WOLKITE UNIVERSITY

College of Agriculture and Natural Resources

Department of Animal Production and Technology

PROJECT PROPOSAL ON CATTLE FATTENING FARM

Prepared By:
Tesfaye Feyisa (MSc)

Wolkite University
September, 30/2015

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Table of Contents
Executive summery……………………………………………………………………………..II
Lists of tables………………………………………………………………………...................III
1. INTRODUCTION…………………………………………………………………………….1
2. CATTLE (CULL OXEN) FATTENING………………………………………………..…...2
2.1. The traditional highland practice………………………………………………………2
2.2. By product based fattening of oxen………………………………………………….....2
2.3. The Hararghe fattening system.………………………………………………….……2
3. PROJECT LOCATION………………………...…………………………………………….3
3.1. Agro ecology…………….……………………………………………………………....3
3.2.Watersource….………………………………………………………………………..3
3.3. Cattle breed………………………………………………………………………….....3
3.4. Feed sources..…………………………………………………………………………...3
4. CATTLE FATTENING MANAGEMENT……………………………………….………...4
4.1. Feeding practice…………………………………………………………………….......4
4.2. Deworming and spraying…………………………………………………………...…4
4.3. Disease prevention……………………………………….…………………………..…4
4.4. Housing…………………………………………………………………….....................4
5. FINANCIAL ANALYSIS ………………………………….....................................................5
5.1. Estimation and Assumptions made…………………………………............................5
5.1.1. Cost Estimation………………………………….......................................................5
5.1.2. Capital Investment…………………………………...................................................5
5.1.3. Replacement of capital Items ………………………………….................................5
5.1.4. Operational cost …………………………………......................................................6
5.1.4.1. Direct operation cost …………………………………...........................................6
5.2. Assumptions …………………………………................................................................6
5.3. Implementation Schedule…………………………………...........................................6
5.4. Revenue ………………………………….......................................................................6
Appendixes Breakdown of working capital and design of the house
I

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Summery
WKU is a newly established University in south western part of Ethiopia. Currently, the
department of Animal production and Technology has 177 students, 42 first year, 32 students
second year, 36 third year and 67 first year summer students. It is a solid fact that these students
should get practical training to enrich their skill so that they will be competent in market.
However, as the department and the University are new, students of Animal production and
technology are not lucky enough to get in depth practical sessions especially in most elite
Animal Science courses such as poultry, dairy, fish farming, beekeeping, beef farming, forage
and pasture production in their university

The main purpose of this particular project paper is just to fill the gap stated above at least in
establishing beef farming in or around the University that will in turn serves as student’s and
farmers demonstration site, will initiate students and instructors of the department to participate
in research activities and to generate income. Fattening program require its own geographical
areas for fattening.

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 II

Lists of tables Page

Table:1.Total fixed and operational costs of the project…………………………………………5
Table: 2. Assumptions of replacement of fixed capital cost……………………………………6
Table: 3. fixed cost of the Project (Birr) …………………………………………………….…7
Table: 4. Man Power required for the Project………………………………………………..…7
Table: 5. Other Operation Costs required of fattening farm (Financial price)……………...……8
Table: 6. Cost of Animal and Animal feed (Birr)…………………………………………………8
Table: 7. Breakdown of working capital for projection year…………………………………..…9
Table: 8. Production and Revenue projection………………………………………………....10
Table: 9. Projected profit and Loss statement…………………………………………………11

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1. INTRODUCTION

Livestock play a vital role in supporting the livelihoods of millions of people throughout the
developing world. From the households who keep a few chickens in their backyards, to the
pastoralists who treks their herds vast distances. They provide meat, milk, eggs, skins and hides;
they haul carts and ploughs; they power wells and mills; they bring cash and prestige; they act as
savings and insurance. Some 30% of the total human requirements for food and agriculture and
some 70% of the world’s rural poor depend on livestock as a component of their livelihoods.
The varied and extensive agro ecological zones of Ethiopia make the country suitable for many
kinds of livestock in large numbers. Ethiopia has the largest livestock population in Africa
estimated to be 47.57 million cattle, 26.1 million sheep, 21.7 million goats, 1.78 million horses,
5.57 million donkeys, 380 thousand mules, 1 million camels, 39.6 million chicken and 4.7
million beehives.

