Goat

Goat Farming
Farming B
Business
Busi
usiness
ness Plan
LANAO AGRO INDUSTRIAL COOPERATIVE ASSOCIATION
(LAICA)
2495 Cadayonan II, Marawi City
Email: [email protected]

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BUSINESS PLAN
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Sustainable
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District Livestock
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Goat Farming Business Plan
INTRODUCTION

The agricultural sector of Lanao Del Sur contributes approximately 18% to the overall GDP generated by
the municipality, constituting a slightly larger proportion of the economy on a local level than for the
District as a whole. The agricultural sector is however, a far large employer in the municipality, taking up
almost 6% of the overall employment in the Municipality.

However, statistics and studies hide the importance of remittances and non-farm activities for rural
households and the potential contribution of agricultural (and particularly livestock) income in providing
self-driven livelihoods for the poor. The Agricultural sector thus remains an important industry in the
economy of Tarlac City as large tracks of rural areas are mainly held for subsistence livestock farming.

Within the District the overwhelming majority of livestock are pigs (41%), followed by chickens (40%),
cattle (10%) and goats (9%). Nearly all of the goats in the District (93%) are communally farmed. Existing
livestock farming in Tarlac City also involves goats, cattle, piggery and poultry. As in the District, the
farming of animals is one of the key subcategories of agriculture in Tarlac City. The purpose of this project
is to establish a small-scale goat farming in Brgy. Mapalacsiao area of Tarlac local municipality.

Goat Farming is the raising and breeding of domestic goat. It is a part of animal husbandry which involves
managing and taking care of farm animals for profit, in which the genetic qualities and behavior of the
goat’s that is considered to be advantageous to humans are still being developed. The term can refer to the
practice of selectively breeding and raising livestock to promote desirable traits in animals. Goats are raised
principally for their meat(chevon), or for their milk. Raising goats in the Philippines can be as profitable in
local farms. Goat contributes to food production, rural employment and gross national product by
converting roughages into meat. Although Filipinos do not generally consider the goat meat as a part of
their daily meat diet, there is a growing demand for chevon and scope for export of meat.

The optimum potential if goat as one of the main source of milk and meat has not been fully tapped in the
Philippines. The goat is popularity knows as the poor man’s cow because children and old folks who
cannot afford cow’s milk prefer drinking goat’s milk. Aside from being cheap; goat’s milk is more digestible
compared to cow’s milk.

The goat is a clean animal and its male odor is only present during the breeding season female goat does
not smell. Contrary to myth, goats do not eat trash. They do, however, lick the labels of tin cans to taste the
glue on the label back Goat rising is undertaken commonly by small farmers or backyard raisers. A farmer
raises an average of one to two head goats only a handful of commercial-scale goat farms can be found in
the country. As of 2000, goat population is estimated to be 3,125,556 compared to the 1995 population of
2,981 900 that shows an average annual increase 2.57 percent. In the study conducted by the government
agency , it was found out that goats are multi-purpose ruminants producing 58.4% milk,35.6%meat, 4.3%
hide ,and 17%fiber.according to them, these small ruminants can provide the answer to improve
nutritional requirement of the predominantly rural farm families scattered all over the archipelago. Goat
inventory shows decreasing trend from 2008 to 2012, from 4.17 million head to 1.75 million head in 2012.
The average annual inventory is 4.03 million head. In 2011, goat population in the Philippines was placed
at 3.88 million head, with 98.5% in the backyard farms and 1.8% in commercial farms. As of 2012, the
industry is still predominantly backyard, although the share of the commercial sector continued to increase
with 1.9% share in 2012. “J.A.C.K.” was derived from the names of five persons, namely “Jason and
Jefferson for J, Adrian for A, Cyril for C, and Kaycee for K, by such tend to become partners and became
the owner of “J.A.C.K. GOAT FARM” where great selections of goat meats (chevon) were there. We came
to that branding because we want to name our business following to our names, so we decided to put our
initials and combined it. Our aim is for our customers easily remember us as their partners also and create
long term relationships to them.
 Table of Contents

1 Introduction ........................................................................................................................ 1

2 Production Plan .................................................................................................................. 2

2.1 Preconditions of this plan ............................................................................................ 2

2.2 Production and breeding plan ...................................................................................... 2
3 Financial Plan ..................................................................................................................... 7

3.1 Cost headings .............................................................................................................. 7

3.1.1 Fixed cost requirement ......................................................................................... 7

3.1.2 Depreciation and Interest of fixed cost ................................................................ 7

3.1.3 Variable cost ........................................................................................................ 9

3.2 Income headings ........................................................................................................ 10

3.2.1 Sales and Income plan ....................................................................................... 10

3.2.2 Inventory of Assets ............................................................................................ 11

4 Analysis ............................................................................................................................ 12

4.1 Cost benefit analysis.................................................................................................. 12

4.2 Break Even Point ....................................................................................................... 17
4.3 Loan Payment ............................................................................................................ 19
5 Conclusions ...................................................................................................................... 22
1 Introduction

LAICA has implemented the Project on Rehabilitation and Recovery from

Marawi Siege - epicentre of devastating earthquake in 2015. One hundred sixty four Boer
crossed goats as a revolving fund, and 11 buck of same breed have been distributed to
Various Multipurpose Cooperative Ltd. for the sustainable recovery and
development of local economy of Barpak through goat farming under livelihood program
of this project. The beneficiary people are 78 women there at initial phase, and they have
received the goat by borrowing a loan from the cooperative. The women need to pay the loan
within 2 years, and to do so, they need to breed she-goat appropriately, produce quality kids
and sell them.

