Socio-economic evaluation of supervised cattle distribution under coconuts in the Philippines

• Bureau of Animal Industry, Philippines

In the late 1990s a scheme in Luzon, Philippines, commenced distribution of high-grade Braham heifers imported from Australia to smallholders with at least 1 hectare of land under coconuts and potential for 0.5 ha of improved pasture. The Philippine Bureau of Animal Industry (BAI) designed the 'supervised cattle distribution program' on the basis of many years of experience and experimentation with livestock distribution programs. The scheme appeared to work well, and after two years' trial the BAI contacted ACIAR to gain assistance with its evaluation.

The program was popular with smallholders and appeared to have potential for expansion and hence increased production and welfare benefits, and possibly increased live cattle imports from Australia. However, some benefits of livestock ownership are difficult to quantify (particularly non-production benefits), and factors such as the relationship between criteria for selection of recipients, contractual arrangements and livestock performance required further examination if the program was to be expanded.

This project was designed to carry out a socio-economic evaluation of the BAI-supervised cattle distribution project (SCDP), taking into account both production and non-production (non-market) benefits. An additional component was added, to provide an economic evaluation of the two major national programs-the Multi-Livestock Development Loan Program (MLDLP), and the Barangay Livestock Breeding Loan Program (BLBLP) (of which the SCDP is a subprogram)-based on data collected from two regions in the Philippines.

The research approach involved a combination of financial modelling, information collection and planning through workshops with livestock officers, data collection through landholder surveys, and application of non-market valuation techniques. The researchers conducted three workshops. They also undertook two major surveys of beneficiaries in the three livestock dispersal programs-the first survey provided baseline data, while the second provided input to the specific evaluations of cattle dispersal under the three programs. A form of conjoint analysis was used to estimate non-production (or non-market) benefits of livestock distribution.
The researchers also conducted a number of capacity-building activities. The major component of these was training of officers of the BAI and others in carrying out interview surveys, and providing practical experience as part of the survey team. Some training was provided in the use of the Statistical Package for the Social Sciences (SPSS).

Recipients under the supervised cattle distribution program and other livestock dispersal programs were found typically to enjoy benefits over and above those that can be measured through the observation of financial transactions related to the program. Numerous discussions with farmer beneficiaries indicated that they enjoy higher levels of self-esteem, increased financial security through the ownership of a large valuable animal, higher levels of personal fulfilment, and increased efficiency through the utilisation of previously wasted resources such as weeds and crop residues, as well as more efficient use of labour.
A preliminary financial analysis revealed that for the individual beneficiary under the BAI supervised cattle distribution program, financial performance was marginal to unprofitable. In other words, the justification for the program must rest with the above non-production benefits.
The baseline survey provided a large set of data about physical and financial performance of farm and of the livestock enterprise. Overall calving rates and intercalving intervals were relatively low, suggesting problems in breeding management or breeder quality, but overall farmer recipients of cows displayed a high satisfaction level with the program.
A social cost:benefit analysis indicated that the program is justifiable on developmental grounds, although socio-economic performance of the programs was constrained by poor breeding performance of the distributed cattle. The researchers identified various risk factors in livestock dispersal, and developed a number of suggestions for improving program design. Also, a proposal for a new cattle distribution program was developed.
It would appear that livestock dispersal in the Philippines is unlikely to expand to any major degree from recent levels, and that imports to the Philippines of live cattle from Australia will continue to be opportunistic in nature, depending on world meat and hence live animal prices. Periods of very high live cattle prices drive feedlot operators in the Philippines out of business, and when prices fall there is likely to be a time delay in trade recovery as feedlot operators re-establish.