9.6 Major livestock production systems

9.6.1 The pastoral system
9.6.2 The agropastoral system
9.6.3. Smallholder production system in high potential regions: The case of the smallholder dairy producer
9.6.4 Large-scale livestock production system

The foregoing discussion forms the necessary context for a detailed examination of the four major livestock production systems in Alphabeta. After the production systems are described, marketing policies and development strategies relevant to the livestock sector will be discussed.

9.6.1 The pastoral system

Pastoralists derive most of their income or sustenance from keeping livestock where most feed is natural forage rather than cultivated fodders and pastures. Invariably, pastoralists occupy arid and semi-arid regions that are not conducive to rainfed agriculture. In most cases, the bulk of their working time and energy is spent in looking after livestock rather than in other economic activities.

Pastoralism

Approximately 300,000 pastoral family units occupy the arid regions of Alphabeta. Carrying capacities in these regions are comparatively low and rainfall is erratic both within and between seasons. The environment offers few opportunities for subsistence production apart from livestock rearing. The majority of pastoralists prefer to subsist on products obtained from their herds (e.g. meat, milk).

Milk is the principal item of subsistence consumption. Average per caput intake is approximately 25 kg/year. Average per caput consumption of meat from all sources (cattle and smallstock) is 9 kg/year. These intakes are low. Researchers at Alphabeta University estimate that the human:cattle ratio should be between 1:13 and 1:15 in order to meet full dietary requirements from pastoral activities alone, without depleting herds. In Alphabeta, however, the average ratio, at approximately 1:5, is substantially lower than this ideal (Table 9.8). Historical evidence suggests that it has been declining slowly over the past several decades.

Table 9.8. Livestock units (LU) in relation to human population and land area.

Production system	Grazing area ('000 ha)	LU N('000)	LU per caput	Land area/LU (ha)
Pastoralist	37,834	4,34	4.97	8.77
Agropastoralist	5,809	2,859	0.97	2.03
High potential smallholder	3,788	4,470	0.75	0.85
Large farm	1,590	877	1.27	1.81

Because of their inability to provide sufficient nutrition from their own herd resources, the majority of pastoral households must provide supplements from other sources (Table 9.9). For most, this involves sale or barter of livestock for maize or other grains and commercial products. Marginal pastoral producers become increasingly dependent on community support to meet subsistence needs, and/or alter their consumption habits by supplementing food with purchases from the non-pastoral sector. The majority of Alphabeta pastoralists now sell or barter cattle or other stock to purchase food and to pay for non-food requisites. Surveys have shown, for example, that even during the wet season, pastoralists obtain up to 50% of their caloric intake from purchased food and that this figure can increase to as much as 70% during the dry season. The expanding wage economy in urban centres is also attracting temporary out-migration of some members of pastoral households, particularly young men with a high wage potential (Table 9.10).

Table 9.9 gives data on cash consumption expenditure on non-pastoral commodities for a sample of pastoral households in two different income classes. Table 9.10 provides similar household data by income class on cash income received from different sources. It does not include imputed values for home-consumed products (i.e. milk, meat, hides etc).

From these tables, the following general points should be noted:

· Maize is the main food consumption item. Class I households commit a slightly higher proportion of total expenditure to food purchases than class II households.

· Cattle are the most important income source for both groups but cash received from employment and money transactions is also significant.

· Cash receipts for both income classes are normally in excess of expenditure. In good years this permits the accumulation of additional stock. In bad years and during times of household misfortune, this accumulation can be upon to meet extraordinary cash needs. In this way, accumulation and disposal of stock help to maintain stability in the household standard of living. Surpluses are- also invested in school fees.

Table 9.9. Average pastoralist cash consumption expenditure per caput on food and non-food items by income class (sample survey data).

Commodity		Income class1
		I		II
		Total expenditure2 (A$)	% total expenditure3	Total expenditure (A$)	% total expenditure
Food
	Maize	4.50	16.0	6.00	15.8
	Sugar	3.25	11.6	4.00	10.6
	Tea	1.50	5.4	1.50	3.9
	Hotel food & drinks	2.25	8.0	2.25	5.9
	Other items	3.50	12.5	3.75	9.9
	Subtotal	15.00	53.5	17.50	46.1
Non-food
	Clothing	4.50	16.0	6.25	16.5
	Consumables	1.25	4.5	1.25	3.3
	Medical & transport	3.00	10.8	4.50	11.8
	Household items	0.50	1.8	0.50	1.3
	Money transactions	3.75	13.4	8.00	21.0
	Subtotal	13.00	46.5	20.50	53.9
Total4		28.00	100.0	38.00	100.0

¹ Income classes are based on stock ownership levels per household. Class II (wealthier) households have 8-10 times more cattle and 5 times more smallstock than class I (poorer) households. A middle class was also defined in the survey but results are not included.

