a value chain analysis of the meat sector in pakistan
TRANSCRIPT
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A Value Chain Analysis of the Meat Sector in Pakistan
By
Muhammad Sharif
Zafar Altaf
Hassnain Shah
Nadeem Akmal
Arifa-un-Nisa Naqvi
National Agricultural Research Centre
Social Sciences Institute
Islamabad
November, 2009
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Table of ContentsPages
1. Introduction 1
2. Objectives of the Study 2
3. Methodology 2
The Value Chain Analysis (VCA) Model 24. Organization of the Report 3
5. Overview of Red Meat Sub-Sector 4
Inventory of Milk and Meat Animals 4
Beef and Mutton Animals 4
Characteristics of Meat Sub-Sector 5
6. Meat Supply Chain 7
7. Red Meat Value Chain 9
Input Provision/Supplies --- 1stSegment of Value Chain 10
Feed 10
Pasture resources 12
Veterinary services 12
Seed stock (Genetics/breeds) 13
Conclusions 13
7.2 Meat Animal Production --- 2n
Segment of Value Chain 15
7.2.1 Inventory of meat animals 15
7.2.2 Cost of production of meat animals at farm level 16
7.2.3 Cost of production of meat animals (general farmers) 16
7.2.3.1Cost of production of beef animal 16
7.2.3.2Cost of production of mutton animals 17
7.2.4 Cost of production of beef animals at feed lot framers 18
7.2.4.1Cost of production of beef animals 187.2.4.2Cost of production of mutton animals 18
7.3 Conclusions 19
8. Marketing of Meat Animals ---3r Segment of Meat Value Chain 21
8.1 Market Infrastructure 21
8.2 Live Animals Market Intermediaries 22
8.3 Conclusions 23
9. Processing (Slaughtering) ---- 4t Segment of Meat Value Chain 23
Animals for Slaughtering 23
The Slaughtering System 26
Red Meat Production 26
Trends in Red Meat Production 27Cost of Production of Meat 28
9.5.1 Cost of production of mutton 29
9.5.2 Cost of production of beef at feed lot framers 29
9.5.2.1Cost of production of beef 29
9.5.2.2Cost of production of mutton 30
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Conclusions 31
10. Meat Marketing ---- 5thSegment of Meat Value Chain 33
Marketing of Red Meat 33
Meