Davangere - ADS- Sheep Rearing - 2018-2023

INDEX

Page No
Sl. No Particulars
From To

1 Introduction 1 2

2 Forward and backward linkages - Objectives 3 3

3 Selection of the Area 3 3
4 Selection of beneficiaries 4 4
5 Training/Capacity building of the beneficiaries 4 4
6 Techno Economics assumptions 4 4
8 Partners in Implementation 4 4
7 Project Cost for each unit/activity 4 5

8 Financing Agencies 5 5
9 Physical and Financial Programme 5 8
10 Financial Analysis 8 8
11 Sensitivity and SWOT analysis 8 9
12 Lending Terms 9 9
13 Repayment Period 9 10
14 Implementation Strategy 10 10
 Davangere - ADS- Sheep Rearing - 2018-2023

Sheep Rearing and Breeding in Harapanahalli and Jagalur taluks

1. Introduction
Davanagere district has a total geographical area of 5975.97 sq.km of which 15% is
covered by forests. Agriculture being the predominant economic activity with 72%
SF/MF with an average land holdings size of around 1 ha. The sources and economy
of the district is mainly dependent on agriculture as more than 70% of the population
is directly or indirectly engaged in agriculture. The important cereal crops grown in
the district are maize, paddy, jowar and ragi under cereals, tur and horse gram under
pulses, groundnut and sunflower under oilseeds, cotton, tobacco and sugarcane under
cash crops during kharif and whereas in rabi major crops are jowar, wheat, cotton,
sunflower, etc. About 38 % of land holdings in the district are less than 1.0 ha and
large chunk of farming community is underemployed. Addition to the animal
Husbandry, Sheep farming is a significant subsector to agriculture, which is playing a
pivotal role in the rural economy providing gainful employment to a large number of
SF/MF and enhancing their economic statue. Besides providing supplemental income,
dependability even during drought times is one aspect that makes the livestock activity
more lucrative and progressive. Further agro climatic conditions of the district are
suitable for dairy occupation.
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.

The Sheep is a multi-purpose animal producing meat, milk, hide, fibre and manure. In
hilly areas, Sheep are also used for hauling light loads. Sheep have very few
demands of housing and management. They hardly need separate housing and happily
share their homes with their owners or his other livestock. Sheep can be raised by
landless agricultural labourers, ladies and children because they can thrive well on
variety of leaves, shrubs, bushes, kitchen waste etc. Sheep farming can be a
profitable occupation for a farmer and can fit well into mixed farming. Sheep are
cheaper to maintain, easily available and have a friendly disposition. Sheep are
capable of adapting to various agro-climatic conditions ranging from arid dry to cold
arid to hot humid. They can be raised in plains, hilly tracts, sandy zones and at high
altitudes. Sheep are more tolerant to hot climate than other farm
animals. Sheep suffer from fewer ailments than other large animals. Sheep
give more production per unit of investment. Sheep are smaller in size and have a
younger slaughter age. Sheep meat has no religious taboo and is relished by all
sections of society.

Sheep hide is used for the manufacture of leather products. Sheep hairs are used for
the manufacture of rugs and ropes. Sheep manure is 2.5 times richer in nitrogen and
phosphoric acid than cow manure. Sheep form an excellent animal for physiological
and biomedical research.

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 Davangere - ADS- Sheep Rearing - 2018-2023

Objectives of Area Development Scheme – Sheep Rearing/Breeding

The objectives of the project are as under :
 As a means of supplementary income to agriculture;
 As means of self employment;
 To increase meat production in the project area;
 To facilitate availability of dressed meat by increasing meat production with
backward and forward linkages.

Sheep rearing/breeding activity is important supplementary activity for small and

marginal farmers as it provides sustained income. Dependability of farmers during
drought times has made this activity more attractive and progressive. These measure
will facilitate the farmers income security and enhance the income to the next level.
The small and marginal farmers in the district grow one or two crops in a year and
have no supplemental activity for sustaining the livelihood. The district is dependent
on rainfall and in the event of less rainfall, the farmer is left with no activity/source of
income. Therefore, Sheep and Goat rearing/breeding as secondary activity would
provide sustained income to the farmers. There is adequate demand for meat and
processed meat in the district. In view of the above, Area Development Scheme for
Sheep and Goat rearing/breeding activity is planned in the district.
Davanagere district has 3,43,178 Nos of sheep population contributing 3.58% of state’s
sheep population. Out of 6 taluks, Sheep farming is predominant in Harapanahalli
and Jagalur taluks. Of the total, these two taluks contribute around 68% of sheep
farming in the district.
Some people want to raise both goat and sheep together. Both of this two smaller
livestock animals are mainly raised for their wool, hair or pelts, milk and meat
production. Among the animals which humans have domesticated, sheep and goats
were the first. And still now, both of this two small species are among the most popular
livestock animals. 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. The production
of wool, meat and manure provides three different sources of income to the shepherd
and doubles the income of the farmers.
Hence, it is more suitable for dry lands and also for small/marginal farmers and the
Area Development Scheme to develop sheep farming sector is preferred which is more
effectively suitable for Harapanahalli and Jagalur taluks of Davanagere district.
According to Livestock census 2012, Sheep population of the identified
taluks are as under:
Veterinary
Cross Villages to
Taluk Indigenous Dispensary in Nearest Bank Branches
bred be covered
two blocks

