Economic Analysis of Bedouin Sheep Farming in Jordan and the Palestinian Territories

Raid Al Baqain and A Valle Zárate

Institute of Animal Production in the Tropics and Subtropics, University of Hohenheim,
Garbenstr. 17, 70593 Stuttgart, Germany.
ralbaqain@yahoo.com   or   r.albaqain@uni-hohenheim.de

Abstract

Bedouin communities across the Middle East depend on livestock as their main source of livelihood. Those living in marginal areas are confronted by harsh environmental conditions causing poor rangeland and short grazing periods. Additionally, the cost of inputs has escalated enormously (FAO 2008), causing extra pressure on the livestock system, economic performance and living standard of Bedouin households. This study examines the economic performance of sheep farming in Jordan and the Palestinian Territories (PT). Farm and market surveys were conducted for the season 2007/2008. Eighty-three sheep keepers from Jordan (n=44) and the PT (n=39) were interviewed. Gross Margin and Net Benefit analysis per flock were conducted to measure the economic success. Subsistence poverty line per household was calculated and compared to the Net Benefit. Accordingly, three groups of farmers were identified: farmers with negative Net Benefit (Group 1); farmers with positive Net Benefit beneath the subsistence poverty line (Group 2); and farmers with positive Net Benefit above the subsistence poverty line (Group 3).

Net Benefit values were not significantly different between Jordan and the PT, however, significant differences were found among different groups within each region. Pooled data from the two regions revealed that only 30.1% of the sample obtained economic results covering household expense requirements. The least squares mean Net Benefit values for Group 1 (n=39), Group 2 (n=19) and Group 3 (n=25) were -7,916, 2,652 and 7,096 JOD, respectively. Using the Kruskal-Wallis test, feeding cost per ewe (א²=6.86*), transportation cost per head (א²=6.16*), price of sold lamb (א²=6.63*) and sheep flock size (א²=13**) showed significant differences among the three groups.

Key words: Classification, economic success, net benefit, poverty

Introduction

The livestock sector contributes 40% of the world value of agricultural production and supports food for almost a billion people across the globe (FAO 2009). Securing the livelihood of millions of households depends on the economic success of the production systems, especially traditional households. However, livestock production generally is considered a slow moving yet risky business (Ramsay and Morgan 2009). In recent years, the cost of inputs has escalated enormously (FAO 2008), causing extra pressure on the livelihood of Bedouin communities in the Middle East, who depend largely on livestock as their main source of livelihood. Many Bedouin families still live a nomadic way of life even with ongoing settlement plans. The early nomadic system of seeking pastures and water were widely practiced and largely survived because scarcity of land resources was not a concern (Rowe 1999, Abu Zanat et al 2005). However, recent population growth, urbanization and drought conditions have resulted in scarcity of water and agricultural land (Mubarak 1998). Bedouins living in marginal areas are confronted by harsh environmental conditions, primarily desertification. Several studies have reported that during the last few decades, rangeland in the marginal areas of Middle East countries has faced a dramatic decrease in its carrying capacity (Al Baqain 1997, Nasr et al 2002, Jaradat 2003, Abu Zanat and Tabbaa 2004, Rueff et al 2004, Mohammad 2005, Valle et al 2009) with fewer grazing areas being available. Consequently, the degree and nature of the interaction between livestock production and its environment has changed and so, too, the form of the production systems (Bouwman et al 2005). Rowe (1999), in describing the pastoral society of Jordan, stated that the Badia landscape has lost its value as a source of feed and has become a space just to keep animals.

