Sheep Farming

Introduction

Sheep with its multi-facet utility for wool, meat, milk, skins and manure, form an important component of rural economy particularly in the arid, semi-arid and mountainous areas of the country. It provides a dependable source of income to the shepherds through sale of wool and animals. The advantages of sheep farming are:

• Sheep do not need expensive buildings to house them and on the other hand require less labour than other kinds of livestock.
• The foundation stock are relatively cheap and the flock can be multiplied rapidly.
• Sheep are economical converter of grass into meat and wool.
• Sheep will eat varied kinds of plants compared to other kind of livestock. This makes them excellent weed destroyer.
• Unlike goats, sheep hardly damage any tree
• The production of wool, meat and manure provides three different sources of income to the shepherd.
• The structure of their lips helps them to clean grains lost at harvest time and thus convert waste feed into profitable products.
• Mutton is one kind of meat towards which there is no prejudice by any community in India and further development of superior breeds for mutton production will have a great scope in the developing economy of India.

Scope for Sheep Farming and its National Importance

The country has 65.069 million sheep as per 2012 livestock census and ranks sixth in the world. The contribution of sheep through export of meat is 8 per cent of the total export value of agricultural and processed food products. Sheep skin in the form of leather and leather products is also exported. Sheep make a valuable contribution to the livelihood of the economically weaker sections of the society. Amongst the livestock owners the shepherds are the poorest of the lot.

Financial assistance for sheep farming

Loan from banks with refinance facility from NABARD is available for starting sheep farming. For obtaining bank loan, the farmers should apply to the nearest branch of a Commercial, Co-operative, Regional Rural Bank or small finance bank, in their area in the prescribed application form which is available in the branches of financing bank. The Technical officer attached to or the Manager of the bank can help / give guidance to the farmers in preparing the project report to obtain bank loan. For sheep development schemes with very large outlays, detailed reports will have to be prepared. For high value projects, the borrowers can utilise the services of NABARD Consultancy Services (NABCONS) who are having wide experience in preparation of Detailed Project Reports.

Scheme Formulation

A scheme can be prepared by a beneficiary after consulting local technical persons of State Animal Husbandry Department, Sheep Development Corporation, Sheep Co-operative society / union / federation and commercial farmers. If possible, the beneficiaries should also visit progressive sheep farmers and government / agricultural university Sheep farms in the vicinity and discuss the profitability of sheep farming. A good practical training and experience in sheep farming will be highly desirable. The sheep co-operative societies established in the villages as a result of efforts by the Animal Husbandry/Sheep Development Department of State Government / Sheep Development Board would provide all supporting facilities, particularly marketing of live animals and wool.

Beneficiary may undertake a training prohgramme on Sheep farming regularly organized by Central Sheep & wool Research Institute, Avikanagar, Po malpura, District- Tonk, Rajasthan-304501.

Requirements of a Good Project

The project should include the following information on technical, financial and managerial aspects in detail based on type of unit and capacity.

Technical:

• Nearness of the selected area to veterinary centres and wool collection centre and the financing bank's branch
• Availability of good quality animals in nearby livestock markets
• Source of training facilities.
• Availability of good grazing ground / lands.
• Availability of green/dry fodder, concentrate feed, medicines etc.
• Availability of veterinary aid and marketing facilities near the scheme area.

Financial:

• Unit Cost - The average cost of Sheep unit.
• Input cost for feed and fodder, veterinary aid, insurance, etc.
• Output costs i.e. sale price of animals, penning etc.
• Income-expenditure statement and annual gross surplus.
• Cash flow analysis.
• Repayment schedule i.e. repayment of principal loan amount and interest.

Appraisal of the project

The project so formulated considering the above mentioned aspects should be submitted to the nearest branch of the bank for availing credit facility for establishment of the sheep farm. The bank will then examine the project for its technical feasibility, financial viability and bankability.

Sanction of Bank Loan and its Disbursement

After ensuring technical feasibility and financial viability, the scheme will be sanctioned by the bank. The loan is disbursed in stages against creation of specific assets such as construction of sheds, purchase of equipments and animals. The end use of the loan is verified and constant follow-up is done by the bank.

Lending Terms - General

Outlay: Outlay of the project depends on the local conditions, unit size and the investment components included in the project. Prevailing market prices / cost may be considered to arrive at the outlay.

Margin Money: Margin depends on the category of the borrowers and may range from 10% to 25%.

Interest Rate: Banks are free to decide the interest rates within overall RBI guidelines. However, for working out financial viability and bankability of model project, the rate of interest is assumed at 12.00% p.a.

Security: Security will be as per RBI / NABARD guidelines issued from time to time.

Repayment of loan: The loan repayment is determined, on the basis of gross surplus generated in the project. Usually the repayment period of loan for sheep farming is 6 to 8 years.

Insurance: The animals and other assets (shed, equipment) may be insured.

Economics of Sheep Farming: A model economics for sheep farming with a unit size of 100 sheep is given below. This is indicative and the applicable input and output costs and the parameters observed at the field level may be incorporated.

To know about Project Cost, Techno-economic Parameters and Cash flow statement Click here

Source: NABARD