"If you know how to read, why are you just a shepherd?" is the correct answer, because you are directly asking someone a question. "Why you are" can be used in a sentence such as "I don't know why you are doing this..." but the first sentence is correct in the context you provided.

If you know how to read, why are you just a shepherd? (O) or If you know how to read, could you tell me why you are just a shepherd? (O)

You are asking a question, so use the question form: "why are you...?"