The economics of goats managed under different feeding systems

G Legesse^1,2, G Abebe², and K Ergano³

¹University of Hohenheim, Institute of Animal Production in the Tropics and Subtropics, 70593 Stuttgart, Germany
getahun@uni-hohenheim.de
²Debub University, Awassa College of Agriculture, Department of Animal and Range Sciences, P.O.Box - 05, Awassa, Ethiopia
aco.reo@telecom.net.et
³Debub University, Awassa College of Agriculture, Department of Agricultural Resource Economics and Management, 
P.O.Box - 05, Awassa, Ethiopia
kebebeerg@yahoo.com

Abstract

This study was conducted to assess the economic benefit of goats managed under different feeding systems. 48 Ethiopian local goats (27 Arsi-Bale and 21 Somali) about 9 months of age were managed under 3 feeding systems (viz. intensive, semi-intensive and extensive) for a period of three months at the Goat Research Unit of Awassa College of Agriculture, Ethiopia. All animals were intact males. Animals of the intensive group were confined in individual pens and offered hay and concentrate mixture. The extensive group was allowed to graze for 8 hours daily and housed in the evenings. The semi-intensive group had access to grazing and supplemented with concentrate mixture at midday in individual pens. Partial budget analysis was performed to evaluate the economic advantage of different feeding systems. At the end of the experiment, five goats were randomly selected from each feeding system for the two genotypes. Market prices of these animals were estimated by three experienced judges in goat marketing. The average price difference of the goats in each feeding system before and after fattening was considered as gross income in the analysis.

Somali goats managed under semi-intensive system returned a higher profit margin than the goats managed extensively and intensively. The net returns from supplementing grazing with concentrates was Ethiopian Birr 10.6 per animal with marginal rate of return of 93.9% compared to the goats managed extensively. In contrast, the net returns from goats managed extensively and intensively were negative. Combining grazing with concentrate supplementation seems potentially more profitable than either grazing without concentrate supplementation or pen-feeding with no grazing for Somali goats. This was attributed to the higher growth rates and final body weights of semi-intensively managed goats than those under grazing or stall-feeding. The marginal rate of returns for Arsi-Bale goats was negative in all the three systems. The loss of money encountered in goats managed extensively was relatively lower than the goats under other treatments. The additional income from supplementation of concentrates does not justify the additional cost accompanied with it for these goats. Grazing seems the only viable option for Arsi-Bale goats during the dry-season.

Key words: Ethiopia, feeding systems, goats, partial budget analysis

Introduction

Meat production of goats is influenced by many factors including sex, breed, age, and nutritional status. Genetic factors and levels of feeding are probably the most important factors influencing growth and thus meat production. In Ethiopia, it has been estimated that out of a total 379,000 metric tonnes of meat production from domestic ruminants, 17% of it is obtained from goats (FAO 1999). Goats are invariably marketed at younger age usually at about one  year (Aschalew et al 2000).

In order to define which type of animals to produce and in which type of management they should be produced, it is necessary to determine the effect of genotype and the feeding methods on weight development, feed costs and returns from the animals. To facilitate the adoption of new research findings by farmers, both technical and economic benefits should be proven before making recommendations. There are circumstances where research outputs could be technically feasible but not profitable and hence not adopted. The objective of this study was, therefore, to assess the economic benefit of goats managed under different feeding systems.

Materials and Methods

Forty-eight Ethiopian local goats (27 Arsi-Bale and 21 Somali) about 9 months of age were managed under 3 feeding systems (viz. intensive, semi-intensive and extensive) for a period of three months at the Goat Research Unit of Awassa College of Agriculture. All experimental animals were intact males. Animals of the intensive group were confined in individual pens and offered Rhodes-grass hay ad lib and 300-350g concentrate mixture per head per day. The concentrate mixture consisted of wheat bran (54%), Noug (Guizotia abyssinica) cake (19%), maize (26%), and salt (1%). The extensive group was allowed to graze for 8 hours daily and housed in the evenings. The semi-intensive group had access to grazing and were supplemented with 300-350g concentrate mixture at mid-day in individual pens.

Partial budget analysis was performed to evaluate the economic advantage of different feeding systems. Partial budgeting is a method of organizing experimental data and information about the cost and benefit from some change in the technologies used on the farm. It involves tabulating the costs and benefits of a small change in the farm practice (CIMMYT 1988; Shapiro et al 1994). The method entails calculating net return (NR) i.e. the amount of money left when total variable costs (TVC) are subtracted from the gross returns (GR):

NR = GR-TVC

Total variable costs include the costs of all inputs that change due to the change in production technology. The most important criterion in deciding whether or not to adopt a new technology is the change in net return (ΔNR). This amount is the difference between the change in gross return (ΔGR) and the change in total variable costs (ΔTVC)

ΔNR = ΔGR - ΔTVC

Assuming that capital is not a constraint, the technology with the highest ΔNR is chosen. However, new technologies normally require investment, therefore additional capital is necessary. When capital is limited, the extra (or marginal) cost should be compared with the extra (or marginal) net benefit. The marginal rate of return (MRR) measures the increase in net income (ΔNR) associated with each additional unit of expenditure (ΔTVC):

MRR = ΔNR/ΔTVC

The MRR measures the effect of additional investment in new technology on additional net returns (CIMMYT 1988).

