Chickens are the lease expensive animal to start with. Chickens multiply quickly and you don't have to buy anything special in order to make them breed. You can buy a chicken one day, and the next day you've got an egg to hatch into another chicken.
The Chicken Coop is located just to the right of the Cow barn. You can buy your first chicken from Chet for 1000G. Chet will require that you have planted 9 bags of grass back behind in the pasture area. After you buy your chicken remember to go back to the Coop to feed it. You need to feed your chickens every day in order to produce eggs. You don't have to brush your chickens or shampoo them. The only special treatment they can get is you picking them up. Chickens seem to like being picked up and touched, and they will flap their wings to show you they like it.
The inside of the Chicken Coop is much roomier then the insides of the other two barns. The chickens don't stand still for very long, so they are constantly wandering around in their home. In the upper left corner is their feed bin. You can have four chunks of grass sitting next to each other in the feed bin. The grass comes from the bin that is in the upper right corner of the Coop. If you run out of grass to feed your chickens and you've purchased feed from Chet, it will be next to the grass bin. If you don't feed your chickens, they won't produce eggs for three days. Remember you have to feed them even though they're not happy with you!
Every morning there will be four eggs for you to sell. To sell and egg, just pick it up and toss it into the shipping bin in the lower left corner of the Coop. Eggs are 50G each. If instead you want to hatch the egg there is an egg incubator in the lower right corner of the barn. Place the egg inside the incubator and in 7 days you'll have a baby chicken. Baby chickens don't need to be fed so you don't have to worry about putting grass in the feeding bin. After 8 more days as a chick it becomes an adult chicken.
Sometimes when a baby chick becomes a chicken it's not a happy chicken. To find out if you have a happy chicken or an unhappy one, go to your inventory screen (Press SELECT twice) and pick the chicken category. You can see if each chicken is happy or not, and even how long you have to wait if you have an egg in the incubator. If your new chicken is unhappy you can choose to wait three days and see if it becomes happy or you can just go to Chet, sell the unhappy chicken for 500G, and hatch a new one.
Chickens like to go outside just like the cows and sheep. When you buy your first chicken, Chet will give you a Whistle. You can use the Whistle outside in the chicken pasture and all of the chickens and chicks will appear outside. Likewise to bring chickens back inside just blow the Whistle when you're in the Coop. You can also carry your chickens outside and drop them off in the pasture. You can even take your chickens into the village! You can't drop them off in the village though. Maybe they're too scared to get off your head.
If you have a friend who also has Harvest Moon 2, you can trade chickens via the computer at Mary's Library using your Gameboy link cable. If you receive one of your friends chickens and then go check in your Coop, you'll notice you have a Golden Chicken! Golden Chickens of course lay golden eggs and the eggs sell for 500G each. If you want you can sell your Golden Chicken to Chet. He'll give you 10000G for just one Golden Chicken! You can also hatch more Golden Chickens out of golden eggs. You could eventually have a chicken coop filled with Golden Chickens and making a 2000G profit just on eggs every day!