Even after finishing the loan payback, there are still necessary costs for the
continuation of goat farming. So, for the continuation of goat farming as a business,
respective goat farmers have to recognize appropriate plan, and it is necessary to prepare
income-expenditure plan accordingly. That’s why, this “Goat Farming Business Plan” has
demonstrated with different models for the goat farming business management, and it shall be
helpful to farmers to apply any one suitable plan or formulate additional new plans.

Finally, this business plan shall be supportive to contribute for the establishment of
the model women cooperative regarding goat farming, as well as for the sustainable recovery
and development of local economy of Barpak through well-managed goat farming.

1
2 Production Plan

2.1 Preconditions of this plan

Some model cases of goat farming business management have been presented
in this plan. The period of this simulation is for 5 years, and the number of initial
she-goat is 1 or 2 head. The cases of keeping the first female kid as a new she-goat
for breeding purpose have also been presented here. The farmers can utilize
referring among the models presented here identifying own appropriateness. (See
Appendix-1 for the other preconditions)

2.2 Production and breeding plan

The number of kids born is changed depending on the number of she-goat in

farm. In addition to, the number of kid production is also largely changed according
to your decision whether the new born female kid is kept for breeding purpose or
not. Of cause, if farmer keeps many female kids as she-goats, the number of kid
production is increased, but the feeding cost and labor cost shall also be increased at
the same time. So, it is important for farmer to make appropriate plan suited to farm
conditions such as the financial situation and scale of the goat shed. On the other
hand, if farmer afford to increase the she-goat, it is better to keep new female kids at
the early stage such as 1st year or 2nd year, because it would very helpful to farmers
to increase the income effectively.

2
<MODEL CASES>

(1) Initially 1 head of she-goat

1) Sell all born kids (CASE (1)-1)

• The number of she-goat is 1 head throughout 5 years

• Maximum 15 kids can be produced in 5 years.

Table 1: Breeding and production plan of keeping she-goats (A), and sell all born kid
Month
Times Total remaining
Kids Sales of
of Nos. of goats after
born goat
breed selling
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Breed A Birth A (1) Breed

1st yr Dist. 2 1 0 2
(1) 1 kid A (2)

Birth A Sell A
Birth A (2) Sell A (1) Breed A
2nd yr (3) (2) 1 4 3 3
2 kids 1 goat (3)
2 kids 2 goats
Sell A Birth A
Breed Birth A (4) Breed A
3rd yr (3) (5) 2 4 2 5
A (4) 2 kids (5)
2 goats 2 kids
Birth A Sell A
Sell A (4) Breed A Breed A
4th yr (6) (5) 2 2 4 3
2 goats (6) (7)
2 kids 2 goats
Sell A
Birth A
Birth A (7) Sell A (6) (7) Breed
5th yr Breed A (8) (8) 2 4 4 3
2 kids 2 goats 2 A (9)
2 kids
goats
Total 9 15 13 3

3
 2) Keep first female kid for breeding purpose, and sell all other born kids (CASE (1)-2)

• The number of she-goat is 1 head initially, and then become 2 heads from the middle of 1st year.

• Maximum of 26 kids can be produced in 5 years.

Table 2: Breeding and production of keeping she-goat (A), and keeping 1st female kid (Z)
Month Times Sales Total remaining
Kids
of of Nos. of goats
born
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec breed goat after selling

Birth A (1)
Breed A Breed
1st yr Dist. 1 female 2 1 0 2
(1) A (2)
kid Z

Birth A (2) Breed Z Breed Birth Z (1) Birth A (3) Breed Sell A (2)
2nd yr 3 5 2 5
2 kids (1) A (3) 1 kid 2 kids Z (2) 2 goats

Birth A (4) Birth A (5)

2 kids 2 kids
Sell A
Breed Birth Z (2) Breed Birth Z (3)
3rd yr (3) Breed A (5) 3 8 5 8
A (4) 2 kids Z (3) 2 kids
Sell Z (1) 2 goats
1 goat Sell Z (2)
2 goats
Birth A
(6)
2 kids Sell A
Breed Sell A (4) Birth Z (4) Birth Z (5)
4th yr Breed A (6) Breed Z (5) (5) Breed A (7) 4 6 6 8
Z (4) 2 goats 2 kids Sell Z 2 kids
2 goats
(3)
2 goats
Birth A
Birth A (7)
(8) Sell A
2 kids Sell A Birth Z 2 kids (7)
5th yr Breed Z (6) (6) Breed A (8) (6) Breed Z (7) Breed A (9) 4 6 8 6
Sell Z 2
Sell Z (4) 2 goats 2 kids
(5) goats
2 goats
2 goats
Total 16 26 21 6

4
 (2) Initially 2 heads of she-goat

1) Sell all born kids (CASE (2)-1)

• The number of she-goat is 2 heads throughout 5 years.

• Maximum of 30 kids can be produced in 5 years.

