Socio-economic constraints to strategic sheep fattening: evidence from the Ethiopian highlands

B.I. Shapiro, M.A. Mohamed-Saleem and L. Reynolds

International Livestock Centre for Africa
P. O. Box 5689, Add is Ababa, Ethiopia

Abstract
Introduction
Methodology
Results
Conclusions and implications
References

Abstract

This study provides the economic analysis of on-farm strategic feed trials carried out by ILCA (International Livestock Centre for Africa) since 1985. There is the potential to increase farmers' incomes by strategic feeding to meet the increased demand created by holidays and other occasions. However, the results of the economic analysis show that current feed packages are not economically viable and do not result in profitable strategic feeding.

This study also indicates that a number of socio-economic factors need to be considered in the design of station trials. The potential benefits of including economic considerations at the beginning of on-station research are highlighted.

Obstacles socio-économiques à l'engraissement stratégique des moutons dans les hauts plateaux éthiopiens

Résumé

Cette étude présente l'analyse économique des essais d'alimentation raisonnée effectués en milieu paysan par le CIPEA (Centre international pour l'élevage en Afrique) depuis 1985. En permettant au paysan de satisfaire la demande croissante en mouton à l'époque des fêtes et à d'autres occasions, l'alimentation raisonnée des ovins apparaît comme une possibilité d'augmenter les revenus. Cependant, il ressort des résultats de l'analyse que les stratégies alimentaires utilisées ne sont pas économiquement viables et ne débouchent pas sur une spéculation économiquement intéressante. L'étude montre également qu'un certain nombre de facteurs socio-économiques doivent être examinés dès le stade de la conception des essais en station. Les avantages qui pourraient découler de la prise en considération des facteurs économiques dès le début de la recherche en station sont présentés.

Introduction

Livestock productivity in both Ethiopia and sub-Saharan Africa is low. Recent increases in livestock production have mainly been due to expansion of herds, not improvements in productivity (Jahnke, 1982). According to Jahnke (1982), many areas have rapidly increasing populations, resulting in small farm sizes and less pastureland. Intensified feed and livestock production may be one way to raise production per land and livestock unit in a sustainable fashion. Livestock also earn farmers cash, which can then be used to increase the production of their food crops (Fitzhugh et al, 1992).

African farmers often fatten a few sheep to sell during feasts and holidays when prices are relatively high. Traditionally, sheep are raised on native pastures and crop residues. Animals which are to be sold during peak demand periods may have some supplemental feeding, but this traditionally includes only surplus grains and leftover household food. Forages, grains and concentrates could be used to increase animals' weight and therefore the price they will sell for.

This study presents an economic analysis of on-farm strategic sheep feeding trials carried out by ILCA in the highlands (cool tropics) of Ethiopia since 1985. The purpose of these trials was to identify feeding strategies that could sustainably raise animal productivity and farmer incomes, particularly where pasture land is becoming scarce due to crop growing. The objectives of the economic analysis presented here are:

1. to demonstrate the returns that could be obtained from strategic fattening using different feed types, with and without veterinary care;

2. to provide nutritionists and animal production specialists who are devising strategic sheep fattening methods with information on their potential for adoption, as well as constraints.

Other fundamental research questions about on-farm research into intensified livestock production practices and the role of economic analysis in livestock technology research are also addressed. Results of two indicative trials are presented in detail.

Methodology

Data source

Production data from eight on-farm trials done by ILCA were analysed with partial budgeting to assess the financial viability of strategic sheep fattening.

The partial budgeting methodology

Partial budgeting is often used to evaluate the potential profitability of new technologies and provides a criterion for choosing between alternatives. It involves tabulating the costs and benefits of a small change in farm practice. Only income and expenses which change are considered. The farmer's objective is assumed to be the maximisation of profits. His other objectives can be accounted for in sensitivity analysis and qualifying the results (Boehlije and Eidman, 1984).

Partial budgeting measures profits (or losses) which are the net benefits or difference between gains and losses for the proposed change. Gains include added returns and reduced costs, losses include added costs and reduced returns. The method entails calculating net income (NI), i.e. the amount of money left when total variable costs (TVC) are subtracted from total returns (TR)

(1) NI = TR-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 income (D NI). This amount is the difference between the change in total returns (TR) and the change in total variable costs (D TVC):

(2) D NI = D TR-D TVC

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

(3) MRR = D NI/D TVC

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

The study area

Ethiopia has 490,000 m² or about 50% of all the highland area of the cool tropics of Africa. In the central-eastern highlands of Ethiopia the indigenous sheep are Menz, which are medium-sized and fat-tailed (Epstein, 1971) and Arsi-Bale, which are thin-tailed. As in most of the Ethiopian highlands, smallholder farmers at ILCA's on-farm research sites in Debre Zeit and Inewari castrate rams and fatten them for sale as part of their normal production activities. At Debre Zeit a high proportion of farmers (80.4 %) fatten sheep for a period of 1-2 years (Lilt, 1990). Sheep intended for fattening are usually purchased at local markets or taken from the flock when 1-2 years old (Lilt, 1990).