Though the country has huge livestock resource, the meat productivity is not still subsidize the
people due to some constraints such as poor animal nutrition, animal disease and lack of
knowledge or skill in changing the traditional production system to modern beef cattle
production system. The production system of beef is mainly traditional which indicated that the
produced meat is below the demand. Guraghe zone is not the exception to this and there is the
problem of meat production. Guraghe zone is known for meat consumption mainly which is
known as “kitfo’’ in Amharic. And also the zone is known for the ceremony of “Meskel” during
which a large (huge) number of livestock is demanded to be slaughtered. But regardless of this,
the zone by far lags back to the production of meat and the fattened cattle came from another
zone like Wolliso and other places. Therefore, the main objective of this particular project paper
is just to fill the gap stated above at least in establishing beef farming in or around the wolkite
that will in turn serves as student’s and farmers demonstration site, hotels and cafeterias as a
source of meat and to generate income. It also creates job opportunities for the jobless newly
graduated students. The priorities will be given for the jobless animal science graduate. But, the
main objectives of this project will be to create job opportunities for jobless peoples as
community service so as they will be sufficient enough to help themselves and return it later on.
Therefore, the objectives of the project proposal will be:

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Objectives of the project
 To create job opportunities for jobless graduate students by proving them all the
necessary things
 To train the surrounding community (farmers) regarding the fattening system

2. PROJECT LOCATION
Gurage Zone is one of the zones found in Southern Nations Nationalities and Peoples Regional
State (SNNPRS) located between 7.80 - 8.50 North latitude and 37.50C - 38.70 East longitude of
the equator. Wolkite is the administrative city of the zone located 155 km away from Addis
Ababa to south west direction. Gurage zone covers a total area of 5932km2. It has 13 woredas
with a total population estimated about 1343246 (CSA, 2011). The zone comprises altitudes
ranging from 1,001 to 3,500 meters above sea level (m.a.s.l). It is classified into three agro-
climatic zones: Dega (high altitude) covers 28.3% of the area and ranges between 2,500-3662
m.a.s.l, Woinadega (mid-altitude) at 1,500-2,500 m.a.s.l, encompasses about 64.9% of the area,
and Kolla (lowland) at 1,000-1,500 m.a.s.l covers 6.8% of the area. The mean annual
temperature of the zone ranges between 13-300c and the mean annual rain fall ranges 600-
1600mm. The rainfall pattern in the Gurage Zone is bimodal in which 80% of rain falls in the
Kremt period of June to August whereas 20% in the Belg period of February to May. According
to the land utilization data of the region 298,369 ha cultivated land, 67,678ha forest, bushes and
shrub covered land, 70,249.31ha grazing land, and 14,234 ha of land is covered by others
(GZADD, 2011)
2.1. Agro ecology: Guraghe zone is the most suitable places/area for cattle fattening
2.2. Cattle breed: Even though the cattle breeds are not well characterized in the Gurage area
the total cattle populations are 161,612 heads. This will feed to the project (cattle fattening).
2.3. Feed sources
The zone is conducive for development of different forages. Therefore, green feed availability is
found and somewhat not far from Addis Ababa which indicates that there is the possibilities of
transporting agro-industrial by-products to the project area.

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3. CATTLE FATTENING MANAGEMENT

3.1. Feeding practice

 Feed animals daily with concentrates one to two kilograms per day during fattening
period.
 Give clean water without limit ad libitum. Provide ordinary table salt about 30-50 grams
per head per day.
 Give animals, fresh, palatable feed and clean water at all times. Reduction of intake by
five percent will reduce weight gain by 10 %. Do not overstock feeds in the feed bunk
since the bottom portion will develop heat and make the feed stale
 Digestion will be more efficient if roughage is eaten separately from concentrates.
Roughage conception tends to stimulate saliva secretion up to as much as 80-120 liter per
day.
 Providing 30.5-36 centimeter bunk space per head will allow cattle to eat slowly. This
will help increase the rumen’s efficiency thereby digestion.
 Schedule manure removal. If allowed to remain with animals, deep, wet manure will
reduce both feed intake and weight gain.
3.2. Deworming and spraying
 Have fecal examination conducted to determine proper drugs to deworm.
 Spray animals to control external parasites such as ticks, lice and flies.
3.3. Disease prevention
 Never buy sick cattle. Make sure the animals are not stressed. Provide a good sanitation.
 Proper nutrition helps ensure the health of cattle and increase their resistance to disease.
 Don’t mix newly arrived animals with cattle already on feed.
 Be apart for signs of illness. Isolate sick animals right away
3.4. Housing
 Proper housing is important in successful cattle fattening operation.
 Adequately protect animals against the adverse effect of weather.
 Building height ranges from 2 to 2.5 meters.
 Each animal can be allocated with 1.7 to 4.5 sq. meters.