Harapanahalli 166180 11 15 31 All CBs, RRBs and

Jagalur 65908 20 15 19 DCCBs

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 Davangere - ADS- Sheep Rearing - 2018-2023

2. Forward and Backward linkages

a. Veterinary Institutions :
The Institute of Animal Health and Veterinary Biological extends diagnostic facilities
to the farmers through its Regional Animal Disease Diagnostic Laboratories and
Information Center(ADDL&IC) located at Davanagere head quarters. The Institute is
also engaged in research pertaining to animal health. The thrust areas in research are
development of newer vaccines, innovations in production technology, development
of molecular disease diagnostic techniques and development of field diagnostic kits.
Emphasis is also laid on studying factors influencing disease processes and mechanics.

Animal Husbandry and Veterinary Science (AHVS) conducts health camps, artificial
insemination, first aid at village level at regular intervals. 200 Veterinary Institutions
in the district provide veterinary services i.e. 19 Veterinary Hospitals, 72
Dispensaries, 19 arificial insemination centers and 84 Primary Veterinary Centers. In
addition, 6 Mobile Dispensaries also function in the district. Above Institutions are
sufficient to take care of the health of the sheep and goat population in the district.

b. Feed and Fodder development

Fodder Development Scheme: Fodder mini kits, root slips to encourage farmers to
grow perennial fodder - Subsidy of `3000 and farmer contribution of Rs.3000 in 10
guntas and Rs.12500/- (50%) is extended to farmers who come forward for setting of
fodder museum in 1 acre of land with 10 varieties of fodder.

c. Meat and Wool Marketing infrastructure

Meat production in the district has reached is 5,147 Metric-tons per year. Around 72
registered Sheep meat outlets are functioning in the district covering all 6 taluks. The
meat is marketed to Hotels, Restaurants, Dhaabas, neighbouring taluks and local
customers. Meat and wool processing infrastructure is unorganized which needs to be
strengthened. Similarly meat/wool processing infrastructure is to be provided in the
district. Sheep farming provides a good source of income and has good potential in the
district even in future days.

d. Area for implementation of the scheme

Sheep rearing activity is an activity taken up by interested small and marginal farmers,
landless labourers. These farmers should have adequate grazing land and fodder
availability. Harapanahalli taluk and Jagalur taluk of Davanagere district are
preferred for taking up the Sheep farming activity.
3. Selection of the Area
The sheep population in 6 taluks of Davanagere district are 3.43 lakh comprising both
Indigenous and 167 cross breed sheep. The area selected in the district for sheep
farming are Harapanahalli and Jagalur taluks. These two taluks offers excellent scope
for sheep farming as these two taluks receive less rainfall and has good hilly ranges
which is more suitable for Sheep rearing. The following villages in 2 taluks of the
district are selected for the area development scheme. The existing Indigenous and
Crossbred sheep population in two taluks, viz., Harapanahalli and Jagalur taluks of
Davanagere and availability of veterinary care, procurement network and branch
network for these villages are indicated below:

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 Davangere - ADS- Sheep Rearing - 2018-2023

4. Selection of beneficiaries
The farmers who owns marginal land or landless labour prefer to go for a sheep rearing
of about 10+1 sheep. Farmers who can afford to allocate a part of their land for
exclusive sheep breeding units do prefer to go for bigger units of size 100+5 sheep.
5. Training/Capacity building of the beneficiaries
Training for the beneficiaries is available from Animal Husbandry and Veterinary
Dept, Krishi Vignana Kendra, RSETI, NGOs, Karnataka Sheep and Wool
Development Corporation Ltd., Karnataka Sheep and Wool Products Development
Board, etc., is being provided to educate and maintenance of the sheep farm shall
carryout marketing of sheep and sheep products, organize
scientific sheep husbandry training camps, provide mechanical wool shearing
facilities etc.
6. Techno Economics assumptions : Sheep have a very important place in
rural economy as they provide wool, meat, milk and skin. They are reared in all the
States of India but are mostly suitable for rearing in the arid, semi-arid and
mountainous areas. It is a source of income to low income groups particularly
shepherds. A model economics for sheep farming with a unit size of (10+1) and
(100+5) sheep is suitable in the district.

