Abstract: The results of the study indicate that for goat female breeding/adult is an important factor that determines the number of goat population and kid born is the most important factor determine total revenue. Kid born is highly elastic factor. For total cost, feed cost is an elastic factor related with goat population, if goat increases feed cost would increase. Mainly for that reason profit of the farm going less. However, results suggest, profitability of the farm depend on lower total cost of goat rearing and higher revenues from the farm.
INTRODUCTION
The goat industry is one of the most important industries for meat production and for alleviating poverty. Though goat industry is profitable but not in better condition due to higher rearing cost, lack of proper management, insufficient health care, marketing facilities etc. Different factors are affecting the goat rearing system. Sarmin (1998) developed an econometric model for analyzing the important factors and their linkages relating to beef animal development, the supply of beef animals for slaughter and the demand for beef. The previous number of female less than 3 years old, males more than 3 years and beef price are important determinants for beef production in Malaysia.
In Colavito (2001), econometric model were developed to test the impact of BLRI research expenditure and technologies on livestock sector output and Nagy and Ferdous (2000) also showed the highest general returns to livestock research in Bangladesh. Chowdhury et al. (2001, 2002) in the breeding farm at BLRIGRF did not analyze the econometric model, even no body analyzed goat rearing econometrically in Bangladesh. So there is a need to develop an econometric model on goat rearing system with the following objectives:
| • | to identify the factors affecting the goat revenues of goat rearing system for the study period at BLRIGRF. |
| • | to identify the factors affecting the goat costs of goat rearing system for the study period at BLRIGRF. |
| • | to identify the factors affecting the profitability of goat rearing system for the study period at BLRIGRF. |
MATERIALS AND METHODS
This study was conducted at Bangladesh Livestock Research Institute Goat Research Farm (BLRIGRF) from July 2001 to June 2002 to analyze the profitability of Black Bengal Goat (BBG) under semi-intensive rearing system. The present study entirely based on BLRIGRF’s monthly records on goat population, production and various costs of goat rearing. On the basis of “Goodness of fit”, Simultaneous equations were fitted to population, production, cost, revenues and profit of goat rearing over the months. The econometric model specified for this study consisting the inventory model and profit model. Two Stage Least Square (TSLS) method has been used for the econometric analysis (Gujrati, 1995).
Model specification
Simultaneous equations:
| TGPOP | = | f (SL, DH, KB, FA, MAL, TA, TK) |
| TP | = | f (TR,TC, KR) |
| TR | = | f (KB, MT, MK, MN, SK, TGPOP) |
| TC | = | f (FC, LC, EC, MC, SC, TGPOP) |
(Note: TGPOP=Total Goat Population, SL= Slaughter, DH=Death, KB= Kid Born, FA=Female Adult, MA= Male Adult, TA=Total Adult, TK=Total Kid, TP=Total Profit, TR=Total Revenues, TC=Total Cost, MT=Meat, MK=Milk, MN=Manure, SK=Skin, FC= Feed Cost, LC=Labour Cost, EC=Equipment Cost, MC=Medical Cost, SC=Slaughter Cost, DL=Death Loss).
Specification of the model: Goat rearing involves a complex biological process, is determined by the type of animal, feed given management and environmental influences. The life cycle of goat consisting of kids, buck, castrated goat, doe. Slaughter goat mainly comes from castrated goat. Young females are largely used for replacement. The number of female breeding goat is very important in determining the number of animals at a particular period. This is because female breeding animal determine the number of kids produced. The number of buck to be kept for breeding purposes and the number of doe and castrated goat for replacement and for slaughter respectively. The other factors that are important in number of animals at a particular time include the expected revenue of the goat at appropriate cost level. Two physical components have been shown to involve goat life cycle and goat production. Financial component has shown to involve management decision. The monthly data were then analyzed in accordance with the objectives of the study. In analyzing data econometric technique was followed.
RESULTS AND DISCUSSION
This chapter discussed whole econometric model for BLRIGRF into 3 groups. Group A: Goat Population, Group B: Annual cost and revenue of goat farming, Group C: Profitability of a goat rearing.
Group A: Goat population
Total goat population (TGPOP): Total goat population included female/male adult, female/male kids, died and slaughter goats.
| Table 1: | The estimated coefficients of the simultaneous equations for total goat Population (Instrument list: TGPOP SL DH FA MAL TA TK TR TC TP KB KR MT MK MN SK FC LC MC DL EC) |
| *Significant at 1% ** Highly Significant | |
| Table 2: | The estimated coefficients of the simultaneous equations for total revenue (Instrument list: TGPOP SL DH FA MAL TA TK TR TC TP KB KR MT MK MN SK FC LC MC DL EC) |
| *Highly Significant | |
| Table 3: | The estimated coefficients of the simultaneous equations for total cost (Instrument list: TGPOP SL DH FA MAL TA TK TR TC TP KB KR MT MK MN SK FC LC MC DL EC) |
| *Significant at 1% | |
The responses of the dependent variable are positive for the following explanatory variables: total adult goats and total kids. Negative response was observed for the male adult. The estimated coefficients that are significant at 1% level are: total adult goats (TA) and total kids (TK). The magnitude of the responses made by the dependent variables toward these respective explanatory variables is 1.218190 and 1.003784.The results indicate that the total adult goat and total kids are the most important factors in determining goat inventory size. Every unit increase in total adult goat factor will increase total goat population by 1.218190 unit. Mainly female adult increases total goat population by producing kids. Every unit increase in total kids factor will increase total goat population by 1.003784 unit but castrated goat (MAL) reduces total goat population. Result suggests that the mortality rate should be reduced by vaccination to increase the number goat population.