Table 3: Breeding and production plan of keeping she-goats (A,B), and sell all born kids
Month
Times Sales Total remaining
Kids
of of Nos. of goats
born
breed goat after selling
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Birth
Breed Breed
1st yr Dist. A,B (1) 4 2 0 4
A,B (1) A,B (2)
2 kids
Birth A,B Breed Birth
Sell A,B (1) Sell A,B (2)
2nd yr (2) A,B A,B (3) 2 8 6 6
2 goats 4 goats
4 kids (3) 4 kids
Sell A,B
Breed Birth A,B (4) Breed Birth A,B (5)
3rd yr (3) 4 8 4 10
A,B (4) 4 kids A,B (5) 4 kids
4 goats
Sell Birth A,B Sell A,B
Breed A,B Breed
4th yr A,B(4) (6) (5) 4 4 8 6
(6) A,B (7)
4 goats 4 kids 4 goats
Birth Sell A,B Birth Sell A,B
Breed A,B
5th yr A,B (7) (6) Breed A,B (8) A,B (8) (7) 4 8 8 6
(9)
4 kids 4 goats 4 kids 4 goats

Total 18 30 26 5

5
 2) Keep first female kid for breeding purpose, and sell all other born kids (CASE (2)-2)

• The number of she-goat is 2 heads initially, and then become 3 heads from the middle of 1st year.

• Maximum of 41 kids can be produced in 5 years.

Table 4: Breeding and production plan of keeping she-goats (A,B), and keeping 1st female kid (Z)
Month
Total remaining
Times of Kids Sales
Nos. of Goats
breed born of goat
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec after selling

Birth A,B (1)

Breed Breed
1st yr Dist. 1 female kid Z 4 2 0 4
A,B (1) A,B (2)
& 1 kid

Birth A Birth Sell

Breed Z Sell A,B (1) Breed Birth Z (1) Breed Z
2nd yr (2) A,B (3) A,B (2) 4 9 5 8
(1) 1 goat A,B (3) 1 kid (2)
4 kids 4 kids 4 goats
Birth
Birth A,B (4)
A,B (5)
Birth Z 4 kids Sell A,B Birth Z
Breed Breed Z 4 kids
3rd yr (2) (3) Breed A,B (5) (3) 5 12 7 13
A,B (4) (3) Sell Z
2 kids Sell Z(1) 4 goats 2 kids
(2)
1 goat
2 goats
Birth A,B
Sell A,B Breed (6) Sell A,B Birth Z
Breed Birth Z (4) 4 kids Breed
4th yr (4) A,B Breed Z (5) (5) (5) 6 8 10 11
Z (4) 2 kids A,B (7)
4 goats (6) Sell Z (3) 4 goats 2 kids
2 goats
Birth A,B Birth A,B
(7) Sell (8) Sell A,B
4 kids Breed Breed A,B Birth Z (6) 4 kids Breed Breed
5th yr A,B (6) (7) 6 10 12 9
Z (6) (8) 2 kids Z (7) A,B (9)
Sell Z (4) 4 goats Sell Z (5) 4 goats
2 goats 2 goats
Total 25 41 34 8

6
3 Financial Plan

3.1 Cost headings

3.1.1 Fixed cost requirement

Fixed cost is the cost that is required to operate the business in every year, but
it not directly inter-connection with production amount and sales of kids. The major
fixed cost is such as Goat shed construction cost and She-goat procurement cost that
are to be needed at the commencement of the goat farming business. According to
this simulation, Php 43,134.25/- is needed if farmer starts with 1 she-goat and
Php 25,814.46/- is needed if start with 2 she-goats. However, farmer shall not
count these costs on the accounting book because the Goat shed cost should be
depreciated in 5 years and the loan for goat would be paid after 2 years. It will
be explained as followings:

Table 5: Fixed cost for goat farming business

Particulars Unit Quantity Rate Total Amount Remarks
Construction of Goat Shed
wall &
Bamboo 6-6.5 m long no 50 106 5,300
pillar
CGI sheet 2 m. no 8 319 2,552 roof
1
Nails kg 8 63 504
Curved hooks and nut bolts set. 50 6 300
Stall feeding construction no 1 850 850
Labor for shed construction no 5 212 1,060
Sub Total 10,566

Particulars Quantity Rate Total Amount Remarks

1 7,350 7,350 21kg @
2 She-goat Purchasing
2 7,350 14,700 Php 350

3.1.2 Depreciation and Interest of fixed cost

As goat farmer has introduced goat shed and she-goat as the initial investment
for goat farming business, it is shall be recorded these costs as depreciation and

7
 interest on the accounting book every year. By the depreciation, the initial cost of
the goat shed shall be divided into 5 years and the value of the shed becomes zero
after that. In actual, goat shed can be used for about 10 years with its appropriate
repair and management, but the depreciation cost will not be allocated from 6th year.

Likewise, as the goat shed has been constructed by self investment of the
farmer, it has not been counted as interest of investment; whereas, in regards to
interest of goat loan, it has to be paid at the rate of 6% to women’s cooperative
within 2 years.