² A$ 1 = US$ 3.00 (official exchange rate).

³ The table includes purchases only.

⁴ At a mean household size of 6-7 persons, this implies an approximate annual expenditure on food and non-food items of A$ 170-200 for class I households and A$ 230-270 for class II households.

Despite the nutritional constraints imposed by inadequate (from the perspective of the individual household) livestock herds, livestock ownership is highly skewed. Some pastoralists are in a much better position than others to meet consumption requirements from their own pastoral resources alone. Sample data indicate a distribution pattern that has 10% of livestock owners owning approximately 50% of all livestock units (Figure 9.1).

Table 9.10. Sources of pastoralist cash income per caput by income class (sample survey data).¹

Source of income		Income class
		I		II
		Cash income (A$)	Cash income (%)	Cash income (A$)	Cash income (%)
Livestock sales
	Cattle	33.10	58.4	71.65	74.4
	Smallstock	1.50	2.6	2.50	2.6
	Milk	0.85	1.5	0.85	0.9
	Hides and skins	1.50	2.6	0.20	0.2
	Subtotal	36.85	65.1	75.20	78.1
Other Income
	Cash from labour	8.25	14.6	10.75	11.1
	Money transactions	9.60	17.0	10.00	10.4
	Beer brewing	0.95	1.7	0.20	0.2
	Other income	1.00	1.7	0.20	0.2
	Subtotal	19.80	35.0	21.15	21.9
Total2		56.65	100.0	96.35	100.0

¹ Income classes are defined in Table 9.9.

² For a mean household size of 6-7 persons, this implies a total cash receipt of A$ 340-395 annually for class I households and A$ 580-675 annually for class II households.

Figure 9.1. Distribution of cattle ownership for the pastoral subsector (sample survey).

Note: Stock unit is equivalent to one or six small-stock.
This ratio approximates the commonly used Tropical Livestock Unit (Table 9.6)

Herd production and composition parameters

Mature cows constitute approximately 40-45% of the average household herd. The average milk yield per cow per lactation ranges from between 150 and 250 kg/year. Approximately 50% of the milk produced is consumed by the calf. Herd composition figures for a sample of pastoral households were as follows:

Stock category		% of herd
Calves - female		12.9
	- male	12.7
Heifers		13.2
Immature males (1-3 yrs)		10.0
Cows		40.6
Mature males		10.6
		100.0

Calving rates average 60-65% but mortalities of 0-1 year old stock are high at 25-30%. Mortalities for other classes of stock are in the order of 7-10%.

Steers (more than three years old) form the majority of the cattle sold. During periods of severe scarcity (drought), few male calves are retained, in an attempt to maintain milk production and herd productive potential.

Net offtake rates for cattle vary between 8 and 13%, the principal determinants being seasonal range conditions and the terms of trade between livestock commodities and food consumption items. In drier years, the offtake rate will tend to be higher to compensate for loss in herd productivity and to reduce the risk of loss through death. In those years, purchased food will also tend be more expensive (or scarce) and higher sales levels will be required in order to meet cash needs.

Pastoralism and environment

Given the overriding importance of producing food for human subsistence, preservation of the herd is more important to the Alphabeta pastoralist than preservation of the environment. Preservation of the herd is synonymous with preservation of wealth and household well-being. The larger the herd, the greater the subsistence standard of living, the greater the household's security, the greater one's wealth and the greater the likely social status. Reinforcing this is the fact that under the communal grazing system, individual herd owners have no effective constraints on herd size except the amount of vegetation on the range itself. Pastoralists show a strong tendency to expand herd size up to the grazing capacity of the land. This tendency, along with human population growth, has put pressure on the environment. As indicated earlier, pastoral grazing lands are considered to be 30% to 40% overstocked and much of the pastoral area is judged to be under moderate to severe erosion hazard. Data on livestock numbers in the pastoral regions are presented in Table 9.11.

Table 9.11. Livestock numbers in the pastoral regions.

Year	Cattle ('000 LU)	Smallstock ('000 LU)	Other1 ('000 LU)	Total LU ('000 LU)
1	2852.3	333.4	857.6	4043.3
2	2896.7	340.2	872.5	4109.4
3	2912.4	345.1	875.6	4133.1
4	2932.6	350.3	879.4	4162.3
5	2965.8	353.5	883.1	4202.4
6	2998.5	357.2	888.3	4244.0
7	3054.5	354.3	891.3	4300.1
8	3086.2	355.2	895.8	4337.2
9	3080.9	354.7	891.1	4326.7
10	3075.3	354.1	890.4	4319.8
11	3069.0	353.3	889.7	4312.0

¹ Includes donkeys and camels.

