Livestock Economics, Marketing and Business Management

PLANNING FOR THE LIVESTOCK SECTOR

• This exercise provides an opportunity to make use of the formulas uniting FV,PV, i and n in the context of planning livestock production.

Problem - Hypothetical example

• You live in a state called Tamil Nadu and are employed by the Livestock Project Analysis and Planning Section (LPAPS) of the Ministry of Agriculture as a Livestock Planning Officer (LPO).
• LPO office is based in the capital, Chennai, where together with the other livestock planning officers you are faced with the following problem. The year is 2008.
• The Minister of Animal Husbandry has just given a speech, making promises as to the future contribution of the country’s traditional livestock sector to the country’s consumption of meat and milk products.
• The next 5 year plan is due to start in 2010, and he has stated that by the year, 2015, the country’s traditional cattle producers will make it possible to
  • reduce country’s beef imports to one quarter of their present level
  • reduce the country’s imports of milk and milk products to half their present level (in terms of raw milk equivalent).
  • Increase average per capita consumption of beef by 50%.
  • Needless to say, you were not consulted before the Minister made his speech, and as good civil servants you are now in the position of
  • trying to work out whether it is possible to fulfil his promises
  • trying to work out reasonable targets for livestock production and a reasonable strategy for achieving these.
• As usual, if it all goes wrong, you will be blamed, so it is important that you make clear recommendations to the Minister, indicating what he can safely promise, in your opinion, and what type of measures will be needed to ensure that these promises become reality.
• Also, as usual the information is needed yesterday (if not last week) so you have to make use of the information available at the moment in your office .

Information about Cattle Production

• The majority of Tamil Nadu's cattle (over 99%) are kept by traditional producers, under an extensive management system.
• A few experimental dairy herds can be found on the outskirts of Chennai, and there is also a small fattening unit, but this is also virtually at an experimental phase. For the time being, production goals and plans have to be based on the traditional cattle producers.
• The cattle population in according to the 2005 census was 1.773 million. The 2008 vaccination returns indicate a current population of about 2.1 million.
• A detailed survey of herds has come up with the following data.
  • Offtake rate
    • The offtake rate for the whole herd is 10 %, 40 % are old cows, having an average carcass weight of 100kg each and 60% are adult males, having an average carcass weight of 175 kg each.
  • Milk production
    • About 23% of the national herd consists of cows in milk, the average annual milk yield is 275 litres per cow in milk.

Information about Meat and Milk Imports

• The figures for 2008 are not available yet, but 2007 meat imports were of 1,700 tonnes of beef, 131,200 tonnes of milk equivalent (imported milk and milk products in terms of their equivalent in raw cow’s milk)
  • (1 metric tonne = 1000kg)
• Imports of animal products have been increasing at about 5 % per year in recent years.

Information about the Human Population

• The human population of Tamil Nadu was 6,346,281 according to the 2001 census. The annual growth rate for the next decade was estimated at 3.1%.

Suggested Steps for Solving the Problem and Coming up with Suitable Recommendations

• Calculate the annual growth rate (%) expected from the traditional herd using the estimated results form the 2005 and 2008 cattle population figures
• Treat 2008 as your ‘year 0’ and work out what local beef and milk production was, what was imported and what consumption per head of the human population was.
• Now look at your Minister’s promises and work out what these require, in terms of growth rates of local production.
• Compare them to the quantities that would be produced and required if current levels of productivity and growth continue unchanged.
• Then, if you think the Minister’s promises can be fulfilled, indicate how (in terms of productivity improvements, changes in offtake rates, carcass weights etc.). If not, indicate what you think might be reasonable goals.
• Very briefly, what types of projects do you think would be needed to achieve these goals?