A Proposal on:

ECONOMIC ANALYSIS OF POULTRY PRODUCTION IN CHITWAN, NEPAL

Principal researcher: Rakesh Bhujel

Permanent Address: Kerabari-09, Morang
Email: bhujelrakesh199@gmail.com
Responsible Institution: Agriculture and Forestry University, Rampur, Chitwan
Major Supervisor: Assoc. Prof. Dr. Rishi Ram Kattel
Department of Agricultural Economics and Agribusiness
Management
Agriculture and Forestry University
Rampur, Chitwan
Type of Research: Survey
Site of Study: Bharatpur, Chitwan
Study of Duration: Chaitra-2080 to Asar-2081
Expected Cost: Rs. 36,200
Table of Contents
1. Introduction..............................................................................................................................5
1.1 Background............................................................................................................................5
1.2 Statement of Problem.............................................................................................................5
1.3 Rationale of Study..................................................................................................................5
1.4 Objectives...............................................................................................................................6
1.4.1 General objective:............................................................................................................6
2. Literature Review.....................................................................................................................6
2.1 Nutritional importance of poultry:.........................................................................................6
2.2 Poultry population in Nepal...................................................................................................7
2.3 Poultry population in Chitwan district...................................................................................7
2.4 Meat and egg production in Nepal.........................................................................................7
2.5. Meat and egg production in Chitwan....................................................................................7
3. Research Methodology.............................................................................................................7
3.1 Selection of study area...........................................................................................................7
3.2 Sample and Sampling Technique...........................................................................................8
3.3 Sample Size Estimation Procedure........................................................................................8
3.3 Primary data...........................................................................................................................9
3.4 The Preliminary survey..........................................................................................................9
3.5 Questionnaire Survey.............................................................................................................9
3.6 Focus Group Discussion........................................................................................................9
3.7 Key Informant Interview........................................................................................................9
3.8 Questionnaire Development and Pretesting...........................................................................9
3.9 Secondary data.......................................................................................................................9
3.10 Data Processing and Analysis............................................................................................10
3.11 Economic Analysis............................................................................................................10
3.12 Indexing.............................................................................................................................10
4. Expected Outcomes..............................................................................................................10
5. Beneficiaries.........................................................................................................................11
6. Gant Chart...........................................................................................................................11
7. Budgeting............................................................................................................................12
8. References...........................................................................................................................13
1. Introduction
1.1 Background
Nepal is an agricultural country where it contributes about 24.1% to the country's GDP (MOF,
2022/23). In Nepal, poultry farming is a vital component of agriculture, which generates roughly
3.5% of the country's GDP(Yadav & Yadav, 2020). Raising animals at high densities in captivity
to produce meat and eggs is known as poultry farming.(Ray and Pradhan, 2011). Nepal's terrain
and climate are diverse, and because of small landholdings, poultry farming is practiced in all
regions in small numbers. (Pradhanang et al., 2015). In terms of global production of chicken
meat, Nepal is ranked 112th, whereas it is 92nd in terms of global production of eggs. The
standing population of fowl in Nepal is 7341807 (MOALD, 2022). According to data from
2021–2022, the output of poultry meat is 65,387 tons, and it is increasing at an average annual
rate of 6.60% (Adhikari et al., 2023). One of the most significant sources of protein in
developing nations like Nepal is poultry meat. (Adhikari et al., 2023). The quickest option to
significantly increase the supply of protein in the shortest amount of time is through poultry
production. There is a massive imbalance between the supply and demand for animal protein
consumption. (Adhikari et al., 2023). According to FAO recommendations, an average
individual should consume 65 grams of protein per day, of which 36 grams should come from
animal sources. (FAO, 2009).

1.2 Statement of problem

Poultry has significant benefits over other enterprises because of its low-cost protein source,
short generation interval, and complementing role in other farming systems (Poudel et al., 2020).
Despite the great potential of poultry production, several obstacles in the areas of commerce,
marketing, health, good sanitation, and management are making production inefficient (Dhakal
et al., 2019). According to Sharma (2010), feed and treatments account for more than 75% of
production costs. Importing chicken feed supplements costs an average of Rs. 1.8 billion
annually (Singh, 2018). The poultry sector faces additional challenges, including lower egg yield
and increased bird mortality owing to infectious disease outbreaks (Osti et al., 2017). Lack of
market price regulation based on production costs leads to changing market values for chicken
eggs and meats, causing significant economic strain for farmers (Acharya and Kaphle, 2015).
The lower cost of producing chicken in India, the open border, the lack of official regulations
and quarantine facilities, and other factors contribute to the smuggling of poultry and poultry
products into Nepal. This unauthorized import leads to unfavorable competition with the
domestic production system while increasing the risk of spreading various poultry microbes
(Adhikari et al., 2023).

