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Poultry contract farming

Poultry (Broiler) Contract Farming in India

How the integrator model works, what you invest in the shed, how your growing fee is worked out, which companies run it, and the clauses to check before you sign.

How does poultry contract farming work?

In broiler contract farming, an integrator company supplies day-old chicks, feed, medicines and vaccines and takes back the grown birds. The farmer provides the shed, equipment, labour, water and power, and is paid a growing fee worked out from live weight, feed conversion (FCR) and mortality. The rate is set in each company’s contract.

Have land and want to start poultry contract farming? Send us the integrator’s contract and we review it before you sign.

How the integrator model works

In broiler integration, companies (integrators) run the parent farms, hatcheries and feed mills, and place chicks with contract farmers who raise them. The Asian Development Bank describes Suguna Foods’ model like this: the company provides almost all inputs, such as chicks, feed, medicine and vaccines; farmers provide land, sheds, equipment and labour, pay for electricity, water and litter, and are paid according to a predetermined fee schedule based on their rearing performance (Source: ADB Brief No. 275, November 2023).

Because the company owns the birds and the feed, the farmer is not selling chickens. The farmer is paid for the work of raising them. That is why the contract’s fee formula matters more than the market price of chicken.

ItemIntegrator (company)Farmer
Day-old chicksSupplies (and usually owns the birds)Raises them
FeedSuppliesFeeds as per schedule, avoids wastage
Medicines and vaccinesSupplies, with vet / supervisor visitsGives them on time
Land and shedSets the minimum shed sizeBuilds and owns
Equipment (feeders, drinkers, brooders)SpecifiesBuys
Labour, water, electricity, litter—Pays for
Lifting and sale of grown birdsCollects and marketsHands over at the agreed age/weight
PaymentPays a growing fee per the fee scheduleEarns it, plus manure and bag sales
Who provides what in a typical broiler integration contract. Source: ADB Brief No. 275 (Nov 2023); individual contracts differ.

What a farmer invests

The farmer’s main cost is the shed. The National Cooperative Development Corporation’s sample detailed project report for a broiler rearing farm plans 1 sq ft of shed floor per bird: five sheds of 5,000 sq ft, each holding 5,000 birds. That works out to about 1,000 sq ft per 1,000 birds. The same report costed the sheds at ₹125 lakh for 25,000 sq ft, about ₹500 per sq ft, with birds reared for 30 to 35 days and a week’s gap for cleaning, giving 8 batches a year (Source: NCDC, Sample DPR, Establishment of Broiler Rearing Farm, 2018).

Treat these as planning figures, not a quote. NCDC’s example is an owner-run farm, the costs are from 2018, and they leave out land, the borewell, power connection and equipment. Integrators also set their own minimum shed area per bird and minimum flock size: the ADB found that contract farmers need land for sheds that meet Suguna’s minimums (ADB Brief No. 275). Get the integrator’s shed specification in writing before you build.

1 sq ft per bird

shed floor space used in NCDC’s sample broiler project: about 5,000 sq ft for 5,000 birds

Source: NCDC, Sample DPR, Establishment of Broiler Rearing Farm (2018)

How grower pay is worked out

Contracts usually pay a growing charge per kg of live weight lifted from your shed. The charge is then adjusted for performance:

  • FCR (feed conversion ratio): kg of feed used per kg of live weight. Lower is better; using less of the company’s feed to grow the same weight usually earns an incentive.
  • Mortality: the share of chicks placed that die before lifting. Losses above the target usually bring a deduction.
  • Production cost chart: some integrators work out the rate from the cost of producing each kg (chicks, feed and medicine used). A study of 49 contract growers in Puducherry found pay was based mostly on production cost and suggested FCR-based pay instead, because farmers have little control over input quality (Source: Thamizhselvi and Rao, Indian Journal of Animal Sciences, 2010).

Rates vary by company, region, season and FCR, and they are set in each contract. We have not found a current, dated public rate card, so we do not quote a ₹/kg figure. Ask the integrator for the full formula and a sample settlement sheet.

One documented example

A University of Agricultural Sciences, Bengaluru study of 30 contract broiler farmers in Chintamani taluk, Chikkaballapur district (Karnataka) found:

Measure (per batch)Value found
Average flock size12,383 birds
Live weight per bird2.26 kg
FCR1.74
Total cost to the farmer₹1,32,627
Gross returns₹1,51,102 (rearing charges about 70%, the rest mostly manure sales)
Net return₹18,474
Source: Aravinda B.J., Integration in Poultry Industry: A Study of Broiler Production in Chikkaballapur District of Karnataka, M.Sc. thesis, UAS Bengaluru, 2019. One area, one period; not a forecast.

The study named high bird mortality as the main production problem and price swings as the main marketing problem. The lesson for a new grower: margins per bird are thin, so mortality, FCR and the number of batches a year decide whether the shed pays back.

The main poultry integrators in India

Public facts only, from the source named against each. We do not rank them, and we list no rates or contact numbers. Other integrators work regionally; we list only those whose facts we could check. For contract programmes in other crops, see our crop-wise list of contract farming companies in India.

Suguna Foods

Coimbatore, Tamil Nadu; 19 states

Contracts with around 40,000 farmers. Supplies chicks, feed, medicine and vaccines; farmers provide land, sheds, equipment and labour and are paid on a predetermined fee schedule based on rearing performance.

Source: Asian Development Bank, ADB Brief No. 275, November 2023

IB Group

Rajnandgaon, Chhattisgarh; chicks sold in 22 states

Works with more than 21,000 contract farmers.

Source: Aviagen India press release, 4 June 2024

Venky's (VH Group)

Registered office Pune, Maharashtra

Integrated group with parent farms, hatcheries and feed; named among the major broiler integrators supplying lakhs of chicks a week.