Table 6: Depreciation and interest of fixed cost

Particulars Rate 1st Year 2nd Year 3rd Year 4th Year 5th Year
Depreciation of
Goat Shed
1 (20% depreciation 20% 2,187 2,187 2,187 2,187 2,187
per year on Php
10,936)

Particulars Rate 1st Year 2nd Year 3rd Year 4th Year 5th Year
Interest (Loan for
1 she-goat)
(6% loan interest 6% 445 445 0 0 0
per year on Php
7,350)
2
Interest (Loan for
2 she-goats)
(6% loan interest 6% 645 645 0 0 0
per year on Php
14,700)

Particulars 1st Year 2nd Year 3rd Year 4th Year 5th Year

Depreciation and Interest 2,633 2,633 2,187 2,187 2,187

cost (1 she-goat) 11,828
Total

Depreciation and Interest 3,079 3,079 2,187 2,187 2,187

cost (2 she-goats) 12,720

8
 3.1.3 Variable cost

Variable cost is changed depending on the number of she-goat. If the number

of goat is increased, simultaneously the variable cost is also increased. However; if
the number of goat is increased, the production of kids and income of farmer is also
increased accordingly. In this way, the followings measures shall also be considered
to increase the number of goats in the farm:

• The possibility to manage the goat by family members without hiring other person

• The scale of goat shed for the additional produced goats

• The situation of the location whether farmer can secure enough feed or not even in
winter season

Table 7: Variable cost for goat farming

Number
1st 2nd 3rd 4th 5th
S.N. Particulars Rate of she-
Year Year Year Year Year
goat
Fodder and forage 1 319 0 0 0 0
plantation (Napier
1 319 2 638 0 0 0 0
and other perenial
fodder) 3 638 319 0 0 0
1 10,638 10,638 10,638 15,957 15,957
Labor cost (@
2 Php 212/8 212 2 13,297 13,297 13,297 23,936 19,946
hours * day)
3 13,297 13,297 13,297 23,936 23,936
Vaccine and 1 340 340 340 340 340
medicine
3 (@ Php 340/year 340 2 680 680 680 680 680
* she-goat
3 680 1,020 1,020 1,020 1,020
including her kids)
1 170 170 170 170 170
Mating cost
4 (@ Php 85/ until 85 2 340 340 340 340 340
pregnant)
3 340 510 510 510 510
Insurance for she- 1 185 185 185 185 185
goat
5 185 2 371 371 371 371 371
(Php 7,350 * 5% *
50%) 3 371 556 556 556 556
Feed cost 1 460 2,230 2,230 2,230 2,230
(@ 3kg/month *
6 38 2 919 4,600 4,600 4,600 4,600
head, @ Php
13/kg) 3 919 5,975 5,975 5,975 5,975

9
 1st 2nd 3rd 4th 5th
Particulars
Year Year Year Year Year
12,114 13,632 13,632 18,592 18,592
Variable cost (1 she-goat)
77,283
16,248 19,287 19,287 29,925 25,935
Total Variable cost (2 she-goats)
110,683
16,248 21,681 21,681 32,000 32,000
Variable cost (3 she-goats)
123,293

3.2 Income headings

3.2.1 Sales and Income plan

As it was explained in the previous section, depends on the number of she-

goat, farmer can produce from 15 to 41 kids; whereas, 13 to 34 kids can be sold in 5
years. From selling those kids, farmer can earn from Php 83,000/- to Php 217,000/- in
total, except stock of mother goats and kids worth from Php 13,000/- to Php
39,000/- in the goat shed.

In addition to, the Boer-cross kids can be sold to the buyers not only for meat
purpose, but also for breeding purpose. In general, if farmer can sell the kids for
breeding purpose, the price would be about 2 times higher than for meat purpose. But,
it also depends on the growth of the kids and the existence of the demand at that time.
Thus, in this simulation, it has been premised that all the kids are sold only for the
meat purpose. This is average price rate for 5 years duration.

Table 8: Goat selling for meat and its income (Php 260/kg, average weight 25 kg in 9 months)
1st Year 2nd Year 3rd Year 4th Year 5th Year Total
Rate
Production Plan Sales
(Php) Qty Amount Qty Amount Qty Amount Qty Amount Qty Amount (Php)

1 She-goat and
1-1 6,300 0 0 3 18,900 2 12,600 4 25,200 4 25,200 81,900
sell all kids

1 She-goat and
1-2 keep 1st female 6,300 0 0 2 12,600 5 31,500 6 37,800 8 50,400 132,300
kid for breeding

2 She-goat and
2-1 6,300 0 0 6 37,800 4 25,200 8 50,400 8 50,400 163,800
sell all kids

2 She-goat and
2-2 keep 1st female 6,300 0 0 5 31,500 7 44,100 10 63,000 12 75,600 214,200
kid for breeding

10
 3.2.2 Inventory of Assets

The sample of the inventory of assets in each pattern model is shown on the
table below. The value of goat shed becomes zero by the depression after 5 years in
terms of the accounting management. In general, she-goat can be used for more than
10 years for breeding purpose if it is healthy, and then it would be sold as meat.
Regarding the kids, they would be sold after 9 months fattening, but if they are not
sold by the close of accounting book (it is usually at the end of fiscal year), it should
be taken inventory them as year-end assets. As there might be different weight
of goats and kids, it has been assumed average value as Php 4,500/-; however,
the contemporary market price might be different.

Table 9: Sample inventory of assets (shed, she-goats, and not sold kids)
1st Year 2nd Year 3rd Year 4th Year 5th Year Value
Inventory at end
Production Plan
price Qty Amount Qty Amount Qty Amount Qty Amount Qty Amount of 5
year

