Title: Farm-Level Economics, Services & Constraints of Cattle
1 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
2Significant 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
3(No Transcript)
4Forage sources
Milk-based system
Vegetable-based system
5- Manure is wasted
- in Milk-based system
6- 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
7METHODOLOGY
8Study area Nuwara-Eliya district, UCWZ
- Favorable climate for cattle
- Temperature 220C
- Mean rainfall 1400 mm
9- 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)
10- 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
11Analysis 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
12Analysis 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
13Analysis 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.
14FINDINGS DISCUSSION
15Characters 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
16- 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
17Farmer Managed Societies (FMS)
- Farmers organized to collect, test managed the
society
18(No Transcript)
19Related other markets
- Cattle market - Utterly unorganized
- Manure market - Well organized
- AI market - Private AI technicians
- Labour market - Well established
- in vegetable-based system
20- Government intervention
- Veterinary service - Free service
- Drugs for cost - AI service (LDI Private AI) - Subsidized rate
(Rs. 20/) - Institution strengthening - Establish FMS
through MILCO
21Monthly recurrent expenditure (Rs/CU)
- Cost of cattle farming (per CU) greater in
Milk-based system
22Monthly 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
23Monthly revenue (Rs/CU)
- Vegetable-based system generates greater revenue
from manure by efficient manure management
24Monthly revenue (Rs/herd)
- Vegetable-based system generates greater total
revenue by better herd manure management
practices
25Net-returns to milk production (Rs/L)
- Only Vegetable-based system obtained positive
Net-returns to milk production
26Net-returns to cattle farming (Rs/month)Including
family labour cost
27Net-returns to cattle farming (Rs/month)Excluding
family labour cost
28Mean technical efficiency (TE) estimates
29Distribution oftechnical efficiency (TE)
estimates
30Level 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)
31Major 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
32Conclusions
- 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
33Conclusions
- 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
34THANK YOU
Special word of appreciation goes to cattle
farmers officers of milk collecting
networks who provided invaluable information for
the study