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Farming For Meat And Wool

Introduction

NABARD, as an apex development bank in the country has always been keen on
promoting projects based on innovative technologies, which can accelerate capital
formation in the rural areas in the agricultural and allied sectors as also in the non farm
sector. Agro-processing activities, specially in the thrust areas of livestock and dairy
products, fruits and vegetables, fisheries with accent on export are being promoted by
NABARD on priority basis through appropriate policy initiatives. Brochures on model
bankable projects, which have high export potential, such as tissue culture, green house
cultivation, Individually Quick Frozen shrimps etc. have been brought out for the use of
banks, entrepreneurs and other agencies which are keen on promoting such projects.
This booklet has been brought about for the first time and may help entrepreneurs for
taking up the activity as a commercial enterprise through bank credit.

The present Model Project for Sheep Farming is yet another venture in this direction.

Scope for Sheep Farming and Its National Importance

1. The country has 50.80 million sheep as per 1992 livestock census and
ranks sixth in the world. The statewise sheep population are given in
Annexure I. Wool production, however, stands at the modest level of
44.26 million kgs. The export earnings from different woollen products
during 1994-95 was Rs.25773 million. The contribution of sheep to total
meat production in the country is around 14 percent. The contribution of
sheep through export of meat is 8 percent of the total export value of
agricultural and processed food products. Live sheep are also exported
for meat purpose. Sheep skin in the form of leather and leather products
is also exported.
2. Sheep contribute to the livelihood of the economically weaker sections of
the society. Amongst the livestock owners the shepherds are the poorest
of the lot.
3. Realising the importance of sheep in Agrarian economy the Central
Government had established the Central Sheep and Wool Research
Institute (CSWRI) at Avikanagar in Rajasthan. Number of sheep breeding
farms were established during various plan periods throughout the
country for evolving (I) new fine wool breeds for different agro-climatic
regions capable of producing 2.5 kg. of greasy wool per annum, (ii) new
mutton breeds capable of attaining 30 kg. live weight at 6 months of age
under intensive feeding conditions. Sheep development activities were
initiated under DPAP, MAFAL and SFDA programmes. Intensive Sheep
Development Projects (ISDP’s) were introduced in many of the sheep
rearing districts. Setting up of wool boards in important wool producing
states was envisaged and States of Jammu & Kashmir and Karnataka
have already set up these boards. Some of the states have set up wool
development corporations / federations. The states having such
organisations are given in Annexure II.

Financial assistance available from banks / NABARD for sheep farming

1. NABARD is an apex institution for all matters relating to policy, planning


and operation in the field of agricultural credit. It serves as refinancing
agency for the institutions providing investment and production credit for
agriculture and rural development. It promotes development through a
well organised Technical Services Department at the Head Office and
Technical Cells at each of the Regional Offices.
2. 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 or Regional Rural
Sheep Farming For Meet And Wool

Introduction

NABARD, as an apex development bank in the country has always been keen on promoting projects
based on innovative technologies, which can accelerate capital formation in the rural areas in the
agricultural and allied sectors as also in the non farm sector. Agro-processing activities, specially in
the thrust areas of livestock and dairy products, fruits and vegetables, fisheries with accent on export
are being promoted by NABARD on priority basis through appropriate policy initiatives. Brochures on
model bankable projects, which have high export potential, such as tissue culture, green house
cultivation, Individually Quick Frozen shrimps etc. have been brought out for the use of banks,
entrepreneurs and other agencies which are keen on promoting such projects. This booklet has been
brought about for the first time and may help entrepreneurs for taking up the activity as a commercial
enterprise through bank credit.

The present Model Project for Sheep Farming is yet another venture in this direction.

