LSIRD NAPLIO CONFERENCE POSTERS

Julian Smith, Kate Corcoran, and Barry Dent

The focus of the socio-economic research section of the European Cashmere Project is to examine how cashmere goat production might provide a diversification option for farmers in the more peripheral or Less Favoured Areas (LFA) of the Community. Successful production in these areas revolves predominantly around livestock enterprises. However, profitability of current LFA sheep systems is questionable in the absence of support, with over three quarters of current farm gross margin coming by way of subsidies in Scotland. Hill farmers are given support for their breeding ewe enterprises in the form of the Hill Livestock Compensatory Allowance (HLCA) and the Sheep Annual Premium (SAP). At present no subsidy support is paid on breeding goats in northern Europe while subsidy is received in southern European countries, excluding mainland France, at 90% of the rate paid on breeding ewes. Cashmere goats have similar husbandry requirements to hill sheep.

Mathematical modelling was used to examine the economic competitiveness of cashmere goats as a farm enterprise activity. The linear programming technique permits optimal allocations of scarce resources to a range of competing activities.

The model was initially set up for a specialist hill sheep farm in the Highlands of Scotland on severely disadvantaged LFA land. In this case, the sheep attract the maximum subsidy per capita (HLCA - £6.39 and SAP - £25.35 per year). An average farm size was chosen of 800ha; comprising 780ha of rough grazing (RG), 15ha of improved grassland (IMP) and 5ha of inbye grazings (INB). The differing land types provided the carrying capacity resource to the model. (0.5 sheep/ha on RG, 5 sh/ha on IMP and 15 sh/ha on INB). Each mature ewe needs 1 unit of carrying capacity; lambs, 0.7; goats, 0.8; and kids, 0.56.

The activities can be divided into four main categories: goat related; sheep related; fibre related; general farming activities. The livestock were further dis-aggregated by sex and age classes. At each stage mortality losses were accounted for. Lambs were used for replacement or sold for meat/breeding stock. Each age class of animal produces specific wool or fibre output. It was considered important to keep shearing and combing as separate activities because of the different skills, technology and price which each activity demanded and commanded.

It has been widely reported that goats can have a beneficial effect on grazings. Goats graze different pasture components than sheep. To represent this, 1 goat was allowed for every 20 sheep in a combined activity. These goats do not deplete the sheep grazing resources but do provide returns in the form of meat and fibre production.

Each animal kept had some requirement for supplemental feeding. The livestock were given a range of supplemental feed: hay, sugar beet pulp, sheep concentrate, goat concentrate, and feed blocks. Most of these feeds had to be bought from off-farm suppliers. Hay could be made on the farm by using up the land resource.

Labour resources are provided by the farmer, spouse and family, or hired in. It was estimated that a full time farmer would have 2000 hours of time to allocate to the enterprise activities; spouse provides 1000 hours; and the family provide 500 hours. These hours were allocated between shearing, combing, shepherding, lambing/kidding, and general farm activities. The time required for each of these was calculated per head of livestock and included in the model. Other activities, such as hay making, were allocated hours from the available labour resources.

The objective function was set up to maximise the returns to the farm. Once the model had been run with zero goat subsidy and to explore the effects of increasing subsidy support for goats, incremental amounts of goat subsidy were used and the model re-run. The level of necessary increase in subsidy before the optimal activity mix will be changed is shown in the sensitivity analysis provided by the LP solver. This was used to determine the amount of increase in subsidy at each stage of the iteration. This process was repeated up to the point at which goat activities completely replace sheep activities.

The model has been designed such that data from other locations in Europe can easily be entered and comparisons made, highlighting the diversity of farming and socio-economic situations throughout the EU. Data are currently being analysed from Spain and information from Greece will be collected.

Analysis of the results from the model show that as the level of support for goats increases, goat activities become increasingly competitive with those related to sheep. This substitution reflects the fact that goats have a lesser impact on the carrying capacity resource of the land. However, returns from the goat enterprise in the absence of subsidy can not compete with the level of sheep support, which account for about 70% of the overall gross margin per head of sheep. If the model is run with zero subsidy for both sheep and goats, the modelled farm enterprise mix consists entirely of goat activities.

Institute of Ecology and Resource Management, University of Edinburgh, Edinburgh, EH9 3JG