9.6.2 The agropastoral system

Agropastoralists derive their living mainly from joint crop-livestock operations. The majority live within the marginal areas of the country, on the fringe of the pastoral zone. Many would prefer to be pastoralists, but are forced by agro-economic circumstances to practice cropping in order to supplement food needs.

Cattle and cropping are complementary enterprises in the agropastoral system. Cattle provide milk, meat, draft power and manure. As in the pastoral community, large herds are a repository of savings and confer status and security on the owner. Crops, on the other hand, provide residues which are used to feed cattle in drier periods of the year.

Agropastoralism

Cattle and smallstock play a critical role in the agropastoralist household economy. Thus, their accumulation is sought. Unfortunately, as with pastoralists, such behaviour has resulted in serious overgrazing and overstocking of grazing lands in these regions. One result is poor average herd performance, as can be seen from the following herd parameters statistics:

· Mortalities
	Calves	25-30%
	Stock < 3 years old	9-10%
	Adult stock (cows, bulls, oxen)	6-7%
· Calving rates		60-65%
· Milk production		250 kg/year

The distribution of cattle ownership by household is skewed and uneven. About 32% of households own no cattle and approximately 10% own no stock at all. In the sample area, 10% of households owned approximately 50% of the cattle while also owning significantly more smallstock. Table 9.12 provides statistics on the distribution of cattle by household and by owner.

Table 9.12. Distribution of cattle herd size by household and cattle owner/category (agropastoral sample survey data).

Distribution by household1			Distribution by owner
No. of cattle	% of households	Cumulative % of households	No. of cattle	% of owners	Cumulative % of owners
0	31.7	31.7
1-3	7.7	39.4	1-3	11.3	11.3
4-7	11.4	50.8	4-7	16.7	28.0
8-10	7.7	58.5	8-10	11.3	39.3
11-14	12.7	71.2	11-14	18.4	57.7
15-17	5.3	76.5	15-17	7.7	65.4
18-20	7.7	84.2	18-20	10.7	76.1
21-30	8.2	92.4	21-30	11.9	88.0
31-40	3.7	96.1	31-40	5.4	93.4
40	3.9	100.0	40	6.6	100.0

¹ The average household owns 10 cattle, 6 goats, 2 sheep and 8 chickens.

The following mean cattle herd size and structure statistics per household were recorded for agropastoralists in the semi-arid regions of Alphabeta:

	(Mean/household)	% of total
Calves	2.34	23.5
Stock (< 3 years old)	1.59	15.9
Cows	3.88	38.9
Bulls	0.22	2.2
Oxen	1.94	19.4
Total herd	9.97	100 0

As with pastoralists, agropastoralists tend to retain female stock to produce milk and to maintain the reproductive potential of the herd. Oxen are also important for draft so that stock sold tend to be oxen and cows which have lost their productive capacity. However, because average herd size is generally low, many herders are increasingly forced to sell young males and even females of reproductive age.

Crop-livestock complementarity

Crops occupy an important place in the agropastoral economy. Unfortunately, crop yields tend to be low and rainfall highly erratic. Yields (kg/ha) for selected food crops are given below:

Maize	400 kg
Beans	200 kg
Groundnuts	160 kg
Grain sorghum	400 kg
Millet	400 kg

As a result, farmers grow a wide range of crops in an attempt to minimise the risk of failure for any one. Despite this, subsistence needs can rarely be met by cropping alone and there is a regular need to buy food to supplement domestic production. Cattle and smallstock sales are an important source of cash for regular food purchases. In addition, many, especially those without cattle (hereinafter referred to as "non-owners"), must meet short-term cash needs from the sale of smallstock, handicrafts, brewing products, crop outputs and/or by the use of off-farm remittances. Even more so than with pastoralists, these latter are becoming increasingly important to agropastoralists. In extreme cases, where alternative sources of cash are not available, households must depend on community support for survival whenever crops fail.

The marketed offtake rate for cattle in the short term (+10%/year) tends to be inversely related to seasonal conditions (as with the pastoral economy), the inflow of cash from alternative sources and to short-term movements in the sale price of cattle. Conversely, cattle purchases (if and when they occur) will tend to be directly related to seasonal conditions and/or to the inflow of money from alternative non-farm sources.

Cash consumption expenditure and sources of cash income

Tables 9.13 and 9.14 provide relevant data for average cattle and non-cattle owning agropastoral households. The following should be observed:

· Cattle owning households are generally wealthier. This is reflected in higher levels of income and higher overall levels of expenditure on food and non-food items. Surplus savings tend to be invested in school fees but are inadequate for stock purchases in normal years. Herd accumulation therefore depends largely on natural increase.