Scope for Sheep Farming and Its National Importance

1. The country has 50.80 million sheep as per 1992 livestock census and ranks sixth in
the world. The statewise sheep population are given in Annexure I. Wool production,
however, stands at the modest level of 44.26 million kgs. The export earnings from
different woollen products during 1994-95 was Rs.25773 million. The contribution of
sheep to total meat production in the country is around 14 percent. The contribution
of sheep through export of meat is 8 percent of the total export value of agricultural
and processed food products. Live sheep are also exported for meat purpose. Sheep
skin in the form of leather and leather products is also exported.
2. Sheep contribute to the livelihood of the economically weaker sections of the society.
Amongst the livestock owners the shepherds are the poorest of the lot.
3. Realising the importance of sheep in Agrarian economy the Central Government had
established the Central Sheep and Wool Research Institute (CSWRI) at Avikanagar
in Rajasthan. Number of sheep breeding farms were established during various plan
periods throughout the country for evolving (I) new fine wool breeds for different agro-
climatic regions capable of producing 2.5 kg. of greasy wool per annum, (ii) new
mutton breeds capable of attaining 30 kg. live weight at 6 months of age under
intensive feeding conditions. Sheep development activities were initiated under
DPAP, MAFAL and SFDA programmes. Intensive Sheep Development Projects
(ISDP’s) were introduced in many of the sheep rearing districts. Setting up of wool
boards in important wool producing states was envisaged and States of Jammu &
Kashmir and Karnataka have already set up these boards. Some of the states have
set up wool development corporations / federations. The states having such
organisations are given in Annexure II.

Financial assistance available from banks / NABARD for sheep farming

1. NABARD is an apex institution for all matters relating to policy, planning and
operation in the field of agricultural credit. It serves as refinancing agency for the
institutions providing investment and production credit for agriculture and rural
development. It promotes development through a well organised Technical Services
Department at the Head Office and Technical Cells at each of the Regional Offices.
2. 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 or Regional Rural 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.
3. For sheep development schemes with very large outlays, detailed reports will have to
be prepared. The beneficiaries may utilise the services of Agricultural Finance
Corporation (AFC) or consultants having experience in developing livestock projects
for preparation of the project report to avail the

bank loan for the items such as purchase of breeding animals,construction of sheds,
purchase of equipments etc. The cost of land is not considered for loan. However, if
land is purchased for setting up a sheep farm its cost can be treated as margin
money of beneficiary.

CASH FLOW ANALYSIS

YEARS
PARTICULARS I II III IV V VI
I. COSTS : 11000

a. Capital cost - - 600 - 600 -


b. Purchase of ram
c. Feed cost 42 40 52 54 58 60

i. Grazing 337 315 427 450 472 495


ii. Concentrate
424 404 524 544 584 604
a. Insurance cost
b. Veterinary aid 252 240 312 324 348 360

c. Shearing charges 50 64 76 85 90 95
Total cost 11000 1105 1063 1991 1457 2152 1614
II. BENEFITS : 756 1152 1278 1350 1422

a. sale of wool - 954 3000 4500 4000 5000


b. sale of ram lambs
c. sale of culled animals 756 3000 3100 3000 4900 4800
d. penning charges
- 936 972 1044 1080
e. closing stock value
720 27200
Total benefits 1512 4674 8188 9750 11294 39502
IV. REPAYMENT 407 3611 6197 8293 9142 10688
SCHEDULE
10500
a. Gross surplus
b. Loan amount 12% 1411 1364 1156 797 345
c. Interest rate
d. Interest 1260 394 1730 2990 3774 2872
e. Principal
f. Repayment @ 50% of
a - 1805 3094 4146 4571 3217*

- 1806 3093 4147 4571 7471


g. Net surplus
-
* Only balance amount

Leading Terms and Requirements

Interest Rate

As per the RBI guidelines the present rates of interest to the ultimate beneficiary financed by various
agencies are as under.

(As on 1 July 1998)

Particulars CB’s & RRB’s SLDB/SCB

a. upto and 12.0% As determined by SCB/SLDB subject to Min.


inclusive of of 12% (for all loan slabs)
Rs.25,000.
b. Over Rs.25,000 -do-
and upto RS.2 13.5%
lakhs -do-
as determined by
c. Over Rs.2.0 CB/RRB
lakhs

Margin Money

NABARD has defined the farmers into three different categories and where subsidy is not available
the minimum down payment to be contributed by the beneficiaries are given in the following table.

Sr. Category of Level of pre-development Beneficiary’s

No. Farmer return to resources Contribution

a) Small farmers Upto Rs. 11,000 5%

b) Medium farmers Rs. 11,001 to 10%

c) Large farmers Rs. 19,250 15%

Above Rs. 19,251

Security

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

Repayment Period of Loan

Repayment period depends upon the gross surplus generated. The loans will be repaid in suitable
half yearly / annual installments usually within a period of about 5-6 years with a grace period of one
year.

(Source-Sheep Farming For Meat and Wool,NABARD)


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