ECONOMIC EFFICIENCY AND PROFITABILITY OF PRODUCING HATCHING EGGS AND COMMERCIAL DAY-OLD CHICKS: A COMPARATIVE ANALYSIS OF THREE POULTRY BREEDING CENTERS IN BHUTAN

Abstract

Poultry production plays an important role in rural livelihoods and food security in Bhutan, yet limited studies exist on its cost structures. The aim of this study was to investigate the financial efficiency and profitability of three regional poultry breeding centers in Bhutan namely Regional Poultry Breeding Center (Paro), National Poultry Development Center (Sarpang), and Regional Pig and Poultry Breeding Center (Lingmithang) to understand their economic performance and financial viability. Through comparative cost analysis and financial indicators such as Return on Investment (ROI), Break-even Point (BEP), and Benefit-Cost Ratio (BCR), the research identified key cost drivers and performance disparities among the centers. Feed emerged as the highest cost contributor, comprising over 56% of the total cost of production across all the centers, followed by labor cost, which ranged from 25.79% to 34.74%. The cost of producing a hatching egg varied from Nu. 19 at RPBC to Nu. 31 at RPPBC, while the cost per DOC ranged from Nu. 49 to Nu. 70. Despite these operations, all centers operated at a loss during the production cycle of 2023-2024, with ROI figures falling between – 68.05% and – 76.16%. The current subsidized DOC selling price of Nu. 30 is insufficient, with break-even prices estimated at Nu. 93.30 (RPBC), Nu. 125.84 (NPDC), and Nu. 135.31 (RPPBC). The findings point to inefficiencies rooted in cost management and infrastructure, underscoring the need for region-specific strategies, such as improved feed utilization and labor productivity, to strengthen the long-term viability of Bhutan’s poultry breeding centers.