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4) EXPECTED OUTPUT

The project will have the following outputs:-

For the community: - This study will introduce food production in the form of meat to the
farmers and incomes to the community.
Promoting awareness: - This project will create awared society on different aspects of beef
managements (selecting best breed, housing, feeding practices, disease prevention and marketing
of live animal and by products). .
Poverty alleviation and livelihood improvement: - It will contribute to achieving food security
and poverty alleviation through better farming system.
Researchers: The data generated and recommendations made will be utilized at baseline
information by interested researchers in the areas of fish breeding, fish nutrition and fish
production etc.
Students: students will have a good knowledge in several courses as a practical and research
works.

5) Benefits and Beneficiaries

The implementation of this project will be benefiting the students, cooperative, surrounding
community (farmers), and small scale beef producer of the area. The major benefits of the
project will be for the community such as; creating job opportunities for the jobless peoples by
organizing them. It is also evident that the surrounding community will get training (knowledge)
from it.

4. FINANCIAL ANALYSIS
4.1. Estimation and Assumptions made
4.1.1. Cost Estimation

The total fixed and operational costs of the project are summarized in the following Table. The
costs are presented by sub headings that reflect the major components of the project. Breakdown
of the expenditure by items are given for each component. The estimated total cost of the project
for the first year is about 1,958,803 Birr.
Table:1 Total fixed and operational costs of the project
Capital Investment GOs NGOs Total

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A. Fixed capital
- Farm equipment &tools 3320
- Construction 114,400
Sub total 117,720
B. Working capital
- Direct Operation cost 1541710
- Other operation cost 121,300
Sub total 1,663,010
Total 1,780,730
Contingency (10%) 178,073.0
Grand total 1,958,803
Ratio of source of capital

4.1.2. Capital Investment

The total initial capital investment of the project is 1,958,803 Birr which is to be financed by the
Wolkite University from community service budget. The university will finance the project only
for the first two project years, and after two years the project are sufficient enough to continue by
the profit that came from the project. And also the costs financed by the university should be
returned back for the university after two years. Before the project will begin, there should be
contractual agreement between the university and the cooperated persons to return the expenses
that used for the project after two years and all of the expenses should be returned within ten
years of the project depend up on the agreement. The capital investment is to be used for the
purchase of agricultural machine, farm tools and building construction.

4.1.3. Replacement of Capital Items

The following assumptions have been made regarding replacement of fixed capital cost.
Table: 2 Assumptions of replacement of fixed capital cost

Replacement Rate of Annual

Capital Item
Year Depreciation Depreciation
Building construction 10 10% 11,440
Farm equipment and totals 10 10% 332
Total Annual depreciation 11,772

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5.1.4. Operational cost

5.1.4.1. Direct operation cost

The direct production cost is determined on the basis of machinery and labour operation and
material requirements.
1/ Labour Operation
This project is assumed to be carried out by the cooperated persons to whom this project used
for. Because of this there is no labour cost taken in this project.
2/ Material requirements
Daily feed intake and water consumption of the animals were estimated according to national
research council (NRC). Other operation costs are also included under this category.

5.2. Assumptions
The following assumptions are made in the project analysis.
A/ Contingency is calculated at 10% for capital investment and operational cost
B/ A Staff clothing is assumed at birr 200 per person every year.
C/ Repair and maintenance on investment items are assumed to be 1.5% of original value.
D) Peridium rate of Birr 171 per head for 100 days per annum is assumed.

5.3. Implementation Schedule

Implementation of the project is scheduled to take place as soon as the project is approved by
Wolkite University and the budget will be released.