1.3 Rationale of study

The rationale for this study stems from the critical role poultry farming plays in Nepal's
agricultural sector and its significant contribution to the country's GDP and protein supply. In
Bharatpur Metropolitan City, Chitwan, where poultry farming is a vital economic activity, there
are pressing issues related to high production costs, fluctuating market prices, and disease
outbreaks that impact profitability and efficiency. This research aims to provide a detailed
economic analysis by assessing production costs, profitability, and market conditions, thereby
offering insights into the financial viability of poultry farming. By identifying key challenges
such as the high cost of feed, price volatility, and competition from smuggled poultry products,
the study will help in formulating targeted solutions. The SWOT analysis will further illuminate
the strengths, weaknesses, opportunities, and threats facing poultry enterprises, aiding in
strategic decision-making. The findings will be crucial for policymakers, farmers, and investors,
offering evidence-based recommendations to enhance productivity, reduce costs, and improve
market access. Additionally, the study will contribute to the existing body of knowledge and
support sustainable development goals by addressing cost inefficiencies and promoting resilient
farming practices. Engaging with key stakeholders and providing actionable insights will ensure
that the research addresses real concerns and fosters practical solutions, paving the way for
future research and development in the poultry

1.4 Objectives
1.4.1 General objective:
 The general objective of the study is an economic analysis of poultry production in
Chitwan
1.4.2 Specific objective:
 To assess the production cost and gross return of poultry production across different
scales of production in the study area
 To examine the profitability of poultry farms through gross margin analysis in the study
area
 To identify the marketing channel and market situation of poultry products in the study
area
 To analyze strengths, weakness, opportunities and threats (SWOT) of poultry enterprise

2. Literature Review

2.1 Nutritional importance of poultry:

Consuming chicken meat daily has been linked to several advantageous nutritional outcomes
(Millen et al., 2014). The protein content of raw and cooked poultry meat is given below:
Type of meat Chicken Protein Content (g/100 g)
Whole with skin, raw 18.6
Whole skinless, raw 21.4
Whole, with skin, cooked 27.3
Whole, skinless, cooked 28.9
Data from the USDA National Nutrient Database for Standard Reference, Release 28 (2015).
An interesting nutritional characteristic of poultry meat is the high content of long-chain n-3
polyunsaturated fatty acids (n-3 LC-PUFA) (Bordoni & Danesi, 2017).
The energy content of poultry meats is generally comparable to other meats, however it differs
depending on whether the skin is present or not (Bordoni & Danesi, 2017). Eggs can provide
valuable nutrients as part of a balanced diet. The nutritive value of an egg is given below:
Egg content per Energy (kcal) Protein (g) Fat (g) Carbohydrate (g)
50g
Whole egg 85 6.75 6 0.3
Egg albumin 29 6.4 0.15 0.35
Egg yolk 181 8.05 15.85 0.15
Source: Rodler

2.2 Poultry population in Nepal

The poultry population of Nepal over the last 5 fiscal years is given below:
Category 2016/17AD 2017/18AD 2018/19AD 2019/2020AD 2020/21AD
Fowl 7007151 72245732 75709330 82598879 73418077
Duck 394775 404670 416400 427226 432226
Laying hen 12388889 12517558 12526979 12927842 11374011
Laying duck 183940 186912 190747 191701 220532
Source: Livestock statistics of Nepal 2077/78
2.3 Poultry population in Chitwan district
The standing population of fowl and duck in the Chitwan district is 18875631 and 14252
respectively (MOALD, 2022).
2.4 Meat and egg production in Nepal
Category 2016/17AD 2017/18AD 2018/19AD 2019/2020A 2020/21AD
D
Meat production 57268 60122 62899 255001 226959
(mt.) of chicken
Egg production hen 1338312 1498024 1534680 1604526 1475620
Source: Livestock statistics of Nepal 2077/78
2.5. Meat and egg production in Chitwan
The total meat production in the Chitwan district is 61426mt, out of which 56720mt is from
chicken (MOALD, 2022). The total egg production in the Chitwan district is 541142000 out of
which hen contribute 540590000 (MOALD, 2022).
3. Research Methodology
3.1 Selection of study area
Chitwan was purposively chosen for study since it is a hub for the polity sector. In the Chitwan
district, we will perform the survey in Bharatpur Metropolitan City.