 Minimum unit size is 10+1 animals

 Depending upon the interest and resources of the farmers, multiple units can
be considered.

Source of animals
 The animals may be purchased within or outside the district wherever best
breeds and good number of animals are available.

 The availability of sheep in Davanagere are recognized breed of Sheep are:

Bellary breed sheep called Bellary sheep and Deccani sheep.
7. Partners in implementation, convergence of efforts & support from
the State Government:
 Services from Department of Animal Husbandry & Veterinary services in the
form of health coverage of livestock breeding programme, Artificial
insemination, Vaccination, fodder development programme, disease control,
training of farmers and other extension services available at Davanagere
district.
 AH & VS Department supplying good quality fodder seeds & mini kits at
subsidised rates and even free of cost to the farmers under various programmes.
 Free medical facility available in Department of AH & VS.
 Local Bankers to provide collateral free credit to the beneficiaries through
individual/ group mode.

8. Project Cost for each unit/activity – Sheep rearing

Sl Unit Total
Parameters Physical
No Cost Cost
Cost of Ewe 10 4500 45000
Cost of Ram 1 6000 6000

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 Davangere - ADS- Sheep Rearing - 2018-2023

Sl Unit Total
Parameters Physical
No Cost Cost
Transportation cost of animals 11 100 1100
Night shelter for Buck, Doe and 120 80 9600
followers/Adults etc., Buck 20sft/Doe 10
sft (Rs.80 /sqft)
Equipment including water facility 11 200 2200
(feeder, water dispenser, etc.) @ Rs.100
per animal
Insurance @ 5% 2250
Fodder cultivation expenses 0.25 3000 750
@Rs.3000/acre
Supplementary concentrate feed @ 21000
300g/animal/day (parent stock) Rs.18 per
kg for 12 months
Veterinary aid including vaccination @ 11 100 1100
Rs.100 per animal per year.
Miscellaneous Lumpsum 1000
Total Cost 90000
Total Financial Outlay 90000

Security norms will be as per RBI guidelines by hypothecation of assets created,

mortgage of land etc.

The animals have to be properly insured including transit, the animals are insured
annually @ 5% premium.

The interest varies depending on the bank and the quantum of loan.

9. Financing Agencies:
Commercial banks, RRBs and DCCBs are operating in these blocks viz., Harapanahalli
and Jagalur taluk and financing shall be obtained from the branches of these banks.
Block level credit flow data to Sheep rearing activity sector is not available. The
subsector-wise credit flow is not being generated through the LBR system. Based on
previous trends the same has been estimated. Hence the credit flow data is not
representative of the actual credit flow.

10.Physical and Financial Programme

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. 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.

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 Davangere - ADS- Sheep Rearing - 2018-2023

Two blocks in Davanagere district have been covered in this ADS scheme comprising
2 types of units with (10+1) with a unit cost of Rs.90,000/- and (100+5) with a unit
cost of Rs.9.80lakh covering Harapanahalli and Jagalur benefiting 150 beneficiaries
which is phased out for 5 years. For both the units of sheep rearing, a total financial
outlay of Rs.535 lakhs has been earmarked for the activities.
Year wise and bank wise number of units, total financial outlay, bank loan and margin
money is given below for ( 10+1 ) unit.

