N S Y Mdoe, G. I Mlay and N A Urio
Sokoine University of Agriculture
PO Box 3007, Morogoro, Tanzania
ABSTRACT
This paper discusses the costs associated with the utilisation of crop residues and planted pastures as major animal feed resources in smallholder production systems in the highlands of Hai District, Tanzania. The quantitative effects of changes in transportation costs and prices of concentrate supplements on the profitability of using crop residues and planted pastures are illustrated using linear programming models. The costs associated with the use of planted pastures are lower than those associated with the use of crop residues obtained from maize and bean farms in the lowland zone, especially in the long term. And the difference becomes greater as transportation costs and prices of concentrate supplements increase.
RESUME
Comparaison des coûts associés à l'utilisation des résidus de récolte et des cultures fourragères dans les systèmes de la petite exploitation dans le district de Hai en Tanzanie
Cet article est consacré à une analyse des coûts associés à l'utilisation des sous-produits agricoles et des cultures fourragères en tant que principales sources d'aliments du bétail dans les systèmes du petit élevage des hauts plateaux du district de Hai en Tanzanie. Des modèles de programmation linéaire ont servi à illustrer les effets quantitatifs des variations des frais de transport et des coûts des concentrés sur la rentabilité des résidus de récolte et des cultures fourragères. Dans les plaines, les coûts associés aux cultures fourragères sont inférieurs à ceux relatifs aux résidus des cultures de maïs et de haricot notamment à long terme. Cette différence se creusait avec l'accroissement des frais de transport et du prix des concentrés utilisés comme compléments.
INTRODUCTION
Smallholder production systems based on crop growing combined with stall-fed crossbred dairy cows have been successfully developed in the highlands of Hai District, Tanzania. Increased population pressure has resulted in progressively smaller agricultural holdings and grazing land has been taken for perennial crops, especially coffee and banana. Lack of grazing land has induced most smallholder farmers to resort to using crop residues from the lowland zone and established pastures from the highlands as major animal feeds. The most common crop residues are maize stover and bean straw. Planted pastures include elephant grass (Pennisetum purpureum), setaria (Setaria anceps), Guatemala grass (Tripsacum laxum) and Desmodium spp.
Various projects have been initiated to improve feed resources for small farmers in Hai District. For example, the Integrated Dairy Development Programme, financed by FAO (Food and Agriculture Organization of the United Nations), was started in 1985. One of its objectives was to improve feeding of dairy cattle by helping smallholder farmers to grow improved pastures on their own land, and by improving the nutritional value of crop residues. Another project, the Dairy Feeding Systems project, financed by the International Development Research Centre of Canada, was started in 1984. Phase I of this project, carried out between 1984 and 1987, concerned developing feeding packages based on maize stover, bean straw and molasses-urea, and these feeding packages have been adopted by many smallholder farmers in the highlands (Mdoe and Mlay, 1990). While continuing with the activities of phase I, phase II of the project has put more emphasis on developing planted pastures in smallholder farmers' plots in the highlands.
There are problems associated with both categories of feed resources that the above projects are attempting to improve. Crop residues must be transported from maize and bean farms in the lowland zone to the homesteads in the highland zone. Furthermore, crop residues have low nutritive value, and so must be supplemented with high levels of concentrates. Establishment of pastures, on the other hand, is constrained by scarcity of land; most of the land is already under coffee/banana. However, if the costs of establishing pastures are compared with those of using crop residues from the lowland zone, it might be less costly, in the long term, for the farmer to use some land for pasture establishment rather than depend on crop residues.
Feed accounts for a large proportion of the total cost of dairy production, so the profitability of smallholder milk production can be increased if farmers could use low-cost feed resources that provide the required nutrients.
This paper discusses the costs associated with utilising crop residues from the lowlands and planted pastures in the highlands in Hai District. It then assesses the impact of changes in transport costs and prices of concentrate supplements on the profitability of using these feed resources, based on results of linear programming models developed by Mdoe (1985).
COSTS CONSIDERED
Beinerlein (1986) categorises into explicit and implicit costs. Explicit costs are cash costs incurred when inputs are purchased for production and these costs are directly determined as the money outlay required to obtain inputs. Implicit costs are costs which do not involve direct payment; they include unpaid family labour, depreciation and opportunity cost of resources.
Implicit costs are difficult to quantify (Osburn and Kenneth, 1982). Even so, they must be considered in estimating costs of production; if they are not, such estimates tend to be understated. Implicit costs considered in this paper are the opportunity costs of resources; opportunity cost is expressed as the return a resource can earn when put to its best alternative use.