Source: Venky's (India) Ltd annual report; Rural World magazine (Budget 2024-25 issue)

Baramati Agro

Maharashtra

Own parent farms, hatchery, feed mills and processing plant; reports over 1,500 farmer members and 3,000 contract broiler farms.

Source: Baramati Agro company website

Shalimar Group

Kolkata; mainly eastern and north-eastern India

Integrated from feed and breeder farms to hatchery, broiler farming and processing; over four decades in poultry.

Source: ICRA rating rationale

Simran Farms

Indore, Madhya Pradesh

Contract rearing farms in Madhya Pradesh, Chhattisgarh, Gujarat, Rajasthan, Punjab, Jammu and Maharashtra.

Source: Company profile (BSE-listed company)

Godrej Agrovet

Mumbai, Maharashtra

Poultry and processed foods through Godrej Tyson Foods; at the 2008 joint-venture launch its processing was supplied by contracted hatcheries and contracted broiler farms (dated; check the current set-up).

Source: Tyson Foods press release, June 2008

Listing is not an endorsement

We are not affiliated with these companies. Figures are as reported on the dates shown and will have changed. Check current terms with the company’s local office.

Offered an integration contract? Send it to us. We explain every clause in plain language and flag what to change.

Contract clauses to check before you sign

A shed is a large, fixed investment, and the integrator usually writes the contract. Read these clauses closely, or have them reviewed for you.

Chick quality

Does the contract set a minimum day-old chick weight and health standard, and what happens if chicks arrive weak? A study of 49 contract growers in Puducherry found contracts set output standards for the farmer but none for the chicks, feed and medicine the integrator supplied, and chicks often weighed less than the 40 g standard.

The growing-fee formula

Is the rate per kg written down, with the exact formula for FCR and mortality incentives and penalties? Ask for a worked example on paper for a good batch and a bad batch.

Weighing and lifting

Where and on whose scale are birds weighed, and can you be present? If lifting is late, who pays for the extra feed and the extra mortality?

Number of batches

Is there a minimum number of batches a year? Your shed loan EMI runs whether or not chicks are placed.

Deductions and deposits

List every deduction (feed shortage, medicine, transport) and any security deposit, and when the deposit is returned.

Payment date

How many days after lifting is the grower paid, by bank transfer, with a settlement sheet showing chicks placed, birds lifted, weight, feed used and the calculation?

Disease and culling

What happens in a bird-flu outbreak or government culling order: who bears the loss, and is any compensation passed on to you?

Term, exit and disputes

How long is the agreement, how can either side end it, and who decides a dispute? A clear notice period and a neutral route (conciliation, then the authority named under your state’s rules) protect you.

On the law

Contract farming runs under state laws and APMC rules; the Centre’s Model Agricultural Produce and Livestock Contract Farming and Services Act, 2018 is a template that covers livestock too, and states adopt it in their own way. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 was repealed by the Farm Laws Repeal Act, 2021. See contract farming explained and our poultry and dairy crop guide.

FAQ

Poultry contract farming: common questions

How does poultry contract farming work?

An integrator company supplies day-old chicks, feed, medicines and vaccines, and collects the grown birds after about five to six weeks. The farmer provides the land, shed, equipment, labour, water and electricity. The farmer is paid a growing fee for each batch, worked out from the live weight lifted, the feed used (FCR) and mortality.

How much investment is needed for 5,000 birds?

NCDC’s sample project report for a broiler farm plans 1 sq ft of shed per bird, so about 5,000 sq ft for 5,000 birds, and costed the shed at about ₹500 per sq ft in 2018, roughly ₹25 lakh for the shed alone. Land, water, power, equipment and today’s building costs come on top, so take current local quotes. The integrator may set its own minimum shed size and batch size.

How is the grower paid?

Usually as a growing charge per kg of live weight lifted, with incentives for a better feed conversion ratio (FCR) and lower mortality and deductions when targets are missed. Some contracts tie the rate to a production-cost chart instead. The rate and the formula vary by company, region and season and are set in each contract, so ask for them in writing.

Does Suguna do contract farming?

Yes. Suguna Foods, based in Coimbatore, contracts with around 40,000 broiler farmers in 19 states, according to an Asian Development Bank brief from November 2023. It supplies chicks, feed, medicine and vaccines; farmers provide the shed and labour and are paid on a performance-based fee schedule. Ask Suguna’s local branch for its current terms in your district.

Does IB Group do contract farming?

Yes. IB Group, headquartered in Rajnandgaon, Chhattisgarh, works with more than 21,000 contract farmers and sells chicks in 22 states, according to an Aviagen India press release from June 2024. Its terms, including the growing charge, are set in its own agreement, so read that agreement before building a shed.

Which are the best poultry contract farming companies?

We do not rank integrators. The right one for you is the one with a reliable chick supply and lifting schedule in your area and a contract with a clear fee formula, payment date and dispute route. Speak to growers who have worked with the company for several batches before you commit.

Is broiler contract farming profitable?

It can be, but margins per bird are thin and depend on mortality, FCR and how many batches you get a year. A 2019 University of Agricultural Sciences, Bengaluru study of 30 contract farmers found a net return of about ₹18,474 per batch of around 12,000 birds. Your result depends on your shed cost, your management and your contract.

Contract Farming India (contractfarmingindia.com), an advisory service of Agpro Consulting Private Limited, New Delhi, helps companies, farmers/FPOs and landowners set up fair contract-farming and land-lease arrangements. We advise and facilitate; we are not a party to any contract between a farmer and an integrator, and we do not guarantee placements, rates or income. General information, not legal or financial advice. Facts as of October 2026.

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