· Non-owner households compensate for low livestock income by engaging in activities such as the sale of handicrafts and brewing products. Consumption expenditure on most food and non-food items is also less than for cattle owning households. Surpluses are negligible and stress in times of crop failure is severe. Remittances are a particularly important complement to on-farm income producing activities. For those without remittances, there is a regular need to borrow money in order to survive.

· Overall, cash consumption expenditures for agropastoralists are marginally higher than for pastoralists. This is probably a reflection of the fact that farmers are more exposed to the monetary economy.

· Standards of living for agropastoralists tend to be lower than for the average pastoralist. This is reflected in lower average savings levels per capita.

Table 9.13. Average agropastoralist cash consumption expenditure per caput on food and non-food items by cattle ownership category (sample survey data).¹

Commodity		Ownership category
		Cattle owners		Non-owners
		Total expenditure (A$)	Total expenditure (%)	Total expenditure (A$)	Total expenditure (%)
Food
	Maize	6.00	13.20	7.20	21.2
	Sugar	4.50	9.9	3.50	10.3
	Tea	2.00	4.4	1.50	4.4
	Hotel food	3.50	7.7	2.25	6.6
	Other	4.50	9.9	4.00	11.8
	Subtotal	20.50	45.1	18.45	54.3
Non-food
	Clothing	7.00	15.4	6.00	17.7
	Consumables	1.50	3.3	1.50	4.4
	Medical & transport	4.50	9.9	3.00	8.9
	Household items	2.00	4.4	1.00	2.9
	Money transactions	10.00	21.9	4.00	11.8
	Subtotal	25.00	54.9	15.50	45.7
Total		45.50	100.0	33.95	100.0

¹ Higher food expenditure for non-owners reflects the fact that owners tend to have larger families and are able to crop more effectively with available labour. Cattle ownership also permits more timely planting. Yields tend to be higher and consumption purchases lower. For the average household of 6-7 people, owners will spend A$ 270-320/year on consumables. Non-owners will spend A$ 200-235/year

Table 9.14. Sources of cash income per caput for agropastoralists by cattle ownership category (sample survey data).

Source of income		Cattle owners		Non-owners
		Cash income (A$)	Cash income (%)	Cash income (A$)	Cash income (%)
Livestock sales
	Cattle	20.00	35.2	-	-
	Smallstock	1.50	2.7	1.50	4.3
	Milk	0 00	0.0	0.00	0.0
	Hides and skins	0.20	0.4	0.10	0.3
	Subtotal	21.70	38.3	1.60	4.6
Other income
	Cash from labour	20.00	35.2	18.00	51.3
	Money transactions	10.00	17.6	8.00	22.8
	Beer brewing	3.00	5.3	4.00	11.4
	Handicrafts	1.00	1.8	3.00	8.5
	Other income	1.00	1.8	0.50	1.4
	Subtotal	35.00	61.7	33.50	95.4
Total		56.70	100.0	35.10	100.0

9.6.3. Smallholder production system in high potential regions: The case of the smallholder dairy producer

Approximately 80% of smallholder units are concentrated in the medium-to-high potential zones of the country. Two types of smallholders can be distinguished. One practices mainly subsistence agriculture and concentrates on the production of crops such as maize, beans and groundnuts. Land holdings for this group are small and management practices are basic. The other group of smallholders is actively involved in the cash economy, producing cash crops such as maize, pyrethrum, tea and coffee and utilising grazing resources for the production of beef or milk from zebu or grade animals. Areas controlled by these smallholders typically range from 2-5 ha in non-settlement areas and up to 56 ha (average 12 ha) in settlement schemes.

One of the major successes in Alphabeta since independence has been the development of a productive small-scale dairy subsector. This subsector now accounts for about 60% of the grade dairy animals in the country and produces over 30% of recorded milk sales through official channels. This latter figure, however, does not account for localised sales through co-operative societies or sales by private arrangement within rural areas. Nor does it account for milk used for home consumption.

Production systems

Within the small-scale dairy subsector, five production systems, broadly classified according to the intensiveness of production and the use of grade dairy cattle, have been identified:

System I

An extensive milk production system based on the use of local zebu cows, grazed on communal pastures.

System II

A low intensity production system based on the use of cross-bred cows grazed on natural pasture, owned by individual farmers.

System III

A moderately intensive production system based on the use of higher grade stock which are grazed on well managed or cultivated pasture land.

System IV

A highly intensive production system identified by the use of pure exotic grade cattle which are grazed on improved pasture with supplementation from fodder crops and/or concentrates.

System V

A highly intensive zero-grazing system based on the use of exotic grade cattle which are stall fed with fodder and concentrates.