The ILCA on-farm site at Hidi/Debre Zeit is located 40 kilometres south of Addis Ababa and 13 km east of Debre Zeit town. It is 1850 metres above sea level (masl). The temperature ranges from a mean minimum of 10°C to a mean maximum of 22°C. Annual average rainfall is 800 mm and is bimodal. The main rains occur between June and September (Gryseels and Anderson, 1983). Most crop production takes place during these rains. Average livestock holdings at Hidi/Debre Zeit are reported to be 6.2 sheep, 1.5 oxen, 1.9 cows, 1.7 donkeys, 0.1 mules and 1.1 horses (Asfaw et al, 1987). Debre Zeit is known for the quality of the teff that is grown there.

The ILCA on-farm site at Deneba/Inewari is located 50 kms west of Debre Berhan town, 180 kms north of Addis Ababa and is at an altitude of 2600 masl. The temperature ranges from a mean minimum of 6°C to a mean maximum of 18°C. Annual average rainfall is 880 mm and is bimodal, resulting in two crop seasons. The main rains occur between July and October and the short rains occur between February and April (de Leeuw et al, 1992). The most important crops are wheat, teff, faba bean and chickpea.

The supply of land is inelastic at both sites relative to labour, but more so at Deneba/Inewari. Average land holdings are approximately 2.5 hectares at Debre Zeit (Gryseels and Anderson, 1983), but only 1.8 ha approximately at Deneba/Ineware (McCann, 1992). Labour in both areas is normally provided by members of the farm household or neighbouring farmers.

A survey conducted in the Debre Zeit area found that 50% of the farmers considered feed shortage to be the major constraint to improved livestock production. Disease was seen as the major constraint by 46% of the farmers (Asfaw et al, 1987). Traditionally, sheep fattening is based on grazing, aftermath grazing, crop residues, and residues of local beer (tella). Some farmers also feed the animals faba beans and chickpea grain (Asfaw et al, 1987).

Trials and design

Trials at Hidi/Debre Zeit, East Shoa Region

Five fattening trials were carried out at Hidi/Debre Zeit. The first two trials took place in 1987 and 1989 for a duration of 24 and 34 weeks, respectively. The sheep were sold during the Ethiopian Christmas in January of each year.

The treatment groups in Trial 1 were as follows:

· Treatment 1: Grazing only (ad libitum for 8 hours; 8 g salt per head/day);

· Treatment 2: Pen-feeding (teff straw, 800 g; sesbania leaves, 375 g; salt, 8 g per head/day).

· Treatment groups for Trial 2 were as follows:

· Treatment 1: Grazing (plus 400 g teff straw per head/day due to poor pasture);

· Treatment 2: Grazing plus supplementation (200 g sesbania, 50 g noug cake and 50 g wheat bran per head/day);

· Treatment 3: Pen-feeding (700 g teff straw, 200 g sesbania leaves, 50 g noug cake and 50 g wheat bran per head/day).

As not enough sesbania was available for Trial 2, 50 g noug cake and 50 g wheat bran were substituted for 100 g sesbania in treatments 2 and 3. These treatments also included 8 g salt and 5 g bone meal per head/day. Each feed treatment group was further subdivided to test the effect of veterinary prophylaxis.

For Trial 3, 95 sheep with an average live weight of 23.6 kg were purchased in early January, 1990. 17 sheep (18%) died between January and March, 1990. The trial started with 78 sheep but 6 more (6%) died between May and June, 1990. The sheep had been vaccinated against anthrax, sheep pox and pasteurellosis. All had been drenched against internal parasites. The cause of death could not be determined, therefore the surviving sheep were used for the economic analysis. 72 sheep were sold after 135 days. The treatment groups involved were as follows:

· Treatment 1: Pen-fed (150 g teff straw, 600 g wheat bran, 400 g cotton seed per head/day);

· Treatment 2: Grazing plus supplementation (300 g cotton seed, 150 g teff straw and 300 g wheat bran per head/day);

· Treatment 3: Grazing plus supplementation (200 g (200 g cottonseed cake, 150 g teff straw and 200 g wheat bran per head/day).