1 Goat Shed 10,900 1 8,700 1 6,500 1 4,300 1 2,200 1 0 0

She-goat
(1)-1. 1 She-
goat and sell 4,200 1 4,200 1 4,200 1 4,200 1 4,200 1 4,200 4,200
all kids
(1)-2. 1 She-
goat and keep
4,200 1 4,200 2 8,400 2 8,400 2 8,400 2 8,400 8,400
1st female kid
2 for breeding
(2)-1. 2 She-
goat and sell 4,200 2 8,400 2 8,400 2 8,400 2 8,400 2 8,400 8,400
all kids
(2)-2. 2 She-
goat and keep
4,200 2 8,400 3 12,600 3 12,600 3 12,600 3 12,600 12,600
1st female kid
for breeding
Stock kids before selling
(1)-1. 1 She-
goat and sell 4,200 1 4,200 2 8,400 4 16,800 2 8,400 2 8,400 8,400
all kids
(1)-2. 1 She-
goat and keep
4,200 1 4,200 4 16,800 7 29,400 7 29,400 5 21,000 21,000
1st female kid
3 for breeding
(2)-1. 2 She-
goat and sell 4,200 2 8,400 4 16,800 8 33,600 4 16,800 4 16,800 16,800
all kids
(2)-2. 2 She-
goat and keep
4,200 2 8,400 5 21,000 10 42,000 8 80,000 6 25,200 25,200
1st female kid
for breeding

11
4 Analysis

4.1 Cost benefit analysis

Based on the cost and sales calculation shown in the previous section, the
results of benefit analysis for each model of number of she-goat is shown in the below.

(1) Initially 1 head of she-goat

1) Sell all kids (CASE (1)-1)

In the model of CASE (1)-1, farmer keeps only 1 she-goat throughout the 5
years, and the proportion of the cost is relatively high because the number of kid
production is small. Therefore, the farmer can earn income only from 4th year. The
farmers can make net income Php 50,200/- without labor cost in 5 years, except
stock assets worth Php 12,700/-.

Table 10: Cost benefits analysis of keeping she-goat (A), and sell all born kids
Total
2nd 3rd 4th 5th
Description Note 1st Year Amount
Year Year Year Year
in 5 years
Expenditure
Goat shed
1 10,900 2,190 2,190 2,190 2,190 2,190 10,900
depreciation
Loan payback of
2 she-goat 7,435 0 0 7,435 0 0 7,435
purchased
3 Loan interest 6% 445 445 0 0 0 890
With
12,115 13,630 13,630 18,950 18,950 77,280
labor cost
4 Running cost
Without
1,475 1,475 1,475 1,475 1,475 7,375
labor cost
With
14,750 16,266 23,254 21,139 21,139 96,546
labor cost
Total Expenditure
Without
4,108 5,628 12,616 5,181 5,181 32,716
labor cost
Revenue
Goat selling for
1 6,400 0 19,000 12,800 25,500 25,500 89,200
meat
With
(14,700) 2,883 (10,489) 4,382 4,393 (13,567)
labor cost
Net Income
Without
(4,108) 13,521 149 20,350 20,350 50,262
labor cost

12
 Amount at
2nd 3rd 4th 5th
Description Note 1st Year the end of 5
Year Year Year Year
years
Liabilities
Loan for she-
1 2 years 7,435 7,435 0 0 0 0
goat
Assets
1 Goat shed 10,936 8,749 6,562 4,375 2,187 0 0

2 She-goat 4,255 4,255 4,255 4,255 4,255 4,255 4,255

Stock kids
3 4,255 4,255 8,510 17,021 8,510 8,510 8,510
before selling
Total Inventory 9,824 11,893 25,651 14,953 12,766 12,766

1) Keep first female kid for breeding purpose (CASE (1)-2)

In the model of CASE (1)-2, farmer keeps only 1 she-goat initially, and keeps
1 new female kid for breeding purpose from the middle of 1st year. Here, farmer can
earn income from 3rd year, and the farmers can make net income Php
88,000/- without labor cost in 5 years, except stock assets worth Php 30,000/-.

Table 11: Cost benefits analysis of keeping she-goat (A), and keeping 1st female kid
Total
2nd 3rd 4th 5th
Description Note 1st Year Amount
Year Year Year Year
in 5 years
Expenditure
Goat shed
1 10,936 2,187 2,187 2,187 2,187 2,187 10,936
depreciation
Loan payback of
2 she-goat 7,435 0 0 7,435 0 0 7,435
purchased
3 Loan interest 6% 445 445 0 0 0 890
With
16,246 19,289 19,289 29,925 25,936 110,683
labor cost
4 Running cost
Without
2,950 5,989 5,989 5,989 5,989 26,906
labor cost
With
Total Expenditure 18,882 21,920 28,909 32,112 28,123 129,946
labor cost

13
 Without
5,584 8,622 15,611 8,176 8,176 46,170
labor cost
Revenue
Goat selling for
1 6,383 0 12,766 31,915 38,298 51,064 134,042
meat
With
(18,882) (9,154) 3,006 6,185 22,940 4,096
labor cost
Net Income
Without
(5,584) 4,144 16,304 30,122 42,888 87,873
labor cost

Amount at
2nd 3rd 4th 5th
Description Note 1st Year the end of 5
Year Year Year Year
years
Liabilities
Loan for she-
1 2 years 7,435 7,435 0 0 0 0
goat
Assets
1 Goat shed 10,936 8,750 6,562 4,374 2,187 0 0

2 She-goat 4,255 4,255 8,510 8,510 8,510 8,510 8,510

Stock kids
3 4,255 4,255 17,020 29,787 29,787 21,277 21,277
before selling
Total Inventory 9,825 24,658 42,672 40,485 29,787 29,787

(2) Initially 2 heads of she-goat

1) Sell all kids (CASE (2)-1)

In the model of CASE (2)-1, farmer keeps 2 she-goats throughout the 5 years,
and farmer can earn income from 2nd year. The farmers can make net income Php
111,460/- without labor cost in 5 years, except stock assets worth Php 25,531/-.

