Abstract: Due to rising trend of imported beef from abroad in Malaysia, it is necessary to find out the source of economic beef production with lower government investment cost for beef importation (GICI). In this study, system simulation modeling and cost-benefit analysis have been used. The result showed 5-7% slaughter rate of female breeding stock (FBS) is economic and more effective input for beef production as well as for government investment cost for importation. However, average 58% self-sufficiency rate for beef can be achieved in future at 5-7% slaughter rate, 75-80% calving rate, 1-2% mortality rate.
INTRODUCTION
Due to slower growth of beef production Malaysia imported approximately 88% of its beef requirement from various countries in the form of fresh chilled and frozen meat and live animals to meet the local beef demand.
Beef importation has increased from 14% in 1960 to 88% in 2000. The amount of imported beef increased from 919 metric tonnes in 1960 to 117800 metric tonnes in 2000. Fresh/chilled and frozen beef has been imported either in the form of bone in or boneless. The amount of total frozen imported beef increased from 25006 metric tonnes in 1988 to 53946 metric tonnes in 1996. According to New National Agricultural Policy (NAP), government has put emphasis on the increase of local beef production by lesser beef import (NAP, 1999). Local beef production can be increased by increasing the number of beef population through female breeding stock at lower slaughter rate, mortality rate and higher calving rate but there is a need to maintain lower government importation cost which needs to estimate how much cost, how much benefit and profit will come from the management. Benefit-cost analysis used for economic analysis. The appropriate beef production policy for decision maker at the lowest government investment cost needs to be determined in order to increase beef production at lower investment cost for beef import and female breeding stock import. The objective of this study is to determine imported beef and economic beef production in terms of government investment cost.
Fauzia et al. (2000) have reported if the beef cattle female breeding stock import is increased up to 30 thousand heads/year at 15% slaughter can increase self-sufficiency rate up to more than 30% by the year 2015. The impact of 30 thousand imported female breeding stock at 10% slaughter rate can increase the self-sufficiency rate up to more than 40% by the year 2015. The overall simulated results from Simulation Matrix (SIMM) model indicate that beef production can be increased by higher number of cattle population through higher female breeding stock beef population. Eusof et al. (1999) have reported that increasing the percent calf-crop up to 80% can more than double the self-sufficiency rate by the year 2020. Reducing heifer culled to 10% can increase the self-sufficiency rate to more than 15% but no body considered the government investment cost for beef importation (GICI).
MATERIALS AND METHODS
The overall Simulation Matrix (SIMM) model for beef, dairy and buffalo for the period 1960 to 2015 used according to population distribution component, slaughter component, beef production and consumption component, decision making component under five scenarios. Beef price for 1997 to 2015 calculated by putting different amount of local production under ex-ante analysis was estimated. Cost-benefit analysis is used to calculate cost and benefit for beef production in the study. This required monetary effects on cost, revenue, profit and investment. This information is used in two different ways, firstly, the on going management process required information about simulated values to calculate profit and secondly the lower investment cost at what time period for the highest beef self-sufficiency level in Peninsular Malaysia. These tasks were carried out by a benefitBcost analysis after getting different simulated data up to 2015 by using SIMM model. Simulated data are analyzed economically to find out the lowest investment cost for appropriate beef production policy. The total cost of beef is the sum of beef animal population rearing cost, female breeding stock importation cost and beef production cost. Benefit calculated by multiplying beef price with total beef production. When cost and benefits have been identified, priced and valued, it is ready to determine which among various projects to accept, which to reject. The common discounted measures like Net Present Worth (NPW) and Benefit Cost Ratio (BCR) were used.