In order to perform the partial budget analysis, the variable costs and benefits were worked out as follows. Since the goats were bought from their places of origin for research purpose, the purchase prices do not necessarily represent the actual prices of the animals at Awassa market. Therefore, prices of the goats were estimated using market price for goats of similar size at the Awassa market. The price of the goats ranged between 25 to 35 (Ethiopian Birr) for Somali and 20 to 30 (Ethiopian Birr) for Arsi-Bale. Then average prices, i. e. 30 Birr for Somali and 25 Birr for Arsi-Bale, were taken for the analysis. At the end of the experiment, five goats were randomly selected from each feeding system for the two genotypes. Market prices of these animals were estimated by three experienced judges in goat marketing. Price estimation was carried out on February 17, 2001 (i.e. 2 days before the beginning of the main fasting season (for Coptic Christians), locally known as Hudadie), when fattened animals are supposed to fetch a higher price. The average price difference of the goats in each feeding system before and after fattening was considered as gross income in the analysis.

To account for the opportunity cost of pasture for grazing animals, the cost of grazing during the dry season was estimated at Ethiopian Birr (EB) 70.00 per hectare by farmers familiar with price of feed (hay, pasture etc.) in the area. As 6 hectares of grazing land is supposed to support 300 goats, one hectare of land could carry 50 goats. Therefore, the cost of pasture for goats, managed extensively and semi-intensively was calculated accordingly. Cost of labor was calculated based on the assumption that one laborer could manage 100, 75 and 50 goats under extensive, semi-intensive and intensive systems of feeding management, respectively. The cost of other feed items was computed by multiplying the actual dry matter intake of the feeds with their existing market prices for the whole feeding period.

Results and Discussion

According to partial budget analysis, Somali goats managed under semi-intensive system returned a higher profit margin than the goats managed under extensive and intensive systems (Table 1). For example, the net returns from supplementing grazing with concentrates was Ethiopian Birr (EB) 10.6 per animal with marginal rate of return of 93.9% compared with the goats managed extensively (control). On the contrary the net returns from goats managed under extensive and intensive systems were negative (EB -4.63 and -6.3, respectively).

The present result suggests that, combining grazing with concentrate supplementation is potentially more profitable than either grazing without concentrate supplementation or pen-feeding with no grazing for Somali goats. It is highly probable that the response of Somalis managed under the semi-intensive system would even be better during the wet season when herbage cover is better. Bhatt et al (1991) reported a similar economic trend for Black Bengal x Beetal half bred kids managed under three feeding systems. The above result was attributed to the higher growth rates and final body weights of semi-intensively managed goats than those under grazing or stall-feeding. It seems that animals under semi-intensive system had effectively utilized both the provision of the supplement and the opportunity to select.

On the other hand, the marginal rate of return for Arsi-Bale goats was negative in all the three systems (Table 1). The loss of money encountered in goats managed under the extensive system was relatively lower than the goats under other treatments. The additional income from supplementation of concentrates does not justify the additional cost accompanied with it for these goats. Grazing seems the only viable option for Arsi-Bale goats during the dry season. Repeating this experiment during the wet season to generate data for the whole year would give more conclusive result since the availability and quality of feeds, cost of variable inputs and prices of the animals vary from season to season.

References

Aschalew T, Sisay L, Ameha S, Abebe M and Zinash S 2000 National goat research Strategy in Ethiopia. In: The opportunities and challenges of enhancing goat production in East Africa - A conference held at Debub University, Awassa, Ethiopia, from November 10 to 12, 2000. pp. 1-5.

Bhatt A S, Singh R A, Verma S K and Gupta B S 1991 Carcass traits and economics of meat production in kids under different management systems. Indian Journal of Animal Science. 61(10): 1149-1151.

CIMMYT (International Maize and Wheat Improvement Center) 1988 From Agronomic Data to Farmer Recommendations: An economics training manual. CIMMYT, DF, Mexico.

FAO 1999 Production Year Book 1998, Volume 52, FAO, Rome.

Shapiro B I, Mohamed-Saleem M A and Reynolds L 1994 Socio-economic constraints to strategic sheep fattening: evidence from the Ethiopian highlands. In: Small ruminant research and development in Africa, Proceedings of the second biennial conference of the African Small Ruminant Research Network. AICC, Tanzania 7-11, December 1992. pp. 9-14.