283
286283
286283
286283
79350
79350
79350
79350
79350
79350
79350
1800
1800
1800
1800
1800
1800
1800
251
251
251
251
251
251
251
3011
2709
2439
2195
1975
1778
1600
84412
84111
83840
83596
83376
83179
83001
20291
20291
20291
20291
20291
20291
20291
13527
13527
13527
13527
13527
13527
13527
33818
33818
33818
33818
33818
33818
33818
118230
117929
117658
117414
117194
116997
116819
Gross Expenses
Operating Profit
168053 168354 168625 168869 169088 169286 169464
Less: Financial Expenses
Interest on Term Loan
12987
23703
20392
16707
12606
8042
2962.05
Interest on Working Capital
0
0
0
0
0
0
0
Discount Allowed
0
0
0
0
0
0
0
Less: Other Expenses
Preliminary expenses
10365
10365
10365
10365
10365
0
0
Sub-Total
23352
34068
30757
27072
22971
8042
2962
G
Profit Before Tax
144701 134286 137868 141797 146117 161244 166502
Less: Taxation
0
0
0
0
0
0
F
H Profit After Tax

Appropriations
Less: Drawings
Term Loan Repayments
Sub-Total
I
Net Profit
144701
134286
137868
141797
146117
161244
166502
26335
29310
32621
36306
40407
44971
50050.7
26335
29310
32621
36306
40407
44971
50051
118366
104976
105247
105491
105710
116273
116451

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19

Projected Cash Flow Statement for Seven years
S.NO.
Particulars
Cash flow from operating activities
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
Receipts from customers
582578
582578
582578
582578
582578
582578
582578
Payments to suppliers
206295
206295
206295
206295
206295
206295
206295
Wages & Salaries
90000
90000
90000
90000
90000
90000
90000
Utilities & Upkeep
1800
1800
1800
1800
1800
1800
1800
251
251
251
251
251
251
251
33818
33818
33818
33818
33818
33818
33818
General Expenses
79350
79350
79350
79350
79350
79350
79350
411514
411514
411514
411514
411514
411514
411514
171064
171064
171064
171064
171064
171064
171064
Payments of borrowings
-26335
-29310
-32621
-36306
-40407
-44971
-50051
Payment of Interest
-12987
-23703
-20392
-16707
-12606
-8042
-2962
Net cash flow from Financing activities
360678
-53013
-53013
-53013
-53013
-53013
-53013
Net increase (decrease) in cash held
224811
118051
118051
118051
118051
118051
118051
Cash at beginning of period
224811
342861
460912
578963
697014
815064
Cash at end of period
224811
342861
460912
578963
697014
815064
933115
Tax
Total
Net cash flow from operating activities
Cash flow from investing activities
Establishment
81931
Livestock
225000
Net cash flow from investing activities
Cash flow from financing activities
Proceeds from Borrowings
260000
Seed Capital
140000
Drawings
-306931

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20

Projected Balance Sheet for Seven years
Liabilities
1st Year
2nd Year
3rd Year
4th Year
5th Year
6th Year
7th Year
Seed Capital
140000
140000
140000
140000
140000
140000
140000
Term loan
260000
233665
204355
171734
135428
95022
50051
Repayments
26335
29310
32621
36306
40407
44971
50050.712
Net loan
233665
204355
171734
135428
95022
50051
Reserve
144701
278987
416855
558652
704769
866013
144701
134286
137868
141797
146117
161244
166502
Net Profit
Current Liabilities
Total
Assets
5,18,366
6,23,342
7,28,589
8,34,080
9,39,790
10,56,063
11,72,514
1st Year
2nd Year
3rd Year
4th Year
5th Year
6th Year
7th Year
Livestock
225000
225000
225000
225000
225000
225000
225000
Net Block
27095
24385
21947
19752
17777
15999
14399
Preliminary Expenses
41461
31096
20730
10365
Cash & Bank Balance
224811
342861
460912
578963
697014
815064
933115
Stock
Total
5,18,366
6,23,342
7,28,589
8,34,080
9,39,790
10,56,063
11,72,514

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21

Repayment Schedule Yearly
Repayment of Principle amount along with Interest payments is calculated at the rate of 10.75% per
annum,the repayment period of Six years and the moratorium period is of two quarters,in which an
enterprenuer is going to pay an interest amount only.
S.No. Particulars
1st Year
2nd Year
3rd Year
4th Year
5th Year
6th Year
7th Year
Balance
260000
233665
204355
171734
135428
95022
50051
Principle
-26335
-29310
-32621
-36306
-40407
-44971
-50050.7
Interest
-12987
-23703
-20392
-16707
-12606
-8042
-2962.05
Cash Outflow
-39322
-53013
-53013
-53013
-53013
-53013
-53013

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22

Pay Back Period
Year
NCI
CFAT
CCF
400000.00
-400000.00
-400000.00
144701
-255298.73
134286
-121012.60
137868
16855.27
141797
158651.78
146117
304768.77
161244
466012.72
166502
632514.26
Payback Period
3.88
Given initial investment of the project the projected Cash inflows provide and estimate for how long will it
take to recover the initial investiment in the project.
NCI
CFAT
CCF
Net Cash Inflow