Households in systems II-V normally also practice cash cropping. Crops grown in conjunction with dairying include tea, coffee, maize and pyrethrum. Potatoes and other vegetables may also be grown for home consumption. In System I, cotton is often grown as a cash crop. A detailed summary of the dairy management and cash crop production characteristics of each system is presented in Tables 9.15 and 9.16.

Returns to dairying, particularly under intensive systems, are comparatively attractive. This, coupled with policies designed to assist smallholders in the acquisition and management of grade dairy animals, has been a key factor in the rapid expansion of this enterprise in suitable ecological zones. With continual land pressure resulting from population growth, there has been a growing interest in intensified systems of production using napier grass or green maize for supplementary feeding. In the high altitude zones, oats and fodder beets substitute for these crops.

Dairying has also proved to be competitive with other cash crop enterprises in the medium-to-high potential zones. Its attraction has been enhanced by the fact that the operation does not entail such peaks in labour demand as many of the cash crops do. Dairy prices, fixed by government, are also stable in comparison with prices for crops such as tea, coffee and pyrethrum.

Approximately 45% of the nation's grade dairy animals are found within systems I-III, 12% within system IV and only 3% within system V. Herd performance parameters vary with the management intensity. However, the differences are not marked, as can be seen below:

Parameters	Systems
	I	II	III	IV	V
Calving rate (%)	65	-	-	70	70
Calf mortalities (%)	25-30	-	-	20	20
Calving intervals (months)	17	17	17	16	15
Age at culling (years)	>9	>9	9	9	9

Table 9.15. Characteristic features of small-scale dairy management systems.

System type	Extensive	Low intensive	Moderately intensive	Highly intensive	Zero grazing
System no.	I	II	III	IV	V
Breeds and breedingm	· Local breeds	Cross cow (F1)	· Low upgraded cow	· High grade dairy	High grade dairy
	· Use of bull in natural service	· Use of AI or bulls natural service	· Use of AI
	· Uncontrolled mating	· Controlled mating
Rearing methods	Male and female calves suckle dams during lactation	· Male and female calves part-time suckle a restricted amount of milk over a 4-7 month period	Bucket or hand rearing, feeding of whole milk, late weaning, 3-4 months	· Rearing female calves only	· Rearing female calves only
	· Cow cannot be milked without a calf	· It is difficult to milk the cow without a calf	· Cow can be milked without having a calf	· Concentrate	· Bucket feeding
				· Only weaning 2-3 months	· Use milk substitutes
				Bucket feeding	· Concentrate early weaning
Forage production and feeding methods	· Communal grazing of natural grass and bushland	· Individual grazing of naturally regenerated pasture in a fallow system	· Individual grazing on fenced and cultivated or improved pasture	· Grazing cultivated land and	· Growing arable fodder
			· Use of fertiliser	· Feeding of arable fodder crops	· Forage is cut and carried to animals
				· Use of fertiliser	· Fertiliser and manure are used
Cow feeding and management	· Grazing during day and enclosing during night	· Grazing during day and enclosing during night	· Grazing day and night	· Partially grazing	· Stall feeding
	· Feeding salt minerals	· Feeding minerals	· Feeding minerals	· Feeding arable fodder crops in confined areas	· Cattle kept permanently indoors
		· Feeding concentrates occasionally	· Supplementary feeding concentrates	· Feeding minerals	· Feeding minerals
				· Supplementary feeding of concentrates	· Feeding concentrates regularly
Disease control	· Rinderpest and foot-and-mouth	· Tick-borne disease control	· Tick-borne disease control		ditto
		· Rinderpest and foot-and-mouth vaccinations	· Mastitis treatment
			· Rinderpest and foot-and-mouth vaccinations
Possible cash cropping enterprises	· Cotton	Maize, coffee, tea and pyrethrum	Maize, coffee, tea and pyrethrum		ditto

* A cow unit (CU) is defined as a cow plus followers

Table 9.16. Current production and gross margin data for small-scale dairy management systems.

System type		Extensive	Low intensive	Medium intensive	Highly intensive	Zero grazing
System no.		I	II	III	IV	V
Milk production/cow per year (litres)1		330-880	800-1600	1600-2400	2000-4000	2000-4000
Meat production/cow unit per year (kg)		40-60	60-120	60-120	70-110	70-110
Calving interval (months)		15	15	15	14	13
Stocking rates (ha/CU)		0.5-1.0	0.6-1.2	0.6-1.2	0.4-0.8	0.2-0.5
Concentrates (kg/cow per year)		nil	0-100	100-200	200-300	200-500
Labour demand/CU (hours/year)		450	325	375	440	500-800
Capital investment (A$)		5	20	30	40	50
Gross margins (A$)2
	per cow unit	10-20	12.5-25	21-42	94-188	240-600
	per person hour	0.02-0.04	0.04-0.08	0.06-0.12	0.21-0.42	0.48-1.0
	per ha	10.00	15.00	25.00	75.00	120.00

¹ Refers to milk available for sale or consumption. Between 20 and 60% of milk is consumed on farm, with the proportion consumed decreasing as scale of intensity increases.