Trials 4 and 5 involved two batches of sheep which were fattened for 10 weeks each in 1991. The sheep in Trial 4 were fattened during the long dry season (period 1). The sheep in Trial 5 were fattened during the wet season (period 2). 147 and 120 sheep between 20-22 kg live weight were bought from local markets for the two fattening periods respectively. After being vaccinated against pasteurellosis and sheep pox they were treated for internal and external parasites. The treatment groups in each trial were as follows:

· Treatment 1: Grazing only;

· Treatment 2: Grazing plus concentrates (300 g wheat bran, 300 g cottonseed cake per head/day);

· Treatment 3: Grazing plus supplementation with forages.

Forage supplementation varied by season. Animals in Trial 4 (dry season) received 500 g per head/day oats hay plus maize stover, cowpea hay and wheat straw. Animals in Trial 5 (wet season) received oats hay only at 500 g per head/day. Animals in all groups had unlimited access to urea and molasses block.

Trials at Deneba/Inewari, North Shoa Region

Three fattening trials were carried out in Denebe/Inewari. Trial 1 compared supplementary feeds normally grown on-farm; a high proportion of oats straw versus oats grain under zero-grazing, with and without parasite control. Zero-grazing was chosen due to the shortage of grazing land in the area. Participating farmers purchased 40. Sheep the trial started in August 1988 and lasted 36 weeks. The animals were sold during Easter 1989. Preventive health care included drenching for nematodes and trematodes, dipping against ectoparasites and vaccination against sheep pox and pasteurellosis. The treatment groups were as follows:

· Treatment 1: High proportion of oats hay (1000 g oats hay per head/day);

· Treatment 2: High proportion of oats grain (450 g oats grain and 100 g oats hay per head/day).

All sheep were fed 100 g horse beans and 50 g rough peas per day.

Trial 2 took place during 1989 and lasted only 10 weeks. Participating farmers purchased 40 sheep from the local market with a mean weight of 18.3 kg. The same experimental design as Trial 1 was followed. By the end of the experiment four sheep had died. The surviving 36 sheep were sold by the farmers at Easter.

In Trial 3, participating farmers purchased 120 sheep from surrounding markets in September 1989 and the sheep were sold during Easter 1990. Due to results from the previous two trials at Deneba/Inewari, a 30 week fattening period was chosen. Changes were also made to the feed composition and amount. A high proportion of oats grain and cottonseed cake were compared with additional feed in both diets for the last five weeks, with and without health care. Health care included drenching for nematodes and trematodes, dipping against ectoparasites and vaccination against sheep pox and pasteurellosis.

For the first 25 weeks the treatment groups were as follows:

· Treatment 1: High proportion of oats grain (400 g of oats grain, 300 g wheat straw, 250 g cottonseed cake per head/day);

· Treatment 2: High proportion of cottonseed cake: (400 g of cottonseed cake, 300 g wheat straw, 200 g oats grain per head/day).

For the last five weeks the treatments were modified as follows:

· Treatment 1: High proportion of oats grain (650 g oats grain, 300 g wheat straw, 350 g cottonseed cake per head/day);

· Treatment 2: High proportion of cottonseed cake (550 g cottonseed cake, 300 g wheat straw, 325 g oats grain per head/day);

The increased feed during the last five weeks was designed to supply an additional 73.2 and 82.4 g crude protein (CP) and 1.006 and 0.797 meal ME for sheep in Treatments 1 and 2, respectively.

Results

Hidi/Debre Zeit

Trials 1 and 2. Sheep on Treatments 1 and 2 in Trial 1 showed similar growth performances (Gautsch, 1992) and commanded the same average sales price. The sheep on the traditional grazing regime (Treatment 1) therefore returned a higher profit margin than the sheep that were pen-fed (Treatment 2), due to the lower feed costs for Treatment 1.

The supplementation of grazing sheep in Trial 2 (Treatment 2) resulted in higher daily growth rates than Treatments 1 (control) and 3 (pen-fed), by 16 and 7 g respectively. Table 1 shows that with or without veterinary intervention, combining grazing with concentrate supplementation is potentially more profitable than either grazing without concentrates or pen-feeding of concentrates without grazing. For example, without veterinary intervention, the marginal net benefit from supplementing grazing with concentrates was 23 Ethiopian Birr (EB) per animal with a marginal rate of return of 505% compared to not feeding concentrates. Veterinary intervention did not improve weight gains, therefore the additional costs without additional benefits reduced profitability. The sheep seemed to prefer sesbania to teff straw. However, to be an economically viable feed supplement, it would have to be grown by the farmers at little or no opportunity cost.