This study focuses on sheep keeping in Jordan and the Palestinian Territories (PT). Fat-tailed Awassi sheep is the predominant breed among the Bedouin flocks across the Middle East (Epstein 1982, Rummel et al 2005, Zygoyiannis 2006, Degen 2007, Gootwine et al 2008, Iñiguez and Hilali 2009). Sheep are preferred by Bedouins since they can live and grow produce or keep livestock on land unfavorable for other forms of agriculture (Morris 2009). Beside the economic motive, Bedouins also keep sheep for social and cultural reasons (Stavi et al 2006). Bedouin tribes domesticated sheep breeds for meat, milk, wool and manure. Meat, milk and milk products have traditionally been used for family consumption and trading; wool has been processed by the women for household use; and the manure used as an energy source. Recent available statistics indicate that the population of sheep in Jordan is 2,433,364 (MOA 2011) and 736,183 in the PT (PCBS 2007). The 2007/2008 production season was a critical season for livestock owners in Jordan and the PT because of the massive rise of input prices and drought. The latter caused poor vegetation in natural pastures and poor rain-fed cropping land. The short grazing periods forced sheep keepers in Jordan and the PT to increasingly supply the animals with high cost feed most of the year. This study examines the economic performance of predominant Bedouin sheep farming systems in Jordan and the PT. Simultaneously, the study investigates the socio-economic situation of farmers by household and flock level.

Materials and Methods

Study area and the sample

Two farm surveys were conducted in 2008 and 2009 for the 2007/2008 production season in Jordan and the PT. The areas chosen cover a range of sheep production conditions including extensive, semi-extensive to semi-intensive and peri-urban systems: for Jordan, Mafraq Governorate, north of Jordan, including the North-East Badia area; and for the PT, the middle and southern parts of the West Bank, namely, Ramallah, Jerusalem, Bethlehem and Hebron districts.

Small ruminants have traditionally been the main source of income and food for Bedouins in the rural areas of these two regions, with poverty rates being considerably high. In Jordan, poverty rates are generally higher in rural areas, the highest being in Mafraq (World Bank 2009). The statistics show that the poverty rate in rural areas of the PT, where the majority of the Bedouins dwell, was 26.6% in 2009, decreasing to around 22% in 2010 (PCBS 2011).

The study targeted Bedouin sheep keepers as the research population (non-Bedouin sheep keepers were excluded). A non-random sampling technique was used for the following reasons: the size of the widely dispersed population was unknown, access to some Bedouin communities was unattainable regarding availability of logistic resources and time; some Bedouins chose not to participate; and flocks of less than 50 heads were omitted based on the assumption that a lower flock size could not be regarded as commercial activity. Accordingly, purposive and snowball sampling techniques were applied. In total, eighty-three sheep keepers from Jordan (n=44) and the PT (n=39) were interviewed using a semi-structured questionnaire on household and herd data. In addition, a market survey and informal meetings with individuals and groups were carried out.

Data analysis

The analysis focused on comparing selected socio-economic characteristics between the sheep keepers in Jordon and the PT. The Kolmogorov-Smirnov (K-S) test was applied to test goodness of fit for normal distribution of the selected variables. The t-test was used to compare the means under normal distribution assumption otherwise non-parametric analysis was applied (Bayaga and Lekena 2010). The Wilcoxon-Mann-Whitney and Kruskal-Wallis non-parametric tests were applied to test the differences for significance at the 5% level. The general linear models (GLM) procedure for analysis of variance was applied for factorial analysis of sheep systems.

Economic success of sheep farming

To measure the economic success of sheep farming, Gross Margin (GM) per ewe and Net Benefit (NB) per ewe and flock were calculated according to the following equations:

GM = Σ TR – Σ TVC    (1)

NB = Σ (TR + Nm + F + S) – Σ (TVC + I)   (2)

where:

TR is the total cash revenue

TVC is the total variable cost

Nm is the value of the non-marketable part of production

F is the finance

S is the Insurance

I is the value of the interest rate on the fixed capital

On the revenue side, the sale of lambs, milk and milk products, wool, manure and old sheep (ewes and rams) were included. Variable costs were calculated by summing the cost of feed, hired labor, veterinary services, water, transportation, breeding cost and other related costs. Two values of gross margin were calculated: GM1 that includes only the marketable part of production on the revenue side; and GM2 that includes the value of the non-marketable part added to the cash revenue. The non-marketable part reflects the quantities from meat, milk, wool and manure consumed or used by the families plus the part of production used to meet the social, cultural and religious obligations. The study used the farm gate price as the price for home consumption and gifts.

