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4.3 Rationale for Size Categories

4.3.1 Smallholder farms

Smallholder activities are defined as those that use mainly household resources (labor and land). The size of holdings are relatively small such that hired labor is not normally required or expected. Hogs: Less than 100 heads in inventory

While the Bureau of Agricultural Statistics (BAS) defines 'backyard' scale operations as those having less than 20 heads of hog in adult-equivalents, previous study has shown that household hog inventories can reach as high as 100 heads of slaughter hogs (UPLB-IFPRI-ILRI SLP Study, 2000-2002). Broilers: 10,000 birds or less of inventory

Broiler production has become largely commercial, with contract production now the dominant production arrangement. Minimum contract sizes are said to be around 10,000 birds. Broiler production operations with inventories less than the minimum commercial contract size were therefore deemed to be smallholder operations.

4.3.2 Commercial Farms Hogs: 100 heads or more of inventory

The 100-head size demarcation follows from the upper limit set on smallholder hog farms. The commercial sample, however, is still disaggregated into two categories: medium-sized commercial and large-scale commercial. Medium-sized commercial farms are those with 100-1,000 heads of hog inventory. Large-scale commercial farms are those with more than 1,000 heads of hog inventory.

The distinction between the two is made because on sufficiency large farms economies of scale allow engagement in vertically integrated operations, covering breeding, feed milling, slaughtering, processing, and supplying to institutional markets. A structural difference may exist between medium-sized and large-scale commercial operations. Broiler farms: More than 10,000 birds in inventory

The 10,000-bird size demarcation also follows from the upper limit set for smallholder farms. Within this category are the large commercial operations, with their 10,000+ birds. This division is again made to account for the possibility of large-scale producers benefiting from economies of scale in feed mixing, breeding, and processing of output.

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