Cost-benefit analysis of improving housing conditions for poultry in Ukraine

VetEffecT has been awarded a framework contract project in Ukraine for the EBRD. The purpose of the assignment is to perform a cost-benefit analysis of replacing the existing non-EU compliant cages of a large layer poultry farming with each of three possible options: free range, barns (like those used for broilers) and aviary systems (multi-layered open cages), to provide a business case, and prepare a presentation on the subject.

For the company we will make an analysis of the current situation with focus on poultry houses, equipment and management. We will collect information on the economic and financial situation and calculate the production cost of egg for each location of the farm. In addition we will collect market prices of eggs for this company and in Ukraine. Based on this information we can analyse the perspective to change to alternative housing systems, such as enriched cage or the barn system. For the cost-benefit analysis and business case we will include an

a) investment plan and

b) a feasibility study: changing to more animal friendly housing systems requires adjusting farm practices with consequences for staff, which is crucial to take into consideration.

In particular, the scope of work for this assignment is as follows:

1.      Cost-benefit analysis on upgrading agribusiness operations of layer farms of one company

-        visit facilities, sites or farms (in/near Poltava, Dnipropetrovsk and Zaporizja) belonging to one and the same agribusiness company;

-        carry out a cost-benefit analysis on upgrading the agribusiness operations of this company to enhance animal welfare (e.g. replacement of cages for free range and animal welfare enriched egg production) with as ultimate goal to have better access to the export markets (i.e. EU market);

2.      Business case

-        to prepare a report on the business case for improved animal welfare with a focus on cases where specific standards are not compulsory for export markets, building on findings and further research. The report will outline the potential for increasing productivity, product safety/quality and competitiveness through enhancing animal welfare, and will estimate the investment required and the potential returns, based on different criteria such as product pricing, company reputation, consumer willingness to pay, etc.;

-        the report should be presented as one report from the perspective of a layer poultry farming operation representative for Ukraine and assess it as a general report for Ukrainian layer poultry farming;

3.      Presentation

-        Develop a presentation on the benefits for poultry layer farms on improving animal welfare practices;

-        Identify at least three events across agribusiness sub-sectors in different countries, where these could be presented to raise companies’ awareness of the benefits of improved animal welfare.