14
Table 12: Cost benefits analysis of keeping she-goat (A,B), and sell all born kids
Total
2nd 3rd 4th 5th
Description Note 1st Year Amount
Year Year Year Year
in 5 years
Expenditure
Goat shed
1 10,936 2,187 2,187 2,187 2,187 2,187 10,936
depreciation
Loan payback of
2 she-goat 7,435 0 0 14,870 0 0 14,870
purchased
3 Loan interest 6% 892 892 0 0 0 1784
With
16,248 19,287 6,521 29,925 25,935 110,683
labor cost
4 Running cost
Without
2,950 5,989 5,989 5,989 5,989 26,906
labor cost
With
19,328 22,366 36,344 32,112 28,123 138,273
labor cost
Total Expenditure
Without
6,030 9,069 23,045 8,176 8,176 54,497
labor cost
Revenue
Goat selling for
1 6,383 0 38,298 25,532 51,064 51,064 165,957
meat
With
(19,328) 15,931 (10,812) 18,951 22,940 27,684
labor cost
Net Income
Without
(6,030) 29,229 2,486 42,887 42,887 111,461
labor cost

Amount at
2nd 3rd 4th 5th
Description Note 1st Year the end of 5
Year Year Year Year
years
Liabilities
Loan for she-
1 2 years 14,870 14,870 0 0 0 0
goat
Assets
1 Goat shed 10,936 8,749 6,562 4,374 2,187 0 0

2 She-goat 4,255 8,510 8,510 8,510 8,510 8,510 8,510

Stock kids
3 4,255 8,510 17,020 34,040 17,020 17,020 17,020
before selling
Total Inventory 10,900 17,224 46,928 27,719 25,532 25,532

2) Keep first female kid for breeding purpose (CASE (2)-2)

In the model of CASE (2)-2, farmer keeps 2 she-goats initially, and keeps 1
new female kid for breeding purpose from the middle of 1st year. Here, farmer can

15
 earn income from 2nd year, and the farmers can make net income NPR 361,175/-
without labor cost in 5 years, except stock assets worth NPR 90,000/-.

Table 13: Cost benefits analysis of keeping she-goat (A,B), and keeping 1st female kid
Total
2nd 3rd 4th 5th
Description Note 1st Year Amount
Year Year Year Year
in 5 years
Expenditure
Goat shed
1 10,936 2,187 2,187 2,187 2,187 2,187 10,936
depreciation
Loan payback of
2 she-goat 7,435 0 0 14,870 0 0 14,870
purchased
3 Loan interest 6% 892 892 0 0 0 1,784
With
16,249 21,681 21,362 32,000 32,000 123,292
labor cost
4 Running cost
Without
2,950 8,383 8,064 8,064 8,064 35,527
labor cost
With
19,328 24,761 38,419 34,187 34,187 150,883
labor cost
Total Expenditure
Without
6,030 11,463 25,121 10,251 10,251 63,117
labor cost
Revenue
Goat selling for
1 6,383 0 31,914 44,680 63,830 76,596 217,021
meat
With
(19,328) 7,154 6,262 29,642 42,408 66,1385
labor cost
Net Income
Without
(6,030) 20,452 19,560 53,578 66,344 135,904
labor cost

Amount at
2nd 3rd 4th 5th
Description Note 1st Year the end of 5
Year Year Year Year
years
Liabilities
Loan for she-
1 2 years 18,383 18,383 0 0 0 0
goat
Assets
1 Goat shed 10,936 8,749 6,561 4,374 2,187 0 0

2 She-goat 4,255 8,510 12,765 12,765 12,765 12,765 12,765

16
 Stock kids
3 4,255 8,510 21,276 42,553 34,042 25,531 25,531
before selling
Total Inventory 7,387 22,221 59,693 48,996 38,298 38,298
Based on the above results, in order to earn income from early stage, it is
important to keep the female kid of initial stage for breeding purpose. Then, farmer
needs to operate the goat farming cycle of breeding, delivery and sales. According to
this simulation, keeping total 3 she-goats make farmer possible to obtain standard
income.

4.2 Break Even Point

The result of analysis on Break Even Point (BEP) for each model is shown in
the below. BEP can be defined as a point where total costs (expenses) and total sales
(revenue) are equal. It is used to analysis to know the point where there is no net
profit or loss.

In this simulation, here is explained necessary number of kid to be sold in 5

years to secure the farmer’s net income. The calculation formulas used for the
analysis are as follows.

· Break Even Point (BEP) = Fixed Cost / Marginal Profit Ratio

= Fixed Cost / {1- (Variable Cost /

Sales)}

· Break Even Sales Number (BESN) = BEP / Average Sales Price

· Break Even Sales Rate (BESR) = BESN / Number of Production

· Break Even Mortality Rate (BEMR) = (1 - BESR) × 100

(1) Initially 1 head of she-goat

1) Sell all kids (CASE (1)-1)

・ BEP = 19,263 / {1 – (13,453 / 82,979} = Php 22,932/-

・ Break Even Number of Goat Sales = 22,932 / 6,383 = 3.6 = Avg. 4 heads

・ Break Even Sales Ratio = 4 / 13 = 0.31

・ Break Even Mortality Ratio = (1 – 0.31) * 100 = 69 %

17
 Here, BEP is Php 25,103/-. It can be achieved if farmer could sell at least 4
kids out of 13 kids that would be produced in 5 years, results neither profit nor loss. In
this sense, 69% (9 kids) were not sold or died among marketable 13 kids; the farmer
will not be loss. As a result, if farmers could sell 9 kids, which is not sold or not died;
the farmer will be in profit worth of those 9 kids.