COSTS ASSOCIATED WITH UTILISATION OF CROP RESIDUES
Major costs incurred by smallholders in using crop residues as animal feed in the highlands of Hai District include transport costs, upgrading costs and the opportunity cost of removing crop residues from farms in the lowlands.
Transport costs
Crop residues have to be transported from maize and bean farms in the lowlands to the highlands where animals are stall-fed. The bulkiness of the crop residues and lack of transport constrain the utilisation of crop residues. Modes of transporting the crop residues include carrying them on the head, bicycles and vehicles, especially pick-ups. Because hiring pick-ups is a common practice in the area, rising fuel prices and/or shortages of vehicles and spare parts will lead to increasingly high costs of transporting crop residues.
Baling crop residues to reduce their bulk and hence increase the quantity that can be transported could be a way of reducing transport costs. Baling is expensive for individual smallholder farmers, because of the equipment required and the need to bale large quantities to achieve economies of scale. Baling could, however, be carried out on a cooperative basis. Several large-scale farms in Kilimanjaro and Arusha already bale maize stover and bean straw and sell the bales to smallholder farmers.
Costs of upgrading crop residues
Crop residues are characteristically low in protein and high in fibre and lignin. As a result, digestibility is slow, rate of passage is low and voluntary intake is limited. Intake and digestibility of the crop residues could be improved by chopping, chemical treatment or supplementation with concentrates or molasses/urea (Kategile et al, 1981; Kiflewahid et al, 1983; Wanapat and Devendra, 1985). There has been great variation in the extent to which these methods have been practised by smallholder farmers in the highlands of Hai District. The major limiting factor to the adoption of a particular method is the cost involved.
Chopping
Many smallholder farmers in the highlands of Hai District chop stover in order to reduce bulk, increase consumption and reduce wastage. The major drawback is availability and cost of choppers to individual smallholder farmers.
Chemical treatment
FAO started trials on chemical treatment of maize stover in Hai District in 1987. These trials were followed by a small-scale residue treatment campaign in 1988. However, this practice has not been adopted by smallholder farmers, mainly because of lack of availability and high cost of chemicals.
Supplementation with concentrates
The commonest concentrate supplements used in Hai District are cottonseed cake, wheat bran/pollard and maize bran. Smallholder farmers usually buy concentrates from cooperative societies in their villages. The cooperative societies procure and transport the concentrates from the Tanzania Farmers Association, the Kilimanjaro Native Cooperative Union and/or private traders in Moshi and Arusha. This arrangement is very beneficial and popular with smallholder farmers, but it sometimes fails, especially when concentrates are in short supply and the farmers have to buy them from other sources.
Shortage of concentrate supplements is a serious problem, not only in Hai District but throughout Tanzania. And shortages lead to frequent price rises. For example, the price of cottonseed cake increased by more than 400% between 1984 and 1990. For this reason concentrates are mainly used as a stimulant for milk let-down rather than as supplements to increase intake of crop residues.
Supplementation with molasses/urea
A simple plant for mixing molasses and urea has been constructed, with FAO assistance, at a sugar factory 20 hen south of Moshi municipality and about 45-60 km from villages in the highlands of Hai District. The molasses/urea mixture is normally transported to storage tanks built at various cooperative societies which are supply centres to the smallholder farmers. Because of high transport costs, the cost of using molasses/urea as a supplement to enhance intake of crop residues is also high, and is likely to increase even more with the frequent rises in the pace of fuel.
Opportunity cost of crop residues
There is competition between the utilisation of crop residues as a dairy cattle feed and their utilisation to maintain soil fertility in the lowland zone. Most of the crop residues are taken away from farms in the lowland zone and fed to dairy cattle in the highland zone. The cow dung is never recycled back to the farms in the lowland zone; instead it is used for coffee/banana production in the highland zone. Therefore farmers in the lowland zone have to use commercial fertilisers to maintain soil fertility in their farms.
The opportunity cost of using crop residues as feed for dairy cows is the value foregone by not using them to maintain soil fertility.
COSTS ASSOCIATED WITH PLANTED PASTURES
Explicit costs associated with planted pasture are seed, labour and fertiliser or manure costs.