3.2 Sample and Sampling Technique

For the data collection, stratified random sampling method will be used. 60 broiler farms and 90
layers farm will be interviewed.
3.3 Sample Size Estimation Procedure
The list of poultry farmers of the Bharatpur Metropolitan City was obtained from the
metropolitan office and various ward offices, and NPEA. 150 broiler farms and 900 layer farms
who had completed a production cycle by May 2024 will be considered as a sampling frame. The
population was stratified as
a) Layers Farm
I)Large (>5000)
II)Medium (2000-5000)
III)Small (less than 2000)
b) Broiler Farm
I)Large ((>2000)
II) Medium (1000-2000)
III) Small (>1000)
Equal amount of samples will be selected through disproportionate allocation from each strata.
Table 1. Sample size for different strata as layers and broilers farms.
Broiler Farm Sample Size Layers Farm Sample Size
Small 20 Small 30
Medium 20 Medium 30
Large 20 Large 30

3.3 Primary data

Primary data will be collected from the target groups through semi structured questionnaire
survey, meetings and direct interview. Other extra information will also be collected through
observation and group discussions.
3.4 The Preliminary survey
Poultry farms will be visited to investigate and understand the real scenario of the farmers. Visits
to different representatives of the poultry organization will be made before starting the interview
schedule. An informal talk on the status of poultry production and its trend analysis in the study
area will be conducted.
3.5 Questionnaire Survey
A survey will be conducted different areas of Bharatpur to make it as close representative of the
whole Metropolitan City during which series of questions will be asked to registered poultry
farmers to gather relating information to the topic of proposal. The questionnaire survey will be
focused on the overall economic aspect of the poultry farmers. Detailed information about the
demographic of the poultry farmers, their fixed cost, variable cost, revenue and challenges faced
by the them will be known. Farmers will be asked a set of close-ended questions.
3.6 Focus Group Discussion
2 Focus Group Discussions will be conducted during the study. Related stakeholders will be
called out for discussion so that information that couldn't be collected by the survey is obtained.
3.7 Key Informant Interview
Key personnel related to the poultry sector in the site will be interviewed to collect information
about poultry faring and its marketing. The responsible persons like District Livestock
Development Officer, cooperative leaders, and Progressive farmers will be interviewed.
3.8 Questionnaire Development and Pretesting.
Close-ended structured questions will be prepared which included questions related to the socio-
economic level, sources of livelihood, production variables, production practices, productivity,
market status, production and marketing constraints will be included. The prepared questionnaire
will be pretested in the vicinity of the study area with their similar characteristics, and the
research site and modifications to the questionnaire if required will be made based on that
pretesting and amendments and finalizing of the questionnaire was accordingly done. The
finalized questionnaire will then used for the survey in the actual research area.
3.9 Secondary data
The information related to poultry business production technologies, production constraints,
opportunities, production status and trends will be collected using various websites and journals
as the source of secondary data. The other sources included books, magazines, articles, and
poultry cooperatives.
3.10 Data Processing and Analysis
The collected data from poultry farmers, Private poultry farms, input suppliers and consumers
will be coded for analysis, tabulated and analyzed using MS-Excel, SPSS v25 and Statav14.20.
Qualitative data obtained from the field survey will be qualitatively analyzed using descriptive
analysis. The quantitative data will be analyzed using one-way ANOVA and chi2-test.
3.11 Economic Analysis
The economic analysis will be done as:
The total cost of production will be calculated as:
Total cost of production = Total fixed cost + Total variable cost
Total fixed cost =Summation of all fixed cost items (Land Rent, Equipment Cost)
Total variable cost Summation of all variable cost items.
Gross revenue= meat and egg sales manure sales
Gross margin= Gross revenue-Total variable cost
The B: C ratio will also be calculated to determine profitability of poultry farms.
Total(annualincome− production cost)
Benefit-Cost Ratio (BCR) = /
total production cost

Total benefit
=
Total Cost
3.12 Indexing
The forced ranking method will be used for ranking the problems related to poultry production
using following formula given by (Kothari, 2004)
∑ Si f i
I=
N
Where,
I= Priority index such that 0≤ I ≤1
SI= scale value of ith priority
FI= frequency of ith priority
N= Total number of observations

4. Expected Outcomes
 The present status of Poultry farming in Bharatpur Metropolitan City, Chitwan, Nepal.
 Profit analysis of Poultry farmers of Bharatpur Metropolitan City, Chitwan, Nepal.
 Various problems faced by the famers during Poultry farming.
 Various steps that can be taken to mitigate the problems faced by poultry farmers.

