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Impact Analysis of Beef Cattle Agribusiness on Income: a Double Difference Approach

P. K. Sarma
Senior Scientific Officer
Bangladesh Agricultural University Research System (BAURES), Bangladesh Agricultural University, Mymensingh-2202, Bangladesh

H. Jørgensen
Denmark

Abstract/ Executive Summary:

This study examined the impact on income of small-scale beef cattle enterprise in Pabna and Sirajganj districts. Data were obtained from 180 cattle fattening participant farmers and 180 non participant farmers from two areas in January and December 2014. Data were collected through the use of structured survey schedules and analyzed by the use of descriptive statistical tools such as means and percentages and also paired t-statistics and chow test were used for the data analysis The Double-Difference (DD) estimator is used to estimate changes in income from before to after benefiting from beef cattle agribusiness between participant farmers and non-participant farmers. Result shows that the net farm income of beef cattle agribusiness entrepreneur increases from BDT 6791.17 before participant to BDT 10289.65 after participant of cattle fattening. There was also an increase in the net farm income of the non-participant farmers from BDT 6750.01to BDT 8437.51during beef cattle agribusiness study. On the average, the net farm income of participant farmers increased by about 51.52% and non-participant increased by only 25.0%. The mean increased income was significantly different between participants and non-participant farmers of beef cattle fattening at 10% level of significance. Chow test analysis showed a significant change between the coefficients and intercept of the respondents’ income implying that beef cattle agribusiness contributed positively to the increased income realized by the farmers over that of non-farmers. Hence, it can be conducted that beef cattle agribusiness has impacted positively on the income of the farmers. The study recommends intensive support services of government and non government institutions should be vigorously implemented so as to improve the performance of the beef cattle agribusiness.

Keywords: Impact, Beef, cattle, Agribusiness, Double difference method, Income

Location: Pabna and Sirajganj

Start Date: 00-01-2014

End Date: 00-12-2014

Program Area: Socio-economic and Policy

Non-commodity: Income generation

Objectives:

i) To examine the income of participant and non-participant farmers of beef cattle agribusiness

ii) To identify the impact on income of beef cattle agribusiness in the study area

Methodology:

The study was carried out Shatia upazila of Pabna and Raigonj upazila of Sirajganj districts of Bangladesh. Multistage sampling technique involving three stages was employed in the selection of the respondents used for this study. The first stage involved purposive selection of one upazila each from the two districts because it has plenty of indigenous beef cattle. Moreover, the income of the majority of farmers depends on livestock. The area has also some fattening agribusiness and a lot of crop residuals and by-products useful for feeding and fattening the cattle. The next stage was purposive selection of two groups each from the two selected upazila based on the intensity of cattle fattening activities. The final stage involved the convince selection of farmers participant and non-participants of beef cattle agribusiness. The selection of these respondents was assisted by the list of other participants and non participant farmers given by the local NGOs (BASA) and Pabna meat processing company. The sample size was 360 comprising 180 participants of beef cattle agribusiness and 180 non-participants and data collection period was January to December 2014 of the study. A double different method was used to analyzed the data in the study.

Source of Information: J. Bangladesh Agril. Univ. 13(1): 109–115, 2015 ISSN 1810-3030

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

Beef cattle value chains of Northern Bangladesh were greatly influenced by scale of production with cattle from large scale producers going through cattle fattening and with fewer actors than cattle from small scale producers. Beef cattle based economic activity is considered to have a promising prospect in the future. North Bengal of Bangladesh is potential area for development of beef cattle agribusiness as it has potential resources including land availability, feed animal population, human resources, and demand of animal products. Demands of beef come from both local and inter-main land markets. From the findings of the study, it has been positive impact on income of the participant farmers increased significantly more than before the beef cattle agribusiness and also more than the non-participant farmers’ income. Double difference analysis result further proved the fact that the increase in income realized by the participant farmers was attributed to their participation in beef cattle agribusiness based on the positive mean income value obtained which was significant at 10 % level of probability. The Chow test analysis shows that there was inequality and heterogeneity in the coefficients and slope respectively between participant farmers and non-participant farmers’ income function. Hence the null hypothesis is rejected. Based on the findings drawn from this study the following underlying recommendations are made for improvement of beef cattle agribusiness. The study recommends intensive advisory services by the government of Bangladesh on resource allocation and utilization and other means of increasing farmers’ participant income further. Support services should be based on participatory rural appraisal in identification of beef cattle agribusiness problems and come up with solutions based on market demand. From a careful analysis of the impact of the beef cattle sub-sector in study areas, researcher recommends the following areas of intervention for improving beef cattle agribusiness:

(i) Adopt a value chain approach in development of the beef cattle sub-sector, (ii) Address information gaps for effective planning and monitoring of performance, (iii) Develop programs for increased productivity of the livestock sector

o Create awareness on the causes of low productivity and implications on overall returns

o Improve delivery of animal health and animal production services among farmers.

o Improve farmer acquisition of high quality breeds

(iv) Explore entry points for introduction of commercial livestock production

(v) Capacity building of the beef cattle entrepreneur

o Improve access to business support services

o Support development of infrastructure for processing of livestock products and by-products

Knowledge Management: Journal