Farm-Level Economics, Services & Constraints of Cattle

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Farm-Level Economics, Services
Constraintsof Cattle farming in Smallholder
Cattle Farming Systemsin Up-Country Wet-Zone,
Sri Lanka. Kumara Mahipala MBP Department
of Animal Science University of Peradeniya Sri
Lanka email pmahi_at_pdn.ac.lk
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Significant features of dairy industry in Sri
Lanka

• Low per capita milk consumption (36 kg vs. 42 kg
  recommendation)
• High dependence on imports (43, 483,000 MT, Rs.
  7543 million)
• Low productivity of cattle (highest 4.1 L/cow/d)
• Marginal growth rate (2)
• Different cattle farming systems

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Forage sources
Milk-based system
Vegetable-based system
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• Manure is wasted
• in Milk-based system

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• Problems faced by dairy industry
• Farmers move out claiming low returns
• Less attracted by youth

• Study objectives
• Investigate compare farm-level economics,
  technical efficiency estimates, services
  constraints of smallholder Milk-based
  Vegetable-based cattle farming systems in
  Up-Country Wet-Zone of Sri Lanka

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METHODOLOGY
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Study area Nuwara-Eliya district, UCWZ

• Favorable climate for cattle
• Temperature 220C
• Mean rainfall 1400 mm

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• Rear, pure/ cross, temperate, improved, dairy
  cattle
• Reported the highest,
• - domestic milk production (8.62)
• - milk density (21.52 L/km2/d)
• - cow milk productivity (4.41 L/cow/d)

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• Data collection
• PRA, followed by a survey using a pre-tested,
  structured questionnaire
• Cattle farmers blocked based on milk supplier
• Milk marketing data obtained from collector

• Data analysis
• Farm-level budgets
• Technical efficiencies
• Services
• Constraints

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Analysis of farm-level budgets - Compared
budgets of 2 farming systems using t test -
Recurrent expenditure (maintenance
cost) Concentrate feed mineral supplements
costs Veterinary services drugs costs
Breeding cost Labour cost (based on time
spent for dairying) - Revenue from
outputs Milk Manure Excess cattle sales
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Analysis of technical efficiencies - TE is the
ratio between actual potential outputs - TE
of each cattle farm estimated based on the
stochastic production frontier model using
FRONTIER 4.1 software - Compared TE
of two farming systems using t test
- Dependent variables Milk revenue Total
revenue (milk, manure excess cattle)
- Independent variables Cows per herd () Cost
of concentrates minerals Cost of veterinary
service drugs Cost of breeding Cost of labour
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Analysis of services constraints Identified,
- characteristics of input output
markets - government intervention
services - level of satisfaction on veterinary,
para-veterinary (AI) milk collecting
networks - most significant constraints (5)
using Fishers Exact Test according to the
perception of cattle farmers.
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FINDINGS DISCUSSION
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Characters of milk market

• Multiple collectors
• - Milk Industries of Lanka Co. Ltd. (MILCO)
• - Is the government arm in dairy industry
• - Nestle Lanka Ltd.
• - Small scale private collectors
• - Hoteliers

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• Compete each other through,
• - collect at farm gate - MILCO Private
• - pricing policy - MILCO Nestle ? Fat SNF
• - price - Hoteliers gt MILCO gt Nestle gt Private
• - concentrate supply - MILCO ? dairy-mix
• Nestle ? rice bran
• - loan - Nestle
• - Private Hoteliers (money lending)
• - institution building - MILCO ? Farmer Managed
  Societies

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Farmer Managed Societies (FMS)

• Farmers organized to collect, test managed the
  society

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Related other markets

• Cattle market - Utterly unorganized
• Manure market - Well organized
• AI market - Private AI technicians
• Labour market - Well established
• in vegetable-based system

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• Government intervention
• Veterinary service - Free service
  - Drugs for cost
• AI service (LDI Private AI) - Subsidized rate
  (Rs. 20/)
• Institution strengthening - Establish FMS
  through MILCO

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Monthly recurrent expenditure (Rs/CU)

• Cost of cattle farming (per CU) greater in
  Milk-based system

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Monthly recurrent expenditure (Rs/herd)

• Despite larger herd size in Vegetable-based
  system (3.94 vs. 3.26), expenditure on
  concentrates (per herd) is not different due to
  greater use of cheap ingredients

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Monthly revenue (Rs/CU)

• Vegetable-based system generates greater revenue
  from manure by efficient manure management

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Monthly revenue (Rs/herd)

• Vegetable-based system generates greater total
  revenue by better herd manure management
  practices

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Net-returns to milk production (Rs/L)

• Only Vegetable-based system obtained positive
  Net-returns to milk production

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Net-returns to cattle farming (Rs/month)Including
family labour cost
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Net-returns to cattle farming (Rs/month)Excluding
family labour cost
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Mean technical efficiency (TE) estimates
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Distribution oftechnical efficiency (TE)
estimates
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Level of satisfaction

• Farmers,
• in either, the systems are not satisfied at all
  with Government Veterinary AI services as well
  as loan other supporting services
• in Vegetable-based system satisfied with private
  AI service
• in both systems satisfied with the services
  provided by formal milk collecting networks
  (MILCO Nestle companies)

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Major constraints to cattle farming

• 1st High concentrate price Fodder
  unavailability land shortage for grazing
• 2nd Low milk price High concentrate price
• 3rd Fodder unavailability Low milk price
• land shortage for fodder
• growing
• 4th Poor Veterinary service Poor Veterinary
  service
• 5th High cost for cattle housing Poor AI service

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Conclusions

• Vegetable-based, integrated cattle farming system
  is more profitable compared to Milk-based cattle
  farming system
• Cattle farmers in VBCFS are technically more
  efficient than those in MBCFS
• Cattle farming in Vegetable-based system is more
  economically viable compared to that of
  Milk-based system
• Introduction of alternative concentrate feeding
  strategies, proper housing, efficient manure
  management practices may ensure cattle farming is
  an economically viable enterprise in Milk-based
  system
• Protection of grazing grounds introduction of
  private AI service may further improve cattle
  farming in Vegetable-based system

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Conclusions

• Adequate implementation of pricing policy based
  on milk quality, growing of improved forages in
  abandoned tea lands, strengthening of veterinary,
  AI extension services establishing of
  systematic cattle market may be helpful in
  developing cattle farming in both Milk-based
  Vegetable-based farming systems in Up-country
  Wet-zone of Sri Lanka

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THANK YOU
Special word of appreciation goes to cattle
farmers officers of milk collecting
networks who provided invaluable information for
the study