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Abstract

The chicken production in Viçosa area is done by integration agreement with Pif Paf Company and it is an important option for incre-asing the income of small farmers. The objective of this paper is to check the viability of integration agreements. A project of a plant for chicken production was drawn and observed in order to determine its profitabi-lity and risks, with the purpose of helping the decision making. The Net Present Value, Internal Rate of Return, Cost/Benefit Ratio, Risk Sensitivity and Risk Analysis were calculated. The results show that the project is fea-sible and the profitability is more sensitive to changes in production price than changes in production costs. This study also points out that the in-tegration agreement does not eliminate the risk of the production, in other words, the company transfers part of the price risk to the producers.

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