Feed and Breed Choice: Preliminary Results from uptake analysis

Presentation by Nguyen Ngoc Toan, PhD

Research Officer, ILRI - Hanoi

Fortuna Hotel

April 7th, 2009

Introduction

• Background: This is one of the studies under Objective 2 of the project, characterizing pig producers selling in different priced markets.

• Purpose: Exploring the drivers of producers’ choice with respect to breed and feed.

• Approach: Empirical, incorporating simple statistics and econometric analysis (discrete choice frameworks)

• Data: Survey of 1051 households in six provinces of Phu Tho, Ha Tay, Nghe An, Daklak, Dong Nai and Tien Giang, of which 700 are producers.

Hypotheses on the choice of breed and feed

• Breed choice is influenced by:– Demographic, geographic and human capital characteristics– Agricultural land and assets owned and income– Access to suppliers/markets and services– Production system and scale of production

• Feed choice is influenced by:– Demographic, geographic and human capital characteristics– Agricultural land and assets owned and income– Access to suppliers/markets and services– Production system and scale of production– The choice of breed (local, exotic or cross-improved)

Methodology: Simulating households’ decision-making process: A two-stage

procedure

• Stage 1: Raising pigs or not? Characterizing producers vs. non-producers– Assumed to depends on households’ demographic,

geographic and human capital characteristics and possession of resources.

– Modeled as a dichotomous choice problem in a probit framework.

• Stage 2: Which breed and feed system to adopt?– The choice of local breed is modeled as a binary

choice problem in a logit framework.– The choice of feed is modeled as a multiple choice

problem in a multinomial logit framework.

Producers vs. Non-producers: Simple statistics (1)

Variables

Producers (700)

Non Producers

(351)

Pr

Mean Std Mean Std t-test Chi2test

Household size* 4.7 1.64 4.1 1.77 0.0000 0.000

Age of household head (log) 3.9 0.23 3.9 0.40 0.2775 0.077

Level of education (combined household head and spouse)* 14.27 6.08 13.19 6,82 0.0097 0.022

Level of professional training (combined household head and spouse)* 2.42 1.49 2.75 2.33 0.0067 0.014

Dependency ratio* 0.36 0.24 0.43 0.31 0.0000 0.000

Size of agricultural land owned (hecta)* 0.38 0.53 0.27 0.41 0.0007 0.573

Share of household income from crop production* 37 26.72 30 29.75 0.0002 0.732

Share of household income fron non-agricultural production 11 22.53 11 25.62 0.9867 0.856

Non-livestock income per capita (mil VND) 6.22 5.77 6.69 7.95 0.2615 0.580

Producers vs. Non-producers: Simple statistics (2)

Variabels

Producers (700) Non-producers (351)

pr

Frequency % Frequency % t-test Chi2test

Gender of household head (male=1)

584 83.43 281 80.06 0.1771 0.177

If there are HH members receiving wages/salary*

680 97.14 324 92.31 0.0003 0.000

Ethnicity of household head (Kinh & Hoa =0, others=1)

56 8 31 8.83 0.6447 0.644

Living in urban area (=1) 249 35.57 124 35.53 0.9380 0.938

Raising pigs or not? The factors that drive decision

Variable Influence

Household size +

Level of education (combined household

head and spouse)

+

Level of professional training (combined

household head and spouse)

-

Dependency Ratio -

If there are HH members receiving

wages/salary

-

Size of agricultural land owned +

Share of household income from crop +

Non-livestock income per capita -

Which breed to adopt? Factors that drive the choice of local

breedVariable Influence

Gender of household head (male=1) -

Level of professional training (combined household head and spouse) -

Total value of assets owned -

Living in urban areas -

Living in southern provinces (Tien Giang and Dong Nai=1) -

Engage in farrow to wean production system +

Scale of pig production (categorical: 1=small, 2=medium, 3=large) -

Has access to extension service +

Which feed system to adopt? Mixed feed as base category

Traditional feed Industrial feed

Variables Influence Variables Influence

Household size + Living in urban areas +

Having household members receiving wages/salary

- Living in the southern

provinces (Tien Giang or Dong Nai=1)

+

Dependency Ratio - Having regular feed suppliers +

Share of income from crop production

+ Engaged in farrow to wean

production -

Living in the southern provinces (Tien Giang or

Dong Nai=1) -

Scale of production (categorical: 1=small; 2=medium; 3=large)

+

Having regular feed suppliers

- Has feed supply contract (formal and/or informal)

-

Distance from (traditional) feed source

-

Engaged in farrow to wean production

+

Scale of production (categorical: 1=small; 2=medium; 3=large)

-

Has access to extension service

-

Implications (1)

• Higher-yielding technologies (e.g. improved breed & feed):– Associated with larger scale of production.– Probably beyond the reach of poorer, smaller-scale producers.

• There are still potential market opportunities for smallholder producers: e.g. local breed piglet production

• The shift to higher-value market chains ultimately require:– Changes in the choice of breed toward improved, higher-yielding

genotypes.– Changes in the choice of feed used to optimize the potential of

higher-yielding breeds.– Reduce transition cost of accessing these critical inputs and

extension and other services

Implications (2): Intervention Strategy

• General guidelines:– Must be context specific.– Enhancing access to appropriate inputs and services as

required by specific production conditions.

• Immediate focus:– Must be targeted two types of pig producers.– Easing the transition of smallholder producers to the

state where they are able to effectively engage in modern supply chains of pork.

– Ensuring producers at the lower end of small-scale spectrum of opportunities to embark on modernization pathway or seek for other livelihood options.

International Livestock Research InstituteBetter lives through livestock

Animal agriculture to reduce poverty, hunger and environmental degradation in developing countries

Nguyen Ngoc Toan, PhDResearch Officer/Quantitative Analyst

ILRI - Hanoi www.ilri.org

(e-mail: n.toan@cgiar.org )