For the calculation of the NB values, the study followed the procedure proposed by Ayalew et al 2003 in estimating the most important non-monetary benefits (socio-economic and cultural benefits) and costs. The value of the non-marketable production and socio-economic benefits were added to the total cash revenue to express the gains side. Security and capital formation were added to the Net Benefits side. For Bedouins, livestock is regarded as a security asset even though risk factors exist. Sheep keepers consider small ruminants as the most suitable animals for capital formation. For Bedouins, owning animals is an asset and a sign of wealth. Hence, the inclusion of financing and insurance factors in the benefits. Benefit of finance was calculated as follows: (number of sheep x respective farm gate prices) x interest rate for finance (6.5%). Benefit of insurance was derived as follows: stock value (annualized average weight of all sheep x respective farm gate prices) x insurance factor (6.5%). Seasonal, short-term and middle-term interest rates were used (loans that do not exceed 10,000 JOD given by ACC 2007). Fixed cost in the form of interest rate on the value of capital investments in the farm (equipments, machinery, vehicles etc.) was added to the variable costs. Two values of Net Benefit were calculated: NB1 that includes only the marketable part of production on the revenue side; and NB2 that includes NB1 plus the value of the non-marketable part.

Classification of sheep keepers

NB2 values were used to form two further groups of farmers in each area: the first group with negative NB2 and the second with positive NB2. Sheep keepers with negative NB2 were considered as one class, while the group with positive NB2 was split into 2 sub-groups. The base used for classifying the latter group was the estimated subsistence poverty line for each region. The subsistence poverty line is defined as the cost of satisfying the minimum caloric intake from food items (used by FAO and WHO) plus allowances to cover non-food items such as clothes and shelter. The estimated poverty lines per person per year were 492 JOD and 565 JOD for the PT and Jordan, respectively (World Bank et al 2004, DOS 2007, Louzi 2007). In their estimation of the poverty line for the West Bank, the World Bank used the specific food basket for Jordan due to the similarity of consumption habits associated with the social and cultural norms of the two populations.

The study adapted the approach applied by the World Bank in estimating the poverty line in the West Bank derived from Citro and Michael 1995, who recommend an equivalence scale as the measure of the relative cost of living of families of different size (household economy of scale) and composition (adult vs. children). The subsistence poverty line per household per year was adjusted using the following functional equation (World Bank 2004):

E = (A + 0.46 * C) ^ 0.89

where E is the expenditure level corresponding to the poverty line for household type, A is the number of adults and C is the number of children. Utilizing the above cited equation, the estimated poverty line per household per year was calculated taking into consideration the family size and composition compared to NB2 per flock per household.

Results and Discussion

Socio-economic characteristics of Bedouin sheep keepers

Table 1 shows selected characteristics for the comparison between Bedouin sheep keepers in Jordan and the PT. The Kolmogorov-Smirnov values revealed that all the selected variables except for age of head of family were not normally distributed. Wilcoxon-Mann-Whitney analysis (z value) was used to test the significant differences of the attributed mean values of the variables between the two groups, while the t-test procedure was applied to the age of head of family.

Family and family labor

The average family size in the PT (12 persons) exceeds the number in Jordan (10 persons), reflecting the higher family labor capacity in human labor equivalent in the PT (9 man equivalents compared with 7 man equivalents for Jordon). This can be explained by the lifestyle in Bedouin communities in the PT, where more than 50% are extended families. Family labor is an indispensable resource in sheep farming in the PT. In the PT, all farming activities were accomplished by family labor, while in Jordan high dependency on hired labor was observed. About 73% of the sheep keepers in Jordan employed permanent and seasonal labor, mainly Syrian shepherds. In the PT, children from both genders leave school at early ages and engage in sheep keeping, milking and other sheep management activities. Such a decision is not only made by the head of the family but also by the children themselves. Quite a few children stated that working with animals is more useful than school. They justify their decision by the fact that it is difficult for them to continue their education. Parents on the other hand blamed the poor educational services provided to them. 

