The economic rationale for the production of edible eggs in family farms in Ukraine

Abstract

The article presents the results of research on the economic and investment effectiveness of creating a family farm to produce organic chicken eggs to ensure the population's food needs and promote fair competition in the domestic market of Ukraine. The planning of the leading indicators of the efficiency of egg production takes into account the technological features of the free-range system of keeping poultry, as well as the features of the economy of poultry farming in the egg sector in the market conditions of Ukraine. The planning of fixed and working capital, which is necessary for the organization of production of organic eggs in newly created family farms on the resource base of households in Ukraine, has been carried out. The main technological parameters of egg production, which will ensure the profitability of this type of business, have been determined. According to the study's results, it was established that the organization of organic egg production in family-type farms is one of the economically efficient types of agricultural business in Ukraine. It was established that for the organization of egg production in family farms with 600 laying hens, it is necessary to invest about 36,000 euros, including 30,000 euros of fixed capital. Planned capital costs can be significantly reduced if the necessary material and technical resources are available, or part of them in households, based on which it is planned to create a family farm, which belongs to more efficient commercial forms of business in agriculture. It is estimated that over three years of project implementation, the farm will receive a total of 45,000 euros of net cash flow from net profit, depreciation, and fixed wages of family farm members. The projected net return on capital in the first year of project implementation will reach 29.4 %. It will gradually decrease due to a reduction in production and sales volume due to a decrease in chickens' productivity level. It was determined that the ratio of net cash flow for the year to the value of the farm's capital would be 50% at the end of the first year and about 40 % at the end of the project implementation period. The projected payback of the project will be 2.5 years with a return on investment of 126 %.