5. Beneficiaries
 The primary beneficiaries will be the local poultry farmers who are involved in this
study.
 The secondary beneficiaries will be Bharatpur Metropolitan City, development workers,
local government.
 The tertiary beneficiaries will be researchers, policymakers, students and other anyone
having interest in the topic.

6. Gant Chart
S.N. Activities Falgun Chaitra Baisakh Jestha Asadh Shrawan

1. Literature Review

2. Preliminary Field Visits

3. Problem Identification and Topic Selection

4. Proposal Preparation

5. Questionnaire Preparation

6. Pre-testing of Questionnaire

7. Primary data collection (HH survey, FGD, KII)

 8. Secondary data collection

9. Mid-term Report

10. Data entry, analysis and Interpretation

11. Final Report and Thesis Presentation

12. Manuscript Publication

7. Budgeting
S. N. Particulars Estimated Cost
1 Literature Review 1,200

2 Preliminary Survey 1,500

3 Questionnaire Preparation 1,000
4 Pre-testing of questionnaire 1,500
5 Data Collection
 Transportation and Communication
 Stationery, Photocopy and Utilities 3500
 Miscellaneous 1,600
2,000

6 Focus Group Discussion

 Lodging and Foods
 Transportation and Communication 1,000
 Stationery, Photocopy and Utilities 1,000
 Snacks 700
 1,500
7 Data Entry and Data Analysis 2,500
8 Report writing, Printing and Binding 8,000
9 Miscellaneous 4,000
Sub-Total 31,000
Contingency @10% 3,500
Overhead @5% 1,700
Total 36,200

8. References

Abhijit Ray and R. K. Pradhan. (n.d.). Poultry Farming Overview.

Adhikari, S., Awasthi, P., Bogati, S., & Singh, S. (2023). A REVIEW OF AN ECONOMIC
ANALYSIS OF POULTRY MEAT PRODUCTION IN NEPAL. Malaysian Animal Husbandry
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FAO (Ed.). (2009). Livestock in the balance. FAO. I0680e.pdf. (n.d.).
Pradhanang, U. B., Pradhanang, S. M., Sthapit, A., Krakauer, N. Y., Jha, A., & Lakhankar, T.
(2015). National Livestock Policy of Nepal: Needs and Opportunities. Agriculture, 5(1), Article
1. https://doi.org/10.3390/agriculture5010103
Yadav, R. K., & Yadav, R. (2020). A REVIEW OF POULTRY POPULATION, PRODUCTION
(EGG AND MEAT) AND DISTRIBUTION IN NEPAL. Food & Agribusiness Management,
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Poudel, U., Dahal, U., Upadhyaya, N., Chaudhari, S., & Dhakal, S. (2020). Livestock and
poultry production in Nepal and current status of vaccine development. Vaccines, 8(2), 322.
Dhakal, R., Josh, B., Bhusal, S., & Acharya, B. (2019). A review of scenario, challenges and
prospects of poultry production in Nepal. Malaysian Journal of Sustainable Agriculture
(MJSA), 3(2), 60-63.
Banshi Sharma, B. S. (2010). Poultry production, management and biosecurity measures.
Singh, S., & Ram, S. K. (2018). Overview of Nepalese Poultry Industry.
Osti, R., Bhattarai, D., Chaudhary, H., & Singh, V. (2017). Poultry production in Nepal:
characteristics, productivity and constraints. International Journal of Applied Sciences and
Biotechnology, 5(2), 222-226.
Krishna prasad Acharya, & Kahle, K. (2015). Major Issues for Sustainable Poultry Sector in
Nepal: A REVIEW. Global Journal of Animal Scientific Research, 3(1), 227–239.
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American Heart Association/American College of Cardiology Guideline on Lifestyle
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