 Flock structure

Total flock size and numbers of different animals in the flocks were significantly different between Jordan and the PT. Most Bedouin flocks included sheep and goats, sheep being the predominant species. Sheep comprised more than 97% and 71% of the total flock size for Jordan and the PT, respectively. Eighty percent of sheep keepers in the PT kept goats in their flocks in comparison to 66% in Jordan. The reasons given for keeping of goats by sheep keepers in the PT were because of better adaptation of goats to the harsh environment and land topography, less need of attention for feeding and longer lactation periods sustaining supply to family nutrition. In Jordan, sheep keepers keep goats primarily for household requirements while sheep products are sold on the market. Individual and group discussions revealed that some sheep keepers in the PT have started to introduce new breeds into their flocks as a step toward intensification of production. The proximity of Bedouin families who live in the southern part of Hebron to the Negev area and others to the Jerusalem sheep market in Israel has facilitated the process of procuring new breeds.

 Land resource

Only 9 of 39 Bedouin sheep keepers in the PT owned land with title deeds. The holdings were, however, very small (7 du) in comparison to ownership of land property in Jordan (141 du). This was largely due to the political situation in the region where many Bedouin tribes are still considered refugees. The majority of the Bedouins originally came from the Negev desert to the West Bank areas after 1948 with just a few families buying land. To overcome the shortage of land resources, Bedouin families started to lease land from the non-Bedouin communities who live near villages. Only in Bethlehem and Hebron have many Bedouin families settled, living in modest concrete houses. Seventy-five percent of the sheep keepers in Jordan own land but with large disparity. This is due to the inequality of land distribution through what is called tribal frontal land (Wajihat Asha’iriyah) among the Bedouin tribes. Results showed significant differences between the regions with respect to owned land and rented land while land used for grazing purposes showed no significant difference. 

Off-farm income and debt

Off-farm income is of increasing importance to improve family income and is essential during off-season production to secure households the necessary liquidity to cover living expenses (Wurzinger et al 2008). Although fewer households performed off-farm activities in the PT (36% compared to 64% in Jordan), the value of the PT off-farm income (9,242 JOD) was significantly higher than that of families in Jordan (6,227 JOD). Just a few cases were observed in the PT of family members having a permanent or full-time job. In Jordan, on the other hand, many of the interviewed sheep keepers were pensioners (mainly from the army) with very modest regular income. In Jordan, Bedouins live in remote areas and have low employment opportunities.  Therefore, young men with insufficient education find the military the most attractive type of work, influenced by social and political considerations. To address continuing liquidity problems, selling of real estate was practiced by Bedouin households more in Jordan than in the PT. In the PT, the level of wages for full-time work is much higher than that in Jordan. Seasonal employment was practised more among the Bedouin family members in the PT where the Negev area in Israel and the Israeli settlements are the main locations for off-farm work.

Ninety-five percent of the interviewed sheep keepers in the PT were in debt (mainly to feed traders) in comparison to only 38.6% in the case of Jordan. No significant difference was found in the value of debt due to the type of debt between the two regions. Being in debt was identified as a major problem facing sheep keepers in the PT (Al Baqain and Valle Zárate 2010). During informal discussions with the sheep keepers in the PT, it was clearly stated that lack of cash liquidity along with the rise in feed prices boosted their dependency on feed traders, who soon after forced them to sell their lambs at early age at low prices for repayment. Informal credit is more widely practiced in the PT than in Jordan due to the absence of formal credit institutions that target Bedouin communities. In Jordan, formal credit institutions play a much stronger role in supporting farmers as long as collateral assets are available.

Economics of sheep farming

An overview of the economic performance of Bedouin sheep farming between Jordan and the PT is presented in Table 2. There is a high variation for all parameters between the two regions. The normal distribution test (K-S test) showed that the parameters GM1 and GM2 per ewe, NB1 per sheep and NB2 per sheep and flock were normally distributed, while NB1 per flock did not show any normal distribution pattern.

