14. The decision to replicate and expand the scheme from its first phase to the second was apparently informed by the assessment of the performance of the scheme in particular and the FLDP in general. The basis that evaluators of the scheme used for giving the SHFS (under the FLDP) a "pass mark" still remains largely unclear.
15. Using the aggregate recovery rate (of loans disbursed to beneficiaries) as one of the major criteria to justify its replication to an expanded phase seems very curious and unrealistic, in view of the incredibly high costs incurred by the implementing agencies in the procurement of supplementary feeds and minerals, veterinary drugs, and making same available to the beneficiaries at highly subsidised rates. Also, the cost of man-hour labour inputs of the farmers as well as those of the executing agencies are all pan of the uncomputed costs that went into the scheme.
16. These "hidden costs" ought to have been accounted for in making a proper assessment of the performance of the scheme. Without this, only a partial, and rather blurred picture of the whole story can be drawn. Furthermore, the lack of complete returns/records from many states makes it difficult to offer an accurate account of the scheme let alone to claim with certainty that it has been very successful. For instance, in the final report (Project Completion Report) on the scheme, incomplete data were recorded for at least seven of the nineteen states covered by the scheme (see NLPD, 1988:6). In addition, the reported high loan recovery rate may turn out to be not as impressive as it seems if complete records were to be considered in the final computations. The seemingly impressive low loan default rate becomes hard to substantiate when states are considered individually.
17. Using available data (NLPD, 1988), our computed default rate for the states that made complete returns ranged between 3.5% for Bendel State and 82.3% for Niger State (Table 2). Taking a look at the aggregate net default, it can be observed that the default rate for the ten states considered was as high as 51.4%. This immediately raises some doubt about the expressed performance of the scheme as contained in the Project Completion Report. In that report, it was observed that the default rate was insignificant. Observations based on Table 2 do not bear this out.
18. Furthermore, if each state is considered individually, it would be seen that some states performed relatively worse than others in terms of loan repayment. The case of Bendel State with a loan recovery rate of 94.5% can be contrasted with Niger State with a loan recovery rate of only 17.7%. A variety of factors may be associated with the varying level of loan recovery from beneficiaries Such factors may include unanticipated costs incurred by the farmers in the process of fattening livestock, their management abilities, sale price of fattened animals, and so on.
19. The above observations focus only on one of the grounds on which the SHFS under the FLDP was judged a complete success. Other aspects that have not been considered enough include the economics of the scheme measured in terms of weight gains and profit margins resulting from the fattening operation. It has been observed that "the average rates of live weight gain are low" (Craig, 1982:386). By implication, the profit margins of the farmers can be considered to be very low as well. This is especially so where the sale of animals in open markets is hardly based on weight. Often, the physical appearance and conformity of the animal to certain traditional values are the determinants of the sale price.
20. Many SHFS participants have indeed been unable to break-even at the end of the fattening period. Making a similar observation regarding the lack of economic wisdom in projects like the SHFS, McLeroy and Salahu (1971) remarked that farmers were unable to fetch a premium for their cattle and therefore lost money in the process A similar trend can be observed with the SHFS under the Second Livestock Development Project.
21. In Table 3 the liveweight gain is assessed along with the market value of the animals after fattening, based on the returns made by the participating states. While average weight gain was about 78 kg over the 60-90 day period, there is considerable variation between states. For example, Sokoto State recorded a mean weight gain of 20 kg while Kaduna State had the highest weight gain of 125 kg. Using the average weight, liveweight gain of about 0.86 kg is achieved under the scheme for all the states pulled together.
22. It may be observed that the recorded mean daily liveweight gain per animal was quite high. This is especially so when liveweight gains achieved under the SHFS are compared with similar liveweight gains of animals fed under feedlot trial conditions. The SHFS liveweight gain can, therefore, be considered a partial success if liveweight per se is considered. However, the question of the dressing percentage of such fattened animals will have to be addressed. In that case, the critical factor in the fattening operation would be the dressed weight rather than the liveweight gain. Comparable liveweight gains have been achieved under feedlot trials over a shorter period but with high inputs of concentrates (see Olayiwole et al, 1981).
23. Liveweight gain in itself may not be a critical consideration for the farmer who has a profit motive behind fattening livestock. The profit margin of the operation is the main concern of the farmer. No matter what the gain in liveweight is, it does not mean much to the farmer if the weight gain is not translated into cash value.
24. In Table 3 the average difference between the pre-fattening and post-fattening values for a three-month period is N443. This means that the farmer is able to earn about N 148 a month for every animal fattened. From this value, deductions have to be made for the costs of other inputs such as all the feeds and mineral supplies, veterinary drugs, animal handling costs (at purchase and at sale), costs of labour (hired and domestic hands), interest to be paid on loan and other miscellaneous expenditure associated with the scheme. Data on these inputs were not available for this analysis and therefore have not been included in the calculations of the profit margin. However, assuming that about 50% of the post-fattening value goes for inputs other than the cost of purchasing the animal, the farmer would be left with little or no profit. This is because of the high rate of inflation that has accompanied the massive devaluation of the Nigerian currency 1.
25. But using Craig's (1982) estimates, the profit margin over visible costs of inputs (at highly subsidised rates) cannot be considered attractive enough to encourage participating farmers to continue in the scheme or to attract new entrants seeking profit from fattening animals. A profit margin of only N 15 was presumed by Craig in 1982 (Table 4). With the current prohibitive costs of inputs it can be expected that the farmer will hardly break even let alone make any profit. The economic rationale of the scheme is, therefore, not convincing.
26. The foregoing observations on the low economic returns from the SHFS has not considered the costs of subsidising feed supplies, staff man-hour, veterinary drugs and supplies, and other logistical costs on the part of the supervising agencies. One then wonders what the situation would be if all these costs are accounted for and borne completely by the farmer.
