Poultry Farmers are raising chickens under contract for Big Groups of Poultry processing companies/Feed millers/Integrator. This type of relationship works well for both the Poultry farmers and the company. In this System Poultry processing companies/Feed millers/Integrator provide the Chicks, Feed, and technical advice along with some other facilities.
On the other hand poultry farmers provide the Labor,Poultry Shed and management service. This is a better opportunity for both and other benefit is it helps to maintain affordable prices for consumers.Because in Contract farming , big groups has big capacity and deeper technical knowledge , which results in higher production in less input as compare to small poultry farmers.If some one do the poultry farming business in small scale, he will have dependency on others for each and every thing. For chicks poultry farmers depend on Hatcheries’ owner. For Feed requirement Poultry farmers depend on Feed millers. This leads to higher cost.
But in contract farming Chicks, Feed, and technical advice given by big groups resulted in better management and less costing of Poultry birds.
The other benefit is the big group can maintain the required parameters required by any government like no effect of Antibiotic or Anticoccidials in chicken.Resulting better quality of chicken.
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Contract farming provides better linkage among production, processing, and marketing, Banks provide credit to support and facilitate Poultry Farmers for construction of the shed .
All the parameters and contract is based upon management and other aspects.Each and every company has different parameters . It’s better to clearly understand every aspect.
What are the benefits of contract farming for farmers?
Contract farming saves the farmer from the risk of changing market prices for chicken. And the main aspect is no investment for chicks, Feed and also give a guarantee of earning.
Now the question arises here how long Contracts are done with poultry farmers?
Contracts with farmers are generally one year or longer.
How are the Poultry Farmers paid for contract farming?
Poultry farmers with written contracts, detailing how payments will be calculated and when to be paid.
Poultry farmers are mainly paid for how well they serve their responsibility of management to poultry‘s birds.
The good management by poultry farmers has a direct impact on weight gain and less disease and mortality.
This is an incentive based system which effectively rewards poultry farmers and motivates the farmers for better management.
How much money does a farmer make in Contract Farming?
It depends on company to company and region wise.
Some areas where temperature is very less. Cost of Brooding is higher than other areas.
I will give you an idea of India. It is not exact but you can get an idea by this.
Profit-In Contract farming – Rough Idea
You will be paid 6-8 rupees per kg. Example if you do contract farming of 10,000 birds and the bird weighs an average 2.5 kg then total weight around or less than 25000 Kg multiply by 6.
Mean Around or less than input will be Around Rs 150,000 and 5 cycles in a year, you can expect from contract farming. Yearly Output around 7,50,000.
But it requires your own farm and your own electricity( You will have to pay electricity bill and brooding cost will also suffer by you, after bird’s lifting litter(Finally the converted manure) is yours and you can sell it it can easily cover your brooding cost in summer. In winter brooding cost is extra. Contract Farming is Always in profit either less or more because some parameters are there depending on your management and others.( It is mandatory that the farm must be your or belong to you.