GM1 and GM2 values were generally low in Jordon, being mostly positive and significant at the 5% level. The main reason was the low revenues generated in the 2007/2008 season in Jordan due to the fact that breeding ewes and new lambs were sold at lower prices than in the PT, largely because of the increased cost of feeding resulting from increased global feed prices. Parallel to that, the Jordanian government stopped subsidizing feed prices during the production period, causing acceleration of the production cost. Sheep keepers thus had to purchase feed from free markets at higher prices. In response, many sheep keepers started selling more animals (including mature breeding ewes) to feed the rest of the flock, causing a further sharp drop in market prices for animals. This resulted in a negative change in sheep flock size (2007–2008) with -23.7% and -15.8% for Jordan and the PT, respectively, and, correspondingly, the Net Benefit values.

NB1 values per sheep and flock show that Bedouin sheep keepers in Jordan and in the PT achieved negative values. NB2 values, which include non-marketed production values, generated positive values only for sheep farmers in the PT, with 9 JOD and 863 JOD per ewe and per flock, respectively. Only the NB1 and NB2 values per ewe (NB1_h and NB2_h) significantly differed between Jordan and the PT (p<0.0001).

Classification of sheep farming systems

The farms were classified by Net Benefit (NB2) into 3 groups (Table 3):

• Group 1: Farmers obtaining negative Net Benefit per flock;

• Group 2: Farmers obtaining positive Net Benefit per flock under the subsistence poverty line for the household and

• Group 3: Farmers obtaining positive Net Benefit per flock above the subsistence poverty line for the household.

On a regional level, the Net Benefit values for similar groups were not significantly different, however, significant differences were found among different groups within each region. About 30% of the sheep keepers obtained economic results covering household requirements, while 70% were under the poverty line.

To characterize the groups of sheep keepers, several parameters were selected for comparison (Table 4). Since the Kruskal-Wallis test evaluates the ordinal information of data, Table 4 depicts the medians and lower and higher percentiles of parameters instead of arithmetic means and standard deviations. Farmers achieving negative NB2 owned larger flock size, the lowest birth rate, and high lamb and ewe mortality. Sheep keepers in Group 3 owned fewer animals with the highest lambing rate and lowest ewe mortality rate. Though lamb mortality is highest in Group 3, this was compensated for by selling the rest of the lambs at high prices. Due to remoteness from main cities, transporting of large flocks between grazing areas during the season and transportation cost per head were the highest in Group 1. Transportation cost in Group 2 was lowest since there was grazing on smaller areas mainly around villages. Sheep keepers in Groups 1 and 3 spent more on feeding but the latter managed to sell lambs at high prices while Group 1 received low prices for lambs due to early selling. Early selling occurred because of difficulty in continuing feeding of large flocks at high feed prices and the need to repay debts. Even though the prices of sold animals for Group 2 were the lowest they had a better economic state than Group 1 due to lower feeding costs. The results show that in difficult years with unfavorable market conditions, sheep keepers with smaller flock size achieved positive economic results compared with those with large flock size.

Conclusion

• The results demonstrate the immense impact of market forces (feed and meat prices) on the success of the livestock systems, thus influencing its sustainability. The fact that only one third of the investigated households covered their household requirements through sheep farming is a concern. The marked increase in feed prices during the 2007/2008 season resulted in an increase in cost of production forcing sheep keepers to sell lambs at an early age and to resort to destocking, such that some mature female ewes were sold at low prices. Debt was identified as a major problem facing sheep keepers in the PT. Feed traders forced the sheep keepers to sell their lambs at an early weaning age and low prices, or exchange new lambs as credit repayment. The animals were sold per head disregarding the precise weight of the animals, causing severe losses for the sheep keepers. Sheep farmers who were able to sell lambs some months later obtained higher prices and consequently achieved higher revenues, enabling them to cover production costs. 

Acknowledgment

We would like to thank all the interviewed Bedouin sheep keepers for their cooperation and participation and to Mr. Riyad Baqaeen in Jordan and Miss Reem Mustafa in the Palestinian Territories for their support in data collection. We highly appreciate the financial support from DFG (German Research Foundation).

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Received 28 August 2011; Accepted 7 November 2011; Published 1 December 2011

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