A study was carried out to analyze the socio economic status of broiler farmers engaged in buy-back system, relative magnitudes of various costs and revenue associated with individual contract farmers and to investigate effectiveness of buy-back operation systems. A set of 100 broiler farmers engaged in a medium scale buy-back operation (integrated) system was selected randomly. Interviewing of the farmers using a pre-tested questionnaire and recording information by regular farm visits were employed for data collection. Information on socio economic aspects of the farmer, batch size, market weight and age of animals, management practices, costs of various inputs and revenue from selling birds, and effectiveness of buy-back system as perceived by the farmer were gathered from all farmers. Depreciation cost of buildings and equipment was found by considering the magnitude of initial investment and total duration of use of the item. Labour cost was assumed as Rs. 400.00 per 8-hour day. Analysis of variance procedure was used to determine the effect of various factors such as educational level, full or part time engagement on profit. Linear regression analysis was performed to determine the relationship between scale of operation and profit per kg of live weight. A quadratic regression model was used to determine optimum age for slaughter.
The broiler batches were sold at ages between 36 and 45 days. The average live weight at slaughter was 2.07 kg/bird. Major components of the total cost of production were feed cost (69.3%) and cost for day-old chicks (22.6%). Average cost when expressed per kg of live weight was Rs 191.58. As the contract buyer paid Rs. 200 per kg of live weight, the farmers made an average profit of Rs. 8.41/kg of live weight. When labour cost was excluded (assuming family labour only) average profit increased up to Rs. 11.90/kg of live weight. Profit/kg of live weight increased significantly (P<0.05) with the expansion of scale of operation. Optimum age at slaughter for the system was 42-43 days. Reduction of price of day-old chicks and feed and expansion of scale of operation could effectively improve the profit margin and sustainability of the industry.