| Different management strategies Scenario 1: |
|
| • | No importation of female breeding stock at slaughter rate 10-27%, calving rate 70-75% and mortality rate 5-10% for beef cattle |
| • | No importation of female breeding stock at slaughter rate 10-15%, calving rate 70- 75% and mortality rate 5-10% for dairy cattle |
| • | No importation of female breeding stock at slaughter rate 15-20%, calving rate 70-75% and mortality rate 5-10% for buffalo |
| Scenario 2: | |
| • | Importation of 10000 heads female breeding stock/year at slaughter rate 30-35%, calving rate 76-80% and mortality rate 1-2% for beef cattle |
| • | Importation of 5000 heads female breeding stock/year at slaughter rate 20-25%, calving rate 76-80% and mortality rate 1-2% for dairy cattle |
| • | Importation of 500 heads female breeding stock/year at slaughter rate 25-30%, calving rate 76-80% and mortality rate 1-2% for buffalo |
| Scenario 3: | |
| • | Importation of 10000 heads female breeding stock/year at slaughter rate 5-7%, calving rate 76-80% and mortality rate 1-2% for beef cattle |
| • | Importation of 5000 heads female breeding stock/year at slaughter rate 5-7%, calving rate 76-80% and mortality rate 1-2% for dairy cattle |
| • | Importation of 500 heads female breeding stock/year at slaughter rate 5-7%, calving rate 76-80% and mortality rate 1-2% for buffalo |
| Scenario 4: | |
| • | Importation of 10000 heads female breeding stock/year up to 5 years at slaughter rate 15-20%, calving rate 55-60% and mortality rate 5-10% for beef cattle |
| • | Importation of 5000 heads female breeding stock/ year at slaughter rate 15-20%, calving rate 55-60% and mortality rate 5-10% for dairy cattle |
| • | Importation of 500 heads female breeding stock/ year at slaughter rate 15-20%, calving rate 55-60% and mortality rate 5-10% for buffalo |
| Scenario 5: | |
| • | Importation of 10000 heads female breeding stock per every 5 years at slaughter rate 15-20%, calving rate 55-60% and mortality rate 5-10% for beef cattle |
| • | Importation of 5000 heads female breeding stock /year up to 5 years at slaughter rate 15-20%, calving rate 55-60% and mortality rate 5-10% for dairy cattle |
| • | Importation of 500 heads female breeding stock/ year at slaughter rate 15-20%, calving rate 55-60% and mortality rate 5-10% for buffalo |
RESULTS AND DISCUSSION
Beef importation cost: Under the scenario 3, beef importation cost (BIC) is expected to decrease from RM241 million in 1997 to RM194 in 2011. It will be dropped in 2012 (Fig. 1) due to beef production is expected to increase from 12 thousand metric tonnes in 1997 to 127 thousand metric tonnes in 2011 (Table 1) but under 1, 2, 4 and 5 scenario BIC is expected to be increased rather than decreased.
Female breeding stock importation cost (FBSIC): Table 1 shows no FBSIC in the case of scenario 1. Scenario 2 and 3 show the same investment cost for FBS. It is greater in scenario 4 than scenario 5. In case of scenario 3, FBSIC will be increased from RM 19 million in 1997 to RM 284 million in 2011.
Total government investment cost for importation (TGICI): Scenario 3 shows the lowest TGICI in 2011. It is expected to increase RM 260 million in 1997 to RM 478 million in 2011 (Table 1). Table 2 shows the lowest BIC (RM 194 million) found in 2011 that is why, the TGICI also the lowest (RM 478 million). There will be no BIC in 2012 due to the impact of sufficient beef production, it indicates 100% beef self-sufficiency can possible.
| Table 1: | Investment cost of importation for beef production in Peninsular Malaysia (RM Million) |
(Note: BI1/BI2/BI3/BI4/BI5 = Beef import cost under scenario 1, 2, 3, 4, 5, respectively TI1/TI2/TI3/TI4/TI5 = Total (beef + FBS) import cost under scenario 1, 2, 3, 4, 5, respectively FBI2/3/FBI4/FBI5 = FBS import cost under scenario 2/3, 4, 5, respectively) | |
| Table 2: | Government investment cost of importation in 2011 and 2012 (RM Million) |
| Table 3: | Total cost and total benefit for beef production under different Management strategies in Peninsular Malaysia (RM Million) |
| Table 4: | The Values of BCR and NPW for Beef Production |
Cost and benefit of beef production: Total cost will be the highest in the case of 5-7% slaughter rate of FBS under scenario 3 due to the rearing cost of highest beef population. FBS importation cost and production cost, the benefit will be the highest for the highest beef animal population and beef production compared to scenario 1, 2, 4 and 5 (Table 3). In Table 4, the result of BCR (1.96) and positive NPW show that beef production can be increased economically and 100% self-sufficiency can be achieved in the period 2011-2012 at lowest government investment cost for importation whereas scenario 1, 2, 4 and 5, the negative NPW, less than 1 BCR and 17, 25, 15 and 14% self-sufficiency rate respectively indicates that these are not economically accepted due to lower calving rate and female breeding stock importation and higher slaughter rate under different management strategies.
| Fig. 1: | Ex-ante simulation analysis for beef import cost in peninsular Malaysia, RM million, 1997-2015, all scenarios |
This study has discussed that in order to maintain the lowest government investment cost for beef importation. That is why, the rate of mortality, slaughter will have to be reduced and the rates of calving will have to be increased.