The agro-climatic condition in India is suitable for sheep farming. sheep are mostly reared for mutton and wool production in our country. Investment in sheep farming is low & it gives a good return in a short period. The meat of sheep is called mutton, which is a preferred food among all community. Sheep don’t need expensive housing. Good care of animals and better management are key to success in sheep farming. Subsidy for sheep farming:– Both central and state government assistance is available for sheep farming. Back ended capital subsidy 25% for general category (33.33% for SC/ST/BPL beneficiaries) is available under the government of India scheme Integrated Development Of Small Ruminants And Rabbits (IDSRR-EDEG). Subsidy ceiling is Rs250000/- for a sheep farm. A farmer from Odisha can avail subsidy up to rupees fifty lakhs for sheep farming under Mukhyamantri Krushi Udyoga Yojana(MKUY). This sheep farm project report is subject to the following assumption.

1-   Adult healthy Ewes& Ram (mutton type breed) within 2 years of age will be purchased

2-   Manure produced in the farm will be utilized for fodder cultivation

3-  In case of death of adult Sheep, the new animal will be purchased from insurance claim money

4-  The above project will be economically viable under proper care & attention of the entrepreneur

Techno-economic parameters
System of rearingSemi-intensive
No. of Ram4
No. of Ewes100
Age at Maturity (Months)11
Lambing/ interval (Months)8
No of laming/year1.5
Sex ratio1:1
Mortality(%) Lambs5
Saleable age of lambs (months)11
Expenditure norms
Space requirement sqft.per head for Ram20
Space requirement sqft.per head for Ewe10
Space requirement sqft.per head/lamb4
Cost of construction (Rs.persft)     Ewe, Ram ,Lambs200
Cost of equipment (Rs.per adult animal)50
The purchase price of ewe4500
The purchase price of Ram6500
 Cost of green fodder cultivation (Rs./hector/year)30000
Concentrate feed: Adult Ewes(one month before breeding and one month after lambing i.e. per lambing)6.75 kg per month
Concentrate feed for Ram (two months per breeding season)7.5 kg per month
Concentrate feed for Lambs (for 30 days)3.75 kg per lamb
Cost of conc. feed (Rs./kg)18
Labour (No.)1
Labour wages (Rs.per month)6000
Insurance (as a percentage of the cost of breeding stock)5
Veterinary aid (Rs./adult/year)100
Income norms :
Sale price of Buck/(11month)3800
Sale price of Ewe/(11month)3500
Income from manure is not assumed as it is used on the own farm for fodder cultivation.
Sale of Gunny bags (Rs./bag)10
Repayment norms:
Repayment period (years)6
Grace Period (years)1
Interest rate(%)12
 Sl. No. ParticularsYear
 A.Opening Stock – Adult Rams4444444
Adult Ewe purchased stock100100100100100100100
 B.No of lamb born858585858585
Male Lambs102102102102102102
Female Lambs102102102102102102
Male Lambs101010101010
Female Lambs101010101010
 D.Sale of young lamb
A-Capital cost(Amount in Rs.)
Construction low cost  Shed for 100Ewes  @ 10sq.ft/adult Ewe(Rs.200/sq.ft200000
 Construction of  Shed for 4 Ram@20sq.ft/buck(Rs.200/sq.ft buck shed )16000
Construction of Shed for 102 lambs @4 sq.ft./ lambs (408sq.ft)@(Rs.200/sqft81600
Equipment feeding trough buckets etc10000
Cost of 100 Ewes@ 4500/Ewe including insurance and transportation450000
Cost of 4 Ram@6500/buck                           26000
Borewell with a pump set90000
TOTAL CAPITAL COST                                                  873600
Working Capital
Wages for one  labour @6000/month  for 1 year72000
Cost of concentrate feed for 100 Ewes @6.75kg/month/Ewe for two months i.e  kg@18/kg23400
Cost of concentrate feed for 4 Ram @7.5kg/adult animal for two months @ 16/kg 1080
Cost of concentrate feed for 102 lambs@3.75 kg/lamb /month i.e  900kg for  one month @18/kg6885
Fodder cultivation in 1.hector  of land30000
Misc, expenditure i.e.  vaccine medicine and veterinary aid and electricity30000
Total Working Capital                                                         176400
TOTAL PROJECT COST              1050000
Bank loan @75% of project cost787500
Margin money @25% of the project cost    262500
CASH FLOWProject period (year) Amount in Rs.
Wages for  labour @200/day for 1 year72000720007200072000720007200072000
Cost of insurance 5% of animal costIncluded238002380023800238002380023800
Cost of concentrate feed for buck Ewes and lambs31365313653136531365313653136531365
Fodder cultivation  of land@30000/acre/hector30000300003000030000300003000030000
Misc, expenditure i.e.  vaccine medicine and veterinary aid electricity30000300003000030000300003000030000
Total expenditure163365187165187165187165187165187165163365
The sale price of male Sheep @ 3800 young Male lamb349600349600349600349600349600349600
The sale price of female Sheep@3500Young Female ewe322000322000322000322000322000322000
The sale price of gunny bag460460460460460460460
Value of closing stock 100 Ewe,  4 rams, @ average 3000/adult & 102 lambs @ 1500/lamb465000
Value of shed (10% depreciation/year)89280
Value of equipment(20% depreciation /year) –
Gross profit-1629054848954848954848954848954848951062975
Capital Costs873600
Recurring Cost163365187165187165187165187165187165163365
Total Costs1036965187165187165187165187165187165163365
Net Benefit-10365054848954848954848954848954848951062975
Sl noFinancial indicatorsEstimated valuePreferred value
1Net Present Worth (NPW961384.24Should be +ve
2Benefit-Cost Ratio(BCR)1.6:1>1
3Internal Rate of return (IRR)29.3>15%
4Debt Service Coverage Ratio (DSCR)2.67>1.5

Loan Repayment  for 100 animal  sheep farm:- Repayment of loan will start after grace period of one year. Total loan repayment period is 6-7 years. Details of  monthly installment, interest payment, principal payment and balance  is given in repayment schedule for 100 sheep.

DISCLAIMER:-The views expressed in this model project are advisory in nature. This website assumes no financial liability for anyone using this project report for any purpose.