Unit Bank
Name of No. of TFO Margin
Block Year Activity Cost (Rs. (Rs. Loan
Bank (Rs. Units Lakh) Lakh) (Rs.
Lakh) Lakh)
2018-19 0.9 5 4.50 0.45 4.05
2019-20 0.9 5 4.50 0.45 4.05
Sheep
SBI 2020-21 0.9 5 4.50 0.45 4.05
Rearing
2021-22 0.9 5 4.50 0.45 4.05
2022-23 0.9 5 4.50 0.45 4.05
2018-19 0.9 4 3.60 0.45 3.15
2019-20 0.9 4 3.60 0.45 3.15
Canara Sheep
2020-21 0.9 4 3.60 0.45 3.15
Bank Rearing
2021-22 0.9 4 3.60 0.45 3.15
2022-23 0.9 4 3.60 0.45 3.15
2018-19 0.9 4 3.60 0.45 3.15
2019-20 0.9 4 3.60 0.45 3.15
Sheep
Harapanahalli and PKGB 2020-21 0.9 4 3.60 0.45 3.15
Rearing
Jagalur 2021-22 0.9 4 3.60 0.45 3.15
2022-23 0.9 4 3.60 0.45 3.15
2018-19 0.9 4 3.60 0.45 3.15
2019-20 0.9 4 3.60 0.45 3.15
Sheep
DCCB 2020-21 0.9 4 3.60 0.45 3.15
Rearing
2021-22 0.9 4 3.60 0.45 3.15
2022-23 0.9 4 3.60 0.45 3.15
2018-19 0.9 4 3.60 0.45 3.15
2019-20 0.9 4 3.60 0.45 3.15
Vijaya Sheep
2020-21 0.9 4 3.60 0.45 3.15
Bank Rearing
2021-22 0.9 4 3.60 0.45 3.15
2022-23 0.9 4 3.60 0.45 3.15
Total 105.00 94.50 11.25 83.25

Year wise and bank wise number of units, total financial outlay, bank loan and margin
money is given below for ( 100+5 ) unit.
Unit No. Bank
Name TFO Margin
Block Year Activity Cost of (Rs. (Rs. Loan
of Bank (Rs. Lakh) Lakh) (Rs.
Lakh) Units Lakh)
Harapanahalli 2018-19 Sheep 9.8 2 19.60 1.96 17.64
SBI
and Jagalur 2019-20 Rearing 9.8 2 19.60 1.96 17.64

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 Davangere - ADS- Sheep Rearing - 2018-2023

Unit No. Bank

Name TFO Margin
Block Year Activity Cost of (Rs. (Rs. Loan
of Bank (Rs. Lakh) Lakh) (Rs.
Lakh) Units Lakh)
2020-21 9.8 2 19.60 1.96 17.64
2021-22 9.8 2 19.60 1.96 17.64
2022-23 9.8 2 19.60 1.96 17.64
2018-19 9.8 2 19.60 1.96 17.64
2019-20 9.8 2 19.60 1.96 17.64
Canara Sheep
2020-21 9.8 2 19.60 1.96 17.64
Bank Rearing
2021-22 9.8 2 19.60 1.96 17.64
2022-23 9.8 2 19.60 1.96 17.64
2018-19 9.8 2 19.60 1.96 17.64
2019-20 9.8 2 19.60 1.96 17.64
Sheep
PKGB 2020-21 9.8 2 19.60 1.96 17.64
Rearing
2021-22 9.8 2 19.60 1.96 17.64
2022-23 9.8 2 19.60 1.96 17.64
2018-19 9.8 1 9.80 0.98 8.82
2019-20 9.8 1 9.80 0.98 8.82
Sheep
DCCB 2020-21 9.8 1 9.80 0.98 8.82
Rearing
2021-22 9.8 1 9.80 0.98 8.82
2022-23 9.8 1 9.80 0.98 8.82
2018-19 9.8 2 19.60 1.96 17.64
2019-20 9.8 2 19.60 1.96 17.64
Vijaya Sheep
2020-21 9.8 2 19.60 1.96 17.64
Bank Rearing
2021-22 9.8 2 19.60 1.96 17.64
2022-23 9.8 2 19.60 1.96 17.64
Total 45.00 441.00 44.10 396.90

Economics of sheep rearing unit

Sheep rearing ( 10 + 1 ) unit
A Project at a Glance Parameters
1 Unit Size (10 + 1)
2 Breed Bellary/Deccani
3 District Davanagere
4 Price of Ewe 4500
5 Price of Ram 6000
6 Feed consumption per day Adult 300 gm
7 Feed consumption per day Kid 100 gm
8 Feed days per cycle 120 days
9 Cost of Feed @ Rs. Per Kg 18
10 Insurance per animal 5%
Dispensary/Veterinary charges per animal per
11 year 200
12 Sale price of male kids @ Rs. Per Kid 3500
13 Sale price of female kids @ Rs. Per Kid 3000

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 Davangere - ADS- Sheep Rearing - 2018-2023

Economics of sheep rearing unit

Sheep rearing ( 10 + 1 ) unit
A Project at a Glance Parameters
14 Sale price of culled animal @ Rs. Per animal 4000
15 Income from manure/animal/year @ Rs. 25
16 Conception rate 90
17 Kidding percentage 1st Year 140%
18 Kidding percentage 2nd Year 160%
19 Mortality in Kids 15%
20 Culling 20%
21 Inter kidding period 8 months
22 Rate of Interest 12%
23 Repayment period (years) 1+5
24 BCR at 15% DF 1.13
25 NPW at 15% DF in Rs. 14,102
26 IRR % 21.04%