2) Keep first female kid for breeding purpose (CASE (1)-2)

・ BEP = 19,263 / {(1 – (26,906 / 134,042)} = Php 24,101/-

・ Break Even Number of Goat Sales = 24,101 / 6,383 = 3.6 = Avg. 4 heads
Break Even Sales Ratio = 4 / 21 = 0.19

・ Break Even Mortality Ratio = (1 – 0.19) * 100 = 81 %

Here, BEP is Php 24,101/-. It can be achieved if farmer could sell at least 4
kids out of 21 kids that would be produced in 5 years, results neither profit nor loss. In
this sense, 81% (17 kids) were not sold or died among marketable 21 kids; the farmer
will not be loss. As a result, if farmers could sell 17 kids, which is not sold or not
died; the farmer will be in profit worth of those 17 kids.

(2) Initially 2 heads of she-goat

1) Sell all kids (CASE (2)-1)

・ BEP = 27,590/ {(1 – (26,906 / 165,957)} = Php 32,928/-

・ Break Even Number of Goat Sales = 32,928 / 6,383 = 5.2 ≓ Avg. 6 heads

・ Break Even Sales Ratio = 6 / 26 = 0.23

・ Break Even Mortality Ratio = (1 – 0.23) * 100 = 77 %

Here, BEP is Php 32,929/-. It can be achieved if farmer could sell at least 6
kids out of 26 kids that would be produced in 5 years, results neither profit nor loss. In
this sense, 77% (20 kids) were not sold or died among marketable 26 kids; the farmer
will not be loss. As a result, if farmers could sell 20 kids, which is not sold or not
died; the farmer will be in profit worth of those 20 kids.

2) Keep first female kid for breeding purpose (CASE (2)-2)

・ BEP = 27,590 / {(1 – (35,527 / 217,021)} = Php 32,991/-

・ Break Even Number of Goat Sales = 32,991 / 6,383 = 5.2 ≓ Avg. 6 heads

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 ・ Break Even Sales Ratio = 6 / 34 = 0.18

・ Break Even Mortality Ratio = (1 – 0.18) * 100 = 82 %

Here, BEP is Php 32,991/-. It can be achieved if farmer could sell at least 6
kids out of 34 kids that would be produced in 5 years, results neither profit nor loss. In
this sense, 82% (28 kids) were not sold or died among marketable 34 kids; the farmer
will not be loss. As a result, if farmers could sell 28 kids, which is not sold or not
died; the farmer will be in profit worth of those 28 kids.

4.3 Loan Payment

The loan which farmer has borrowed to buy she-goat has to be returned at the
start of 3rd year (after the end of 2nd year) to women’s cooperative. The loan
repayment simulation of each model is shown in the table below.

Table 14: Loan payment status

Net Income (without loan payment) Loan Payment

Loan If Pay at If Pay at

Total
Production Plan Amou the end of the end of
2nd 3rd of Total of
nt 1st Year 2nd year, 3rd year,
Year Year 2 3 years
income income
years
remains remains
(1)- 1 She-goat and sell
7,435 (4,108) 13,521 7,584 9,412 16,996 1,977 9,562
1 all kids
1 She-goat and
(1)-
keep 1st female kid 7,435 (5,584) 4,144 23,738 (1,440) 22,298 (8,875) 14,863
2
for breeding
(2)- 2 She-goat and sell
14,869 (6,030 29,229 17,355 23,199 40,555 8,330 25,685
1 all kids
2 She-goat and
(2)-
keep 1st female kid 14,870 (6,030) 20,452 34,429 14,422 48,851 (448 ) 33,982
2
for breeding

From the above table, we can conclude as followings:

• Initially 1 head of she-goat, and sell all the born kids (CASE (1)-1): As the
farmer has loan of Php 7,435/- and able to make income worth Php
9,561/- at the end of second year, he/she can return the loan to cooperative at
the end of 2nd year and save Php 1,977/- also. So, the kids sold from end of
2nd year are the profits for respective farmers.

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 • Initially 1 head of she-goat, and keep the first female kid (CASE (1)-2): As the
farmer has loan of Php 7,435/- and still Php 1,440 is in loss at the end of
second year, he/she can return the loan to cooperative only from 3rd year, and
will be able to save money worth Php 14,863/- within this duration. So, the
kids sold from 3rd year are the profits for respective farmers.

• Initially 2 head of she-goat, and sell all the born kids (CASE (2)-1): As the
farmer has loan of Php 14,870/- and able to make income worth Php
23,200/- at the end of second year, he/she can return the loan to cooperative at
the end of 2nd year and save Php 8,330/- also. So, the kids sold from end of
2nd year are the profits for respective farmers.

• Initially 2 heads of she-goat, and keep the first female kid (CASE (2)-2): As
the farmer has loan of Php 14,870/- and only income worth Php 14,422
within second year, he/she can return the loan to cooperative only from
beginning of 3rd year, and will be able to save money worth Php 33,981/- at
the end of 3rd year. So, the kids sold from beginning of 3rd year are the profits
for respective farmers.