Trial 3. Average daily weight gains and body weights for survivors were influenced by diets and initial body weights (Gautsch, 1992). Pen-fed sheep on Treatment 1 suffered severe diarrhoea that led to weight loss. This was attributed to Gossypol toxicity related to the use of cotton seed and resulted in a negative return of EB-51.85 per sheep. Treatments 2 and 3 resulted in positive net returns of about EB 2.30 and 4.70 per sheep, respectively. The marginal rates of return for both 2 and 3 were negative. The additional profits from these treatments did not justify the additional cost. Diseased sheep may have been intentionally brought to the market and therefore bought by some participating farmers. Farmers need to be encouraged to purchase sheep within their own locality, which could help reduce losses due to disease.

Trials 4 and 5. Mean daily weight gains of 33 g and 70 g were observed during the dry and wet seasons, respectively. However, final body weights within seasons did not vary by feed treatments, perhaps due to the short fattening period (70 days). During the wet season, grazing plus concentrates resulted in a 13% rise in additional income per animal over grazing alone. The marginal rate of return was 28%. However, the marginal net benefit was only EB 1.80 per head. During the dry season, grazing was the only viable option. Of the two feeding alternatives to grazing, only grazing plus concentrates appears to have more potential than grazing plus forages. Forage feeding was not found to be economically viable in either period due to the income lost by growing forage instead of food crops.

Table 1. Partial budget analysis for on-farm sheep fattening experiment at Hidi/Debre Zeit in the wet season, Trial 2 (1991) (Ethiopian Birr/sheep).

		Treatment group*
		1		2		3
		NVT	VT	NVT	VT	NVT	VT
Revenue from sales(A)		73.50	97.34	154.11	131.26	120.48	114.48
Total variable costs (B)		44.26	71.65	101.50	90.50	90.00	87.00
Sheep purchase		28.50	29.10	29.40	28.65	29.65	28.85
Feed:
	-Teff straw	5.76	5.76	-	-	10.08	10.08
	-Sesbania	-	-	6.19	6.19	6.19	6.19
	-Noug cake	-	-	1.54	1.54	1.54	1.54
	-Wheat bran	-	-	0.76	0.76	0.76	0.76
	-Salt	-	-	0.76	0.76	0.76	0.76
	-Bonemeal	-	-	0.24	0.24	0.24	0.24
Labour:
	-Sheep purchase (per diem)	1.0	1.0	1.0	1.0	1.0	1.0
	-Herding	8.0	8.0	8.0	8.0	8.0	8.0
Veterinary (Ranide)		-	1.10	-	1.10	-	1.10
Transportation (sheep)		1.10	1.10	1.10	1.10	1.10	1.10
Net return (A-B)		29.24	25.69	52.61	40.76	30.48	27.48
Net return over control		-	-	23.37	15.07	1.24	1.79

* NVT = no veterinary intervention
VT = veterinary intervention

Concluding remarks-Hidi/Debre Zeit

The economic analysis indicates that grazing plus concentrates has more potential than grazing plus forages to achieve sufficient weight gains for profitable short-term strategic fattening. Forage feeding was not found to be viable due to the income lost by growing forage instead of food crops. Further testing of supplementation with sesbania is indicated, therefore it would need to be grown on-farm to be a viable feed. Prophylactic health care did not improve weight gains, but added to production costs, thus reducing profits.

In order to achieve an acceptable return, the following socio-economic factors may have to be taken into consideration when planning future trials:

· sufficient time for fattening should be allowed so animals can gain sufficient weight to make a profit;

· sheep need to be of sufficient size to achieve a profitable weight by the time of sale, and need to be purchased when prices are low and sold at times of peak demand when prices are high;

· health care measures for fattening animals over a short period may not be needed.

Deneba/Inewari

Trial 1. Sheep on Treatment 2 were significantly (P<0.05) heavier than sheep on Treatment 1 after 16,24 and 36 weeks of fattening (Gautsch, 1992). The average daily weight gain of 45 g for sheep on Treatment 2 was three times higher than for sheep on Treatment 1. Health care affected growth rates and feed conversion ratio (feed intake/body weight gain) and hence feed costs per kg live weight gain. All pen-feeding treatments resulted in losses. Local market prices were high for oats straw, oats grain, horse beans and rough peas. Thus the opportunity values of oat straw as feed for cattle and for horse beans, oats grain and rough peas as feed for humans are quite high.