5.4. Revenue
The revenue is obtained through selling fattened stock. The current market price is taken in
calculating revenue from the project. Any increase in expenses is assumed to be compensated by
proportional increase in sales revenue.
Annex A: Financial Analysis of the fattening Project
Table: 3 Fixed Cost of the Project (Birr)

Sr. No Description Unit Qty Unit Total

price cost
1 Animal Shade (27m x 10.2) = 275.4m2 Number - 37,500 37,500
2 Hay Store (5m x10m) = 50m2 ’’ 1 20,000 20,000
3 Feed Store (5m x 6m)=30m2 ’’ 1 15,000 15,000

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 4 Feeding trough ’’ 1 5,000 5,000
5 Water trough(1m x 2m) = 2m2 ’’ 1 5,000 5,000
6 Isolation pen (7m x 5m) = 35m2 ’’ 1 5,000 5,000
7 Guard House (3m x3m) = 9m2 ’’ 1 1,500 1,500
8 Fence Establishment ’’ 1 20,000 20,000
9 Establishment of Silage pit ’’ 1 5,400 5,400
Subtotal 114,400
Equipments
1 Knapsack Number 1 600.00 600.00
2 Bucket Number 5 30.00 150.00
3 Spade Number 4 50.00 200.00
4 Rake Number 3 30.00 90.00
5 Watering Tube Meter 100 5.00 500.00
6 Fire extinguisher Number 1 300.00 300.00
7 Thermometer Number 2 100.00 200.00
8 Heart girth meter Number 2 100.00 200.00
9 Vaccination string Number 2 300.00 600.00
10 Different record books Number 4 30.00 120.00
11 Sickles Number 12 30.00 360.00
Subtotal 3320
Grand total 117,720

Table: 4. Other Operation Costs required for fattening farm (Financial price)

Sr. Description Unit Quantity Unit Total cost per

No Price Annum
1 Medication Fee 1000
2 Fuel & Transportation Cost 52500
3 Electricity 1200
4 Perdium 17,100
5 Stationary 5000
6 Uniform & clothing 1000
7 Communication 1000
8 Repairing and maintenance 2500
9 Document preparation and Consultant fee
5.1. Project document preparation 15,000
5.2. Production supervisor 15,000
5.3. Health consultant 10,000
Subtotal 121,300

Table: 5. Cost of Animal and Animal feed (Birr)

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Description Number of Kg of Price/kg Price/animal No. of Total For three
Animals/steers/ feed/day days batch
Purchase of steers 55 8000 440,000 1320000

Animal feed 55 4.33 3 300 214335 214335

Total 1,534,335

Table 6: Training Expense

No Descriptions Number of Persons Number of Perdium Total
days rate/day
1 Trainer 3 5 171 2565
2 Facilitator 2 5 171 1710
3 Trainee 5 5 124 3100
Total 7375

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Annex; Breakdown of working capital for projection year

Table:7. Breakdown of working capital

Project years
Description 1 2 3 4 5 6 7 8 9 10
Direct production
Feed Purch. 214335 214335 214335 214335 214335 214335 214335 214335 214335 214335
Medication fee 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
Purchasing cost of steers 1320,000 1320000 1320000 1320000 1320000 1320000 1320000 1320000 1320000 1320000
Preparation of document 40,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000
& consultant
Perdium 17,100 17,100 17,100 17,100 17,100 17,100 17,100 17,100 17,100 17,100
Electricity 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200
Repair & maintenance 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500
Stationary 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
Uniform & clothing 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
Communication 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
Fuel and transportation 52500 52500 52500 52500 52500 52500 52500 52500 52500 52500
Grand total 1655635 1640635 1640635 1640635 1640635 1640635 1640635 1640635 1640635 1640635

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Table: 8 Production and Revenue projection

Ye Expense Income Total Revenue Remark=one

ar No. of Animals Unit Total No. of Unit Total Revenu Revenu annum contains
purchased pric price Animals price e/batch e/annu three batch
price/batch
e sold m
1 55 8000 440,000 55 18000 990000 550,000 1650000
2 55 8000 440,000 55 18000 990000 550,000 1650000
3 55 8000 440,000 55 18000 990000 550,000 1650000
4 55 8000 440,000 55 18000 990000 550,000 1650000
5 55 8000 440,000 55 18000 990000 550,000 1650000
6 55 8000 440,000 55 18000 990000 550,000 1650000
7 55 8000 440,000 55 18000 990000 550,000 1650000
8 55 8000 440,000 55 18000 990000 550,000 1650000
9 55 8000 440,000 55 18000 990000 550,000 1650000
10 55 8000 440,000 55 18000 990000 550,000 1650000