Inputs and outputs of goat production in general, and the improved goat production in particular were identified by the farmers during the interviews. These factors will be used in illustrating the framework for economic analysis.
Figure 1. The inputs and outputs of goat production in the Bhusunde Khola Watershed
Sporadic data concerning the costs and benefits related to these inputs and outputs were also discussed during the farm interviews. For most inputs and outputs there is no market price valid for the area and if a 'real' economic analysis of the goat production was to be made at this stage, estimates and best guesses would have to be made. Below is a list of the inputs and outputs as discussed with the farmers. As can be seen from the list, this material is not adequate for validation of the various factors important in the goat production, and would need further investigation. Inputs and outputs include both non-marketed and non-monetary values in addition to market inputs and outputs.
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INPUTS | |
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Type of input |
Estimated value |
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Labour |
If the farmers were in a more commercial farming system anticipated market prices could have been put to labour, whereas for the subsistence farmers in Bhusunde Khola we have to use opportunity costs to represent the values that the farmers place on labour. Reliable estimates of opportunity costs are not readily available. |
|
Tree fodder and grasses |
Labour for collection. A big 'bundle or a dhoko (basket) per goat were given as rough estimate. This could take from 10 minutes up to an hour to collect, depending on the distance the women would have to walk. |
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Grazing/herding |
Labour for herding. Goats from 3-4 households often graze together under the control of one herder. |
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Water |
Labour input for collecting water is minor as the goats do not consume large amounts (especially compared to cattle and buffaloes). |
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Improved sheds |
Labour |
|
De-worming tablets |
10-12 NRs every 6 months |
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Local medicine |
Labour for collection of herbs and preparation of the medicine. |
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Buck service |
10 NRs per service for non-members |
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OUTPUTS | |
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Type of outputs |
Estimated value |
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Cash |
Cash |
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Manure |
Goat droppings are highly valued as manure. In trying to estimate the value, the cost of chemical fertilisers that equals the nitrogen value of the goat manure could be used. A rough estimate of the amount of manure produced by 1 goat/year was given as 3 muri (a special basket), 50-100 kg. |
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Food security |
Socio-economic factor of high importance for decision-making and should be considered in an economic analysis on household level |
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Savings |
- do - |
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Social prestige for the women |
- do - |
Partial budget analysis
As a means to establish the basis for planning changes, or for evaluating the consequences of already made changes in farm practices that affect only part of the farm, partial budget analysis can be a useful tool. The idea is to set up a budget including only factors contributing to changes in the activity under consideration. The activity in question is evaluated by the changes in extra costs, costs saved, revenue foregone, and extra revenue, as well as by evaluating the non-quantifiable often socio-economic benefits or losses. Partial budgeting is most often used to evaluate the effects of relatively small changes in farming practices. It only shows the extra expenses and the extra revenue resulting from the change. It is a relatively easy procedure, although it requires validated estimates of inputs and outputs (losses and gains) of the activity being considered.
In the Mahila Chetna Samaj case, as well as other groups involved in goat production and organised in the same way, partial budget analysis can be carried out on two levels: 1) at the group level for the purchase of the improved buck, and 2) at the household level for the investment in improved goat production.
1) Analysis at group level for the purchase of the improved buck:
The group' purchase of an improved buck can be regarded as an activity of the group separated from the goat production of the individual women. A partial budget for this activity will make it possible for the group to compare the benefits and costs. If a partial budget is set up for other possible activities, comparisons can give indications on what will be most interesting for the group to develop according to the objectives of the group.
The group kept the last buck for 18 months, but the present expectations are one year. The estimated values in the budget should be for the same timespan.
Table 2. An example on how to set up the partial budget for a group purchase of an improved buck, and suggestions for which factors to include in the evaluation. All values are supposed to cover the period the buck is expected to be kept.
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LOSSES (comparative additional losses) |
GAINS (comparative additional gains) |
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Extra costs |
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Costs saved |
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|
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· purchase of buck |
? NRs |
· possible factors? |
? NRs |
|
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· transport, if paid by group |
? NRs |
|
||
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· kudho? |
? NRs |
|||
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· tree fodder? |
? NRs |
|||
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· special treatment during adjustment phase and possibly later? |
? NRs |
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Revenue forgone |
|
Extra revenue |
||
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· alternative use of fodder trees needed for extra fodder, e.g. for fuelwood or timber? |
? NRs |
· income from selling buck after 1 year |
? NRs |
|
|
· income from selling maize used for extra fodder (kudho)? |
? NRs |
· payment for mating services, cash |
? NRs |
|
|
· Alternative use of the money invested in the improved buck? |
? NRs |
· payment for mating services, fodder |
? NRs |
|
|
Total losses |
xxxx NRs |
Total gains |
yyyy NRs |
|
|
Extra profit = total additional gains - total additional losses |
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Other considerations: |
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· Possibility of increased outcome from improved goat production |
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· Prestige for the women in the group |
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· Veterinary services |
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· Risks related to serious illness/death of buck; low 'service level' of the buck |
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Extra costs
Extra expenses or costs that occur in relation to the planned (or already made) change. In this case it would be the cost of investment in the improved buck plus the extra expenses to extra fodder and caretaking, compared to using local bucks.
Revenue foregone
Any revenue which would (or could) be received under the present farming practice, but which would not be received under the changed practice. In this case it would be the income
'lost' (not received) from the alternative use of the fodder and/or the 'extra profit' from enterprises that money invested in the buck could have been used for (e.g. commercial vegetable production).
Costs saved
Costs saved as a consequence of the changes, i.e. costs that are avoided as a consequence of the change.
Extra revenue
Any revenue which is received as a result of the change in the farming practice. In this case it is profit from mating services and from selling the buck.
2) Analysis at household level for the use of an improved buck:
Table 3. An example on how to set up a partial budget for the production of improved goats. The factors included under the different headings are suggestions derived from the case (using the service of an improved buck paid for either with fodder or cash). All values are supposed to cover the full period the goats are expected to be kept until selling/slaughtering.
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LOSSES (comparative additional losses) |
GAINS (comparative additional gains) |
||
|
Extra costs |
|
Costs saved |
|
|
· payment for buck service? |
? NRs |
· possible factors? |
? NRs |
|
· extra kudho? |
? NRs |
|
|
|
· extra labour for caretaking? |
? NRs |
||
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· extra tree fodder? |
? NRs |
||
|
· improvement of shed? |
? NRs |
||
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Revenue forgone |
Extra revenue |
||
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· alternative use of fodder trees needed for extra fodder, e.g. for fuelwood or timber? |
? NRs |
· difference in price when selling the offspring |
? NRs |
|
· income from selling maize used for extra fodder? |
? NRs |
|
|
|
Total losses |
xxxx NRs |
Total gains |
yyyy NRs |
|
Extra profit = total additional gains - total additional losses |
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If 'total gains' are greater than 'total losses', the budget obviously indicates that the proposed change is profitable. In a situation where 'total losses' exceeds 'total gains' and the 'extra profit' becomes negative the farmer might still be in favour of the new activity or practice due to the importance of the so-called 'other considerations'. For example, if the group activity 'purchase of improved buck' shows a negative result the expectations of increased outcome from goat production at the household level might be important enough to keep the interest in the 'purchase of improved buck' group activity. (For further reading on partial budgeting, refer to Dillon and Hardaker, 1993).
The difficult task in this exercise is to get good estimates of the technical and financial values used in the calculations. The framework described in the following section is an attempt to set up a process with maximum farmer involvement where optimal estimation of these factors is an important part.