The total goat population equation can be explained by the explanatory variables at a 99% level is indicated by the goodness of fit R2 of 0.987002. The autocorrelation bias of the equation is in the acceptable region as indicated by the values of the Durbin-Watson is 1.137511. Table 1 shows the estimated coefficients of the total goat population.
Group B: Cost and revenue of goat farming
Revenue: Total revenue (TR) included meat (MT), milk (MK), manure (MN), skin (SK) and kid born (KB).
Total revenue: The responses of the dependent variable are positive for all above explanatory variables: Negative response was not observed for any variable but estimated coefficients that are significant at higher than 5% level are: kid revenue (KR), meat (MT) and milk (MK). The magnitude of the responses made by these dependent variables toward these respective explanatory variables is 1.061436, 1.018329 and 0.701193, respectively.
| Table 4: | The estimated coefficients of the simultaneous equations for total profit. (Instrument list: TGPOP SL DH FA MAL TA TK TR TC TP KB KR MT MK MN SK FC LC MC DL EC) |
| *Significant at 1% | |
The results indicate that the kid born factor is the most important factor in determining total revenue. Every unit increase in kid factor will increase total revenue by 1.06436 unit. Mainly the production of kid increases total revenue of total goat rearing i.e. kid born is highly elastic factor. Result suggests that reproduction efficiency should be developed through selective breeding for the highest revenue. The explanatory variable at a 99% level is indicated by the goodness of fit R2 of 0.998572 (Table 2).
Cost: Feed cost (FC), labour cost (LC), medical cost (MC), equipment cost (EC), slaughter process cost (SC) and death loss (DL) were used as total cost (TC).
Total cost: The total cost equation explained by the explanatory variables at a 96% level is indicated by the goodness of fit R2 of 0.959228. The autocorrelation bias of the equation is in the acceptable region as indicated by the values of the Durbin-Watson is 2.957762. Table 3 shows the estimated coefficients of the total cost.
The responses of the dependent variable are positive for all above explanatory variables: Negative response was not observed for any variable but estimated coefficients that are significant at 1% level are: feed cost (FC), labour cost (LC), equipment cost (EC), medical cost (MC) and death loss (DL). The magnitude of the responses made by the dependent variables toward these respective explanatory variables is 1.016331, 1.028272, 0.91577, 1.136711 and 0.994110, respectively.
The results indicate that the feed, labour and medical cost (elastic factors) are the most important factors in determining total cost. Every unit increase in feed cost factor will increase total cost by 1.3462 unit. Every unit increase in labour cost factor will increase total cost by 1.028272 unit. Every unit increase in medical cost factor will increase total cost by 1.13711 unit. Result suggests to less the total cost.
Group C: Profitability of goat rearing
Total profit: The total profit equation can be explained by the explanatory variables at a 92% level is indicated by the goodness of fit R2 of 0.922831. The autocorrelation biases of the equation are in the acceptable region as indicated by the values of the Durbin-Watson is 2.74. Table 4 shows the estimated coefficients of the total profit.
The response of the dependent variable is positive for total revenue (TR) and kid born (KB) and negative for total cost (TC). The estimated coefficients that are significant at 1% level are: total revenue (TR) and total cost (TC). The magnitude of the responses made by the dependent variables toward these respective explanatory variables is 0.686092 and –1.55345. The results indicate that the total cost and total revenue are the most important factors in determining total profit of goat rearing.
Mainly total revenue increase total profit. Though total profit increases for total revenue but decreases for total cost. Every unit increase in total revenue (inelastic factor) increases total profit by 0.686092 but every unit increase in total cost (elastic factor) reduces total profit by 1.553452 unit. On the other hand, every unit increase in kid born increases total profit by 1.1798 unit, indicates the important elastic factor but not significantly at BLRIGRF due to increasing total cost for increasing number of goats and also for kid mortality. Result suggests that total cost (elastic factor) should be reduced to increase the amount of total profit from semi-intensive goat rearing system at BLRIGRF.
This study developed an econometric model on the profitability of goat rearing system at BLRIGRF under selective breeding program. The effects of goat population expansion on cost-revenue of goat rearing system explained in terms of profit. Results show goat
population at BLRIGRF has increased from July’01 to June’02 consequently profit has increased but results suggest that the total cost, a most affecting factor. On the major findings of the study it may be concluded that a goat rearing is a profitable program shows direct positive impact on profitability of goat rearing system. From this analysis, the econometric model formed is able to represent the goats rearing farm and can be used for policy analysis and other studies.