Cash FlowAfter Tax
Cumulative Cash Flow

23
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Benefit Cost Ratio
The table is an estimate of profitibility index that the project may attain and should be preferably
greater than one.
Particulars
Ist
2nd
3rd
4th
5th
6th
306931
414525
414525
414525
414525
414525
414525
721456
414525
414525
414525
414525
414525
Sale of Milk
385560
385560
385560
385560
385560
385560
Sale of Manure
109500
109500
109500
109500
109500
109500
84000
84000
84000
84000
84000
84000
3518
3518
3518
3518
3518
3518
Total Cost
579060
579060
579060
579060
579060
579060
Net Benefits
-142396
164535
164535
164535
164535
164535
BCR
0.802627 1.396925 1.396925 1.396925 1.396925 1.396925
Avg.BCR
1.297875
S.No.
Costs
Capital Cost
Recurring Cost
Total Cost
Benefits
Sale of Calves
Sale of Gunny bags

24
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Detailed Debt Service Coverage
The debt service coverage ratio shows the ability of the unit to repay interest and principal amount of
composite loans.
S.no
Particulars
1st
2nd
3rd
4th
5th
6th
7th
144701
134286
137868
141797
146117
161244
166502
Source of funds
Profit after tax
Depreciation
3011
2709
2439
2195
1975
1778
1600
Interest on term loan
12987
23703
20392
16707
12606
8042
2962
Total A
160698
160698
160698
160698
160698
171064
171064
Disposition of funds
Repayment of term loan
26335
29310
32621
36306
40407
44971
50051
Total B (3+4)
39322
53013
53013
53013
53013
53013
53013
4.09
3.03
3.03
3.03
3.03
3.23
3.23
Debt service coverage ratio
Average DSCR
3.24

25
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Break-Even Analysis
It suggests the level of capacity utilization,which the unit must attain in order to avoid any loss.
Particulars
Ist
2nd
3rd
4th
5th
6th
7th
A)
Sales
582578
582578
582578
582578
582578
582578
582578
B)
Variable cost
Raw material
242164 242164 242164 242164 242164 242164 242164

206295 206295 206295 206295 206295 206295 206295
Utilities
1800
1800
1800
1800
1800
1800
1800
33818
33818
33818
33818
33818
33818
33818
251
251
251
251
251
251
251
C)
Contribution
340414 340414 340414 340414 340414 340414 340414
D)
Fixed costs
195712 206127 202546 198617 194297 179170 173912
Interest Payments
12987
23703
20392
16707
12606
8042
2962
Depreciation on Equipment
2511
2259
2034
1830
1647
1482
1334
Depreciation on Miscellaneous Assets
500
450
405
365
328
295
266
Ammortization of Expenses
10365
10365
10365
10365
10365
Salary & Wages
90000
90000
90000
90000
90000
90000
90000
General Expenses (80%)
79350
79350
79350
79350
79350
79350
79350
Depreciation on Building
E)
B-E Point (%)
F)
Avg.B-E Point (%)
57.49% 60.55% 59.50% 58.35% 57.08% 52.63% 51.09%

56.67%

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26

Dairy Farming

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Jammu and Kashmir Entrepreneurship Development Institute (JKEDI)

DETAILED PROJECT REPORT

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239www.jkedi.org

Jammu and Kashmir Entreprenuership Development Institute

Name of the Entreprenuer:

Name of Father /Spouse

Total Cost of Project :

Pay Back Period in Years:

Break Even Point:

Debt Service Coverage Ratio:

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

Common Management Practices Recommended for Dairy Farmers

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

A cultural background with a tradition of cattle keeping and milk consumption.

Australian Friesian Sahiwal

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu and Kashmir Entreprenuership Development Institute (JKEDI)

Economic Life of Cows

Local & Hybrid (Jersy or HF)

40 Sq.ft per Cow

One Calf a year

Every Five years at the rate of 20 Percent

3 Percent of Value of Ewe

Retained in Flock for growth of farm

20 Annual Manure Production

22 Rate of Culled Stock

23 Avg.Age at first Calving

26 Breeding Stock Development

27 Male calves Sold

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu and Kashmir Entreprenuership Development Institute

Term Loan A/c For Fixed Capital Investment

Cash Credit A/c for Working Capital Investment

Fixed Capital Estimate

Working Capital Estimate

Projected Profit & Loss Account for Six Years

Projected Cash Flow Statement for Six Years

Projected Balance Sheet for Six Years

Repayment Schedule for Six Years

Debt Service Coverage Ratio

Benefit Cost Ratio Estimate

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu and Kashmir Entreprenuership Development Institute

Tables & Chairs

Intererst during Moratorium

Jammu Campus: 0191-2474512/Kashmir Campus: 01933-224362/Ladhak Campus: 01982-252239

Jammu and Kashmir Entreprenuership Development Institute

Feed & Concentrate

Utilities & Upkeep

Wages & Salaries

Minerals & Salts

Mineral & Salts

Total Dry Fodder Consumpton