There was a significant difference in price for different weight categories of animals. The average sales price/kg live weight for animals on Treatment 1 was EB 2.19, while that for sheep on Treatment 2 was EB 3.09. Sheep on Treatment 2 reached a weight range where consumers were willing to pay higher prices per kg.

Trial 2. Although the effect of diet on weight was marginally positive, health care had no effect. The fattening period was not long enough for sheep to reach the weight range that attracts higher prices per kg. The low weights of the sheep when purchased (18.3 kg mean body weight) were also a contributing factor. Net returns for all treatments were negative (Gautsch, 1992).

Trial 3. Gautsch (1992) indicated that at the end of the trial, animals on both dietary treatments attained a similar mean final body weight of 32.14 kg. Table 2 presents the partial budgeting results for this trial. The average sales price per sheep was the same for both diets. Net profits for Treatment 2 without veterinary intervention were EB 24.06 per head, about EB 9 per head higher than for Treatment 1. However, with veterinary intervention, the net profits per animal for Treatment 1 were about EB 5 per head higher than Treatment 2. Cottonseed cake was cheaper than grain, but the effect on weight gain was similar.

Concluding remarks-Deneba/Inewari

At Deneba/Inewari, zero-grazing was judged to be appropriate. The high price of oats straw and grain was the major reason for negative returns. Similarly to the trials at Hidi/Debre Zeit, the 10 weeks fattening period proved inadequate for sheep to reach a body weight which would have attracted the premium price. Consumers are willing to pay considerably higher prices per kg live weight for sheep with high body weight. If a pre-trial socio-economic survey had been done, these factors could have been taken into account.

Table 2. Partial budget analysis for on-farm sheep fattening experiment at Deneba/Inewari, Trial 3, 1989 (Ethiopian Birr/sheep).

		Treatment group*
		1		2
		NVT	VT	NVT	VT
Revenue from sales(A)		110.03	118.36	114.20	110.00
Total variable costs (B)		94.76	95.46	90.14	92.03
	-Sheep purchase	50.63	50.73	51.60	51.50
	-Labour	6.03	6.03	6.03	6.03
	-Feed	33.13	33.66	27.71	29.58
	-Barn depreciation	1.72	1.72	1.72	1.72
	-Interest rate	3.25	3.32	3.08	3.20
Net return (A-B)		15.27	22.90	24.06	17.97
Change in net return		-	+7.63	+8.79	+2.70

*NVT = no veterinary intervention
VT = veterinary intervention

Conclusions and implications

Short-term strategic fattening programmes based on supplementing grazing are feasible even in areas of land shortages, provided there is some land available for grazing. Agro-industrial by-products such as oilseed cakes and brans are good potential supplements to grazing. Urea and suitable forages and forage legumes also have potential as good feed supplements. Research into integrating forage and food crops is needed (intercropping, mixed cropping, etc.) and should be part of sheep fattening research. Pulses and grains should be avoided where their prices are high because they are part of human diets. Leguminous trees such as sesbania may also have potential as a supplement, but further on-farm research is required.

Conventional wisdom states that farmers' incomes can be increased through strategic feeding using the zero-grazing pen-feeding method. However, economic analysis shows that feed packages developed for this method are not economically viable. Alternative feeds tested have not resulted in much higher profitability compared to traditional methods of strategic feeding. Oilseed cakes such as noug and cotton do not seem to have any advantage over grains that are also used as human food. Other factors such as availability of inputs and financial risk have not been taken into consideration in this partial budget analysis. Furthermore, the genetic potential of the sheep breeds to respond to better feeding may have to be studied. The low marginal returns obtained for pen-feeding indicate that alternative feeding and crop production strategies should be tested on-station before on-farm tests.

Veterinary prophylaxis does not appear to affect weight gain under strategic short-term fattening programmes. Reproduction is not a factor in fattening for sale at times of peak demand.

The results show a number of socio-economic factors that can only be addressed at the farm level. These also need to be addressed in the design of station trials. The following technical and socio-economic factors may have to be considered when planning future trials:

· the alternative economic activities of the farm household need to be considered when choosing feeds;

· the effect of times of purchase and sale on profitability;

· the factors affecting consumer preferences in animals such as desired size, and therefore price, in order to achieve maximum income;

· the food preferences of farmers and relative market prices of alternative feeds; and

· the relative land and labour requirements for crops and forage production when considering the fattening period.

This study showed that analysing socio-economic factors is critical for achieving satisfactory results. Socio-economists can play an important role in designing effective strategic sheep fattening methods and designing station and on-farm trials.

References

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