11. Financial analysis: Livestock Projection chart is the basis for working out the
income and expenditure statement and the financial analysis, i.e., calculation of NPW,
BCR and IRR for Sheep unit is given below :
Financial Analysis for Sheep Rearing Unit
(Amount in `)
Parameters Year
1 2 3 4 5 6
Capital cost 90000
Recurring cost 0 11160 13950 11160 13950 11160
Total cost 90000 11160 13950 11160 13950 11160
Benefit 255 29482 59637 35513 59637 35513
Net Benefit -89745 18322 45687 24353 45687 24353
PW Cost @ 15% 113941.92
PW Benefit @ 15% 127033.61
NPW 14102.08
BC Ratio 1.11
IRR 21%
Based on the techno-economic parameters assumed under the project the details of
income and expenditure are worked out for the project and the investments are found
to generate adequate surplus and financially viable and bankable.

11. Sensitivity and SWOT analysis

Strengths: i) Good supplementary activity in the scheme area for doubling the
farmers income ii) Adequate availability of capacity building in the scheme area (iii)
Climate in Harapanahalli and Jagalur taluk is suitable for sheep breeding and sheep
rearing. (iv). Sheep rearing activity is imbibed by the farmers by default of their
farming practices.

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 Davangere - ADS- Sheep Rearing - 2018-2023

Weaknesses: i) Regular drought and lack of green fodder availability in the scheme
area ii) Inadequate awareness among the farmers on scientific sheep rearing practices
(iii) Lack of proper market facility (iv) lack of modern abattoirs for meat culling and
selling.

Opportunities: i) Growing demand for milk from consumers in the area due to
increasing in income level ii) Proximity to demand centres / markets. As Davanagere
district is centrally located in the state, it is well connected to other districts like
Bellary, Chikmagalur, Hassan, Shimoga and to the neighbouring states - Andhra
Pradesh, Goa, Maharashtra and Tamil Nadu. There exists an ample scope for supply
of sheep meat and wool. Besides, financing of the activity through JLG/SHG mode can
also be popularised in the district through NGOs and Sheep and Woollen Co-operative
Society, Davanagere.

Threats: i) Changes in Government policy leading to adverse procurement price of

sheep meat and wool ii) Weak monsoons adversely affect the fodder development (ii)
Lack of financial support by the banking sector, fearing NPA.

After ensuring technical feasibility and economic 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.
12. Lending Terms - General and applicable schemes as per norms and guidelines
of the departments. 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 depends on the category of the
borrowers and may range from 10% to 25%. 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 and varies
from bank to bank and depends on the quantum of loan. Security will be as per RBI /
NABARD guidelines issued from time to time. 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. The animals and other assets (shed, equipment)
must be insured.
13. Repayment period
The loan is repayable in 5 years and the details are as below :
Loan Repayment for (10 + 1 )
(Amount in Rupees)
Loan Gross Total Net
Year Interest Prinicipal
O/S Surplus repayment Surplus
1 81000 255 9720 0 9720 -9465
2 52608 18353 6396 10522 16918 1434
3 42087 45701 5050 10522 15572 30130
4 31565 24384 3787 10522 14309 10074
5 21043 45701 2525 10522 13046 32654
6 10522 24384 1262 10522 11784 12599

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 Davangere - ADS- Sheep Rearing - 2018-2023

Lending Terms - General and applicable schemes as per norms and guidelines of the
departments. 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 depends on the category of the borrowers
and may range from 10% to 25%. 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 and varies from bank to
bank and depends on the quantum of loan. Security will be as per RBI / NABARD
guidelines issued from time to time. 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. The animals and other assets (shed, equipment) must be
insured.
14. Implementation strategy and Monitoring mechanism
The Plan has been prepared after thorough discussions with Animal Husbandry
Department, DD, Davanagere Sheep Breeding & Training Centre, Bankers, NGOs in
the taluk, Farmers’ Clubs, SHGs etc. The Plan will be placed before the DCC for its
perusal and approval. Blockwise allocation among banks has been tentatively done
based on discussions in BLBC/DLRC/DCC meetings. For successful implementation
of the plan, regular review would be undertaken in district and block level forum as a
regular agenda. Further, the following roles will be performed by the stakeholders
concerned.

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