Feed and Breed Choice: Preliminary Results from uptake analysis Presentation by Nguyen Ngoc Toan, PhD Research Officer, ILRI - Hanoi Fortuna Hotel April 7 th, 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)

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

Raising pigs or not? The factors that drive decision

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

Which feed system to adopt? Mixed feed as base category

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 Institute Better lives through livestock Animal agriculture to reduce poverty, hunger and environmental degradation in developing countries Nguyen Ngoc Toan, PhD Research Officer/Quantitative Analyst ILRI - Hanoi ( )