Seed costs
Most smallholder farmers in the highland zone have Guatemala grass, setaria and elephant grass near their homesteads and so can obtain planting materials for these grasses from their own plots or from neighbours at no cost. Forage legumes are not widespread but Desmodium cuttings are available free of charge in most villages in the highlands. Desmodium seeds are, however, difficult to obtain. The Dairy Feeding Systems project has established seed production plots at two sites in Hai District but the Desmodium seed output from these plots is not yet enough to satisfy demand. The small amount of seed that is produced is currently distributed to small farmers free of charge, but it might be necessary in future to charge a small fee in order to sustain the seed production and distribution.
Labour costs
Labour for cultivation, planting, weeding, fertilisation, irrigation and cutting and carrying harvested pasture to cattle sheds is normally provided from within the family, but hired labour is also used to supplement family labour. Labour charges for pasture production depend on the type of work performed, and are higher for cultivation and weeding operations. In general, however, hired labour is available at relatively low cost.
Fertiliser/manure costs
Manure produced by dairy cows and other types of livestock is widely used in the highland zone, not only for pasture production but also for coffee/banana production. Use of commercial fertilisers is recommended where soil nutrient deficiencies cannot be corrected by manure application (Msumali, 1990). Smallholder farmers obtain manure from their own farms or from neighbours, mainly free of charge.
The costs involved in using manure for pasture production are the costs of collecting manure from cattle sheds, carrying it to pasture plots and spreading it on the plots. If family labour is used the farmer does not incur any explicit costs for these operations; explicit costs are incurred only if the farmer hires labour.
Opportunity cost of pasture land
Because land is a very scarce resource in the highlands of Hai District, planted pastures compete for land with coffee and banana production. The opportunity cost involved in using the scarce land for pasture production rather than producing coffee/bananas is therefore the value of the coffee and bananas given up by using the land for establishing pasture.
QUANTITATIVE ANALYSIS OF COSTS ASSOCIATED WITH THE FEED RESOURCES
Multiperiod linear programming results from a study conducted by Mdoe (1985) illustrate the impact of changes in transport costs and prices of concentrate supplements on the profitability of using crop residues and planted pastures as major feed resources.
Mdoe (1985) developed two 20-year period linear programming models - one representing a crop-residue feed-management system and the other a pasture feed-management system - to compare the profitability of using these resources as major feeds for dairy cattle in the Kilimanjaro highlands. The general mathematical form of the model is:
Maximise
Subject to:
and
where:
Z = present value of the net returns
n = number of activities in the kth period of the model
t = time in years
p = number of periods in the model
r = discount rate
m = number of resources used
b = level of resource constraints
cjk = revenue or cost per unit of the jth activity in the kth period
(1+r)-t = present value discount factor at r discount rate for year t
The basic model for each feed management system represented a farmer keeping crossbred cows. Improved or exotic breeds were modelled by altering productivity coefficients in the basic models.
The profits determined in each model were defined as the cumulative net present value (NPV) of net returns over a 20-year planning horizon. The results of the basic models indicate that the use of planted pastures was more profitable than the use of crop residues as major feeds for dairy cows (Table 1). When transport costs were increased by 40% above the 1984 average prices, NPV fell by 12.3% in the crop-residue system but by only 4.7% in the pasture system (Table 1).
The extent to which NPV for each system was affected by increases in prices of concentrate feeds was also assessed. When the price of concentrate feed was increased by 30% above the 1984 average prices, NPV declined by 5% for the pasture system and by 28% for the crop-residue system.
Table 1. Net present value for pasture and crop residue systems with and without increase in transport costs
|
|
Net present value (TSh) |
|
|
Pasture system |
Crop system |
|
|
Without increase in transport cost |
76 655 |
74 704 |
|
With 40% increase in transport cost |
73 075 |
65 527 |
Source: Mdoe (1985)
CONCLUSIONS
The costs associated with the use of crop residues are higher than those associated with the use of planted pastures as major dairy feeds in the highlands of Hai District. They are also affected more by increasing transport costs and prices of concentrate supplements, because crop residues must be transported from the lowland zone to the highland zone whereas pastures are established near the homesteads, and because crop residues require relatively large amounts of concentrate supplements to improve their nutritive as compared to planted pastures. In the short term, initial pasture establishment costs may make pasture production more costly than the utilisation of crop residues. In the long term, however, utilisation of planted pastures becomes less costly than utilisation of crop residues, especially with the ever-increasing fuel prices. Smallholder farmers with limited land to establish adequate pastures should feed crop residues supplemented with forage legumes to increase their returns through higher intake and more efficient digestion.
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