Table 15: Total capital and net income at the end of 5 years
Net
Capital
Net income income
from Total
Revenue with labor without
stock Capital
Collectio cost and labor cost
Production Plan goats at the
n in 5 other cost but with
and kids end of 5
years after loan other cost
in 5 years
pay back after loan
years
payback
1 She-goat and sell all
(1)-1 82,979 12,766 95,745 (8,236) 55,593
kids
1 She-goat and keep
(1)-2 1st female kid for 134,042 29,787 163,830 26,449 110,225
breeding
2 She-goat and sell all
(2)-1 165,957 165,957 191,489 38,346 122,123
kids
2 She-goat and keep
(2)-2 1st female kid for 217,021 38,298 255,319 89,566 177,332
breeding

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 Likewise, we can conclude the total capital remained in the hand of farmers at
the end of 5 years as followings:

• Initially 1 head of she-goat, and sell all the born kids (CASE (1)-1): At the end of
5 years, the farmer can make income worth Php 82,979/- by selling the kids,
and have stock of mother goat and kids worth Php 12,766/- in the shed. In this
sense, the respective farmer has total income or capital worth Php 95,745/-.
Likewise, the farmer will be in loss worth Php 8,236/- after loan pay back if
labor cost and other running costs are included; whereas, the farmer will have net
income worth Php 55,593/- if only labor cost is excluded, even after loan pay
back.

• Initially 1 head of she-goat, and keep first female kid (CASE (1)-2): At the end of
5 years, the farmer can make income worth Php 132,352/- by selling the kids,
and have stock of mother goat and kids worth Php 29,787/- in the shed. In this
sense, the respective farmer has total income or capital worth Php 163,830/-.
Likewise, the farmer will have net income worth Php 26,448/- after loan pay
back if labor cost and other running costs are included; whereas, the farmer will
have net income worth Php 110,225/- if only labor cost is excluded, even after
loan pay back.

• Initially 2 heads of she-goat, and selling all born kids (CASE (2)-1): At the end of
5 years, the farmer can make income worth Php 165,957/- by selling the kids,
and have stock of mother goat and kids worth Php 25,532/- in the shed. In this
sense, the respective farmer has total income or capital worth Php 191,489/-.
Likewise, the farmer will have net income worth Php 38,346/- after loan pay
back if labor cost and other running costs are included; whereas, the farmer will
have net income worth Php 122,123/- if only labor cost is excluded, even after
loan pay back

• Initially 2 heads of she-goat, and keep first female kid (CASE (2)-2): At the end of
5 years, the farmer can make income worth Php 217,021/- by selling the kids,
and have stock of mother goat and kids worth Php 38,297/- in the shed. In this
sense, the respective farmer has total income or capital worth Php 255,319/-.
Likewise, the farmer will have net income worth Php 89,566/- after loan pay
back if labor cost and other running costs are included; whereas, the farmer will

21
 have net income worth Php 177,332/- if only labor cost is excluded, even after
loan pay back

5 Conclusions

In general, the mortality rate in goat rearing is about 5 to 10 %. The result of

above analysis among shows that profit will be secured in any 4 cases even if
mortality rate is 69 to 82%. In other words, the goat farming business is with
considerable safety margin.

However, it is necessary to consider that the goat farming business becomes

deficit inevitably at the initial stage because there is no sale of kids in 1st year. Thus,
at the beginning of the business, it is effective to suppress the initial investment by
using the existing old goat shed or using scrap wood and bamboo that can be utilized
freely instead of purchasing materials. Farmer can also consider ways to create base
funds from other income sources, or to use a loan of women's cooperative.

As for the loan for she-goat, it is possible to repay it at the end of 2nd year
depending on the number of she-goat raised. However, the farmer has to wait to repay
the loan by 3rd year.

In this way, there may be some women struggling with cash flow at the
beginning of the goat farming business. However, in all cases, it is expected that
farmer can get profit within 5 years. After that, the production cycle can be operated
efficiently and the business will become stable, so farmer can expect a large profit in
the total 10 years of the average service period of she-goat. It is important to retain the
production of quality goats, decrease the mortality rate, and sell goats as
breeding purpose for better income. Finally, it is believed that the substantial goat
farming will be led to commercial goat farming gradually, increasing the capacity of
goat shed.

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 Appendix-1

Pre-conditions for preparing this business plan

1) Breeding: the goat gets breeding after 3 months of goat received by farmer, goat get
delivery after 5 months of breeding, and re-breeding in 4th month after delivery.

2) Twins rate: In the first time, there is born of 1 kid, and 2 kids from 2nd time of
delivery.

3) Proportion of male and female kids: 1:1

4) Average weight of the goat in nine months: 25 kg.

5) Average price rate of kids: Php 320/ kg. (live weight)

6) Average price of mother goats and not sold kids: Php 4,255/- per number

7) Interest rate of loan from cooperative: 6%

8) Goat rearing capacity: 1, 2, 3 mother goats, and from 1 to 10 kids

9) First female kid can be used as breeding purpose

10) Goats can be kept in stall feeding and grazing

11) Fodder has to buy in 1st and 2nd year, and cultivated fodder tree will start to give
fodder from 3rd year

12) The price of goat shed is Php 10,950/-, and it is afford by respective farmer

13) The age of goat shed is 5 years

14) Depreciation rate of fixed cost is at the rate of 20%

15) The feed is fed to the kids of 2 to 12 months at the rate of 100 gm per day

16) The feed is fed to pregnant goats from 2 months previous to 2 months back of
delivery

17) Beyond the feed, the fodder/grass is given at the rate of 4% of total weight of goats
every day

23