² Gross margin is defined as the value of output (-) associated variable costs annually.

Cash income and expenditure patterns

Table 9.17 provides relevant data for high, medium and low income earners within the small-scale dairy sector. Income earning capacity and consumption expenditure levels are not necessarily correlated to size of holdings but depend on crop and herd management practices and the combination of enterprises found on farm. One would expect, however, that incomes will be higher in those regions where the cultivation of crops such as tea and coffee, in conjunction with intensive dairying, can be practiced. Some important points emerging from the data are:

· Higher overall income levels are associated with higher proportions of total income earned from farm activities. On the other hand, remittances and other sources of off-farm income become relatively more important as income levels decline.

· Consumption levels increase in absolute terms as income increases but the relative proportion spent on consumption goods is highest for the lower income group. For this income group, savings are negative (i.e. consumption exceeds income) and households in this category regularly need to resort to borrowing in order to survive.

With increasing population density in the medium-to-high potential areas of the country, small-scale dairying, with its potential for intensification, offers considerable scope for maintaining or improving living standards, as average holding sizes decline. This capacity for income improvement has undoubtedly been a major reason for the rapid growth of small-scale dairy operations in the period since independence.

9.6.4 Large-scale livestock production system

Beef cattle

Assisted by a number of donor agencies, Alphabeta has developed a National Livestock Development Programme (NLDP). Its principal objective is to increase beef production by providing credit to four different types of ranching enterprises: group ranches, commercial ranches, company and co-operative ranches in unoccupied areas and individual ranches in pastoral areas. The programme provides facilities and services for livestock marketing, range water development on communal land and disease control. The underlying belief is that stock fattened on these ranches and purchased from rangeland pastoralists would both increase the national offtake and expand the export trade. Other stated objectives of the NLDP include increasing employment in rural areas, particularly in the arid regions of the country, thereby encouraging a more equitable distribution of income and contributing to the conservation of national range resources through the adoption of improved management practices by the ranches.

Table 9.17. Average value and composition of income, cash expenditure and savings by household income earning category (small-scale dairying).

Item	Low income class1		Medium income class2		High income class3
	Amount	% total income	Amount	% total income	Amount	% total income
Farm operating surplus	49.4	49.5	121.0	58.7	300.0	62.8
Non-farm operating surplus	10.5	10.5	24.5	11.9	45.0	9.4
Regular employment	6.7	6.7	22.9	11.2	90.0	18.7
Casual employment	14.2	14.2	12.2	5.9	18.0	3.8
Remittances from relatives	16.3	16.4	20.8	10.0	18.2	3.8
Other gifts	2.7	2.7	4.7	2.3	7.2	1.5
Total household income	99.8	100.0	206.1	100.0	478.4	100.0
Total consumption outlays	122.2	122.0	181.4	59.3	303.0	63.0
Current savings4	(22.4)	(22.4)	24.7	8.0	175.4	36.7

¹ Low income class = A$ 50-150/year
² Medium income class = A$ 150-300/year.
³ High income class = greater than A$ 300/year.
⁴ Parentheses indicate negative savings.

NLDP funds are provided through the National Finance Corporation (NFC) for:

· development of water resources
· stock handling facilities
· development of feedlots
· purchase of steers and breeding stock
· stock dipping facilities
· stock fattening or breeding operations
· development of housing, tracks and firebreaks
· provision of incremental working capital under the terms of the programme.

A more detailed description of the four types of ranch enterprises planned for development follows.

Group ranches. These have been established on trust land in the pastoral regions of the country. The ranches are adjudicated and title deed is vested collectively in groups of 30-450 pastoralists who are the traditional users of the land. Members retain rights for individual ownership and management of their herds but the group must agree to maintain a given stocking rate and to co-operate in livestock marketing if loan assistance is to be given.

Commercial ranches. These are held on lease or owned mainly on a freehold basis by individuals, although partnerships of small farmers may also operate commercial ranches. Ranches which are under original ownership tend to be well managed and well developed and include a number of feedlot operations producing prime beef for export trade and the urban sector. These ranches are primarily located in the medium potential regions of the country.

Company and co-operative ranches in unoccupied areas. The establishment of company, co-operative and, to a lesser extent, individual ranches has been the approach used by the government to develop unoccupied semi-arid range areas where lack of water and the presence of the tse-tse fly have been the major factors inhibiting migration of people from more densely settled parts of the country.

Company ranches are enterprises on state land, leased from the national government or from local councils, where shareholders supply cattle, or a cash equivalent, to gain membership. Co-operative ranches are similar in operation, differing only in the form of shareholding offered. Under both systems the cattle herd is managed collectively with profits being shared according to formal legal arrangements.

Individual ranches in pastoral areas. Small individual ranches have been established in some of the pastoral areas of the country with loans from the NFC. Individual pastoralists may apply for adjudication for a prescribed grazing area. The size of each individual area is dependent on natural conditions as well as on the ability of the individual to convince the authorities of the extent of his traditional claims to land. Average ranch sizes are about 650 ha and loans have been made available for stock purchase and land and water development. Most individual ranchers in this category have large herds and a portion of their stock is retained in the traditional communal areas, thus relieving pressure on their own ranches. As in Botswana (module 7), however, this relaxes the stocking constraint ordinarily supplied by private ownership of land and permits overstocking.

Table 9.18 summarises data on incremental capital costs required for development and steer purchases in the different ranching systems listed above. Development costs include outlays for watering, fencing, bush clearing and dipping facilities. In all cases, provision of water supplies constitutes the main item of development expenditure (approximately 40%).

Table 9.18. Incremental capital per ha for average size ranch operations by category of operation (A$).¹

Ranch type	Development capital	Steer purchase	Total capital
Commercial	3.00	2.00	5.00
Group	1.60	0.90	2.50
Company/co-operative	2.50	2.50	5.00
Individual	2.00	1.50	3.50

¹ Average sizes were given as follows: commercial = 3250 ha; group = 15,000 ha; company = 26,000 ha; individual = 800 ha.

Performance on group and individual ranches. Performance on different ranch types has varied according to ecological zone, management practices and operation. Group and individual ranching operations in pastoral areas have not performed well. Sample surveys indicate that the NLDP has had minimal impact in persuading pastoralists to move towards commercial beef production. This is indicated by the fact that:

· Cattle herd structures remain similar to those in pastoral areas for both group and individual ranches, when bought-in steers are excluded.

· Sales and offtake rates from the basic herd are also similar. Since herd structures are unlikely to alter in the short-to-medium term, the scope for increasing commercial offtake from these ranches is limited. Table 9.19 presents statistics on herd structures, sales and offtake rates which demonstrate the similarities between developed group, individual and undeveloped group ranches. The latter probably do not differ significantly from traditional pastoral areas and are therefore taken as an indication of performance data in those areas.

The programme has, however, had a significant impact on tick control, with ranches dipping stock more regularly than before. The standard of animal health care appears otherwise little changed and the purchase of drugs, vaccines and mineral supplements by group ranch households is low. Individual ranchers, however, appear to be spending more per livestock unit on animal health measures than group ranch households, particularly those with a predominance of exotic blood in their cattle herds. Evidence also suggests that improved dipping and watering facilities have, in some areas, permitted the introduction of exotic stock with higher milk production potential and this must be viewed as a positive benefit resulting from ranch development.

Table 9.19. Basic herd structure, sales and offtake rates (%).

		Developed group ranches	Individual ranches	Undeveloped group ranches
Basic herd structure
	Cows + heifers	65	60	52
	Males	18	22	27
	Calves	17	18	21
Cattle offtake rate (base herd)		8.4	9.5	11.9
Cattle sales rate (base herd)		8.1	8.9	10.1
Smallstock offtake rate		12.4	23.3	19.9
Smallstock sales rate		6.9	10.8	3.5

Performance on commercial and co-operative/company ranches: Another survey concentrating on ranches of these types provided the following information on performance parameters.

· Calving rates: These ranged from 52-80%, with the lower rates recorded on company and co-operative ranches.

· Mortalities: For the sample of commercial and company ranches, the following mortality statistics by category of stock were recorded over a four year period.

Ranching operation	Mortality rates (%)
	Bulls	Cows	Bull calves	Heifer calves	Maiden heifers	Steers
Co-operative/company ranches	18.5	15.5	26.3	21.7	5.0	4.5
Commercial ranches	1.8	3.0	9.2	8.0	3.2	3.2

Commercial enterprises appear to manage stock better than co-operative or company ventures. Mortality rates for the latter were high during the period of the survey, probably due to inexperienced or inferior management. In addition, company and co-operative ranches in the sample were located in the semi-arid regions of the country while commercial operations were concentrated in the medium potential regions. In comparison with mortality statistics from the traditional sector, however, co-operative and company ranches appear to perform no better and adult mortality rates would seem to be even higher. This occurs despite considerable investment in veterinary facilities under the NLDP. With respect to offtake rates, commercial and company ranches performed similarly, the average offtake rate being 15-17% during the survey period (four years). Herd structure statistics vary depending largely on the nature of the ranch operation and the age at which stock are sold.

Dairy cattle

Large-scale dairy operations account for only 40% of the country's grade dairy stock but are nevertheless important as suppliers of milk to the main urban centres and suppliers of quality grade animals to the small-scale dairy subsector.

Within this category, three sorts of operation can be identified on the basis of the management system practiced and ecological location of the operation. They are:

Dairy ranching in medium potential regions. Farmers in this category provide less than 10% of marketed milk production and operate a complementary dairy activity in conjunction with beef production. Breeds are commonly dual purpose or crossed with dual-purpose stock. Male progeny and cull animals are sold as beef. Production is seasonal to avoid the heavy cost of purchasing concentrate feed and labour demands per cow are low. Favourable milk prices, relative to those obtained from beef, have induced ranchers in these regions to practice this form of extensive seasonal production, despite average annual milk yields of only 1500 kg/cow.

Extensive dairy farming in high potential regions. Farmers in this group manage dairy cattle on extensive natural pasture/ley systems (50:50) with supplementary feeding of concentrates and fodder crops. Milk yields per cow average only 2000 kg/year and stocking rates of 1.0-1.2 ha/cow unit are most common. Management is of a modest standard and rising input costs have forced a substantial number of producers out of production. Improved exotic dairy breeds are used for production and calving intervals average 15 months.

Intensive dairy production in high potential regions. Systems within this group are mainly stall-fed operations with a limited amount of supplementary grazing. Management is generally of a high calibre and stocking rates of 0.75 ha/cow unit are common. Emphasis is given to supplementary feeding with hay and/or silage and-concentrates (300 kg/cow annually). Milk production per cow is normally in excess of 3000 kg/year and exotic grade cattle (Jersey, Guernsey, Friesian) are used for production. The calving interval is 14 months and the calving rate is between 80-90%.

Poorly managed systems in the high potential zones are not competitive with crops such as maize and wheat on a gross margin basis. Thus, some extensive dairy operations are being phased out. However, since management is often sub-standard, a better option for some of these operations may be to improve management practices and remain within the industry. It is estimated that yields must exceed 2500 kg/cow annually for such operations to remain economically viable.

Important points (9.6) The pastoral system · Pastoralists occupy and regions and depend primarily on livestock for their subsistence. · Because of low carrying capacities and population pressure in these areas, pastoralists. supplement their food needs by purchasing or bartering from other sources. · In the arid regions optimum human:cattle ratios to meet full dietary requirements from pastoral activities alone should be between 1: 13 and 1: 15 as against the present average ratio of 1:5. · Mature cows comprise approximately 40-45% of the average pastoralist household herd. · Overstocking and overgrazing along with human population growth have put pressure on: the pastoral environment. The agropastoral system · Agropastoralists occupy marginal areas of the country, deriving their living mainly from complementary' livestock and cropping activities. · Agropastoralists resemble pastoralists in their herd structure, performance and ownership patterns and in their desire to accumulate stock. · Food crop yields in agropastoral areas tend to be low. The smallholder system · The majority of smallholders are concentrated in the medium-to-high potential areas. · Smallholders are of two types: one which is subsistence-oriented and another which is actively involved in the cash economy and in beef and dairy enterprises. · The small-scale dairy subsector accounts for almost 60% of the grade dairy animals in the country. · Within the dairy subsector, production systems of five degrees of modern or intensive management practice can be identified. · Returns to dairying in intensive systems are attractive and this offers great scope for improving smallholder living standards. Large-scale production systems Beef · Improving beef production is the main objective of the NLDP. · NLDP funds are provided through the NFC to four types of ranches for the development of various facilities related to beef production. · Commercial and company/co-operative ranches have performed well while performance on individual and group ranches has remained close to that observed on undeveloped group ranches. Dairy cattle · Large-scale dairy operations account for only 40% of the country's grade dairy stock. · For large-scale dairy enterprises to remain economically viable, milk yields must exceed 2500 kg/cow annually. Economic inferences · Decisions about herd size and livestock sales are motivated principally by economic factors and constraints. · Pressures of the cash economy and the expansion of the urban-based wage economy are stimulating temporary out-migration from agriculture. As a result, farm labour is constrained and labour-intensive options for productivity improvement are restricted. · Farmers are attempting to allocate their resources (grazing land, livestock, family labour) to those uses with the highest net returns. · Pastoralists and agropastoralists are constrained from expanding their herds by poor herd dynamics parameters and low savings. Thus, herd sizes tend to fluctuate in response to natural conditions. · Decisions about choice of enterprise are governed by gross margin calculations. · A lack of concern for the environmental implications of their actions is not necessarily an inherent feature of pastoralists, agropastoralists or subsistence-oriented smallholders. Rather, it is imposed by the relative marginality of their existence, household resource constraints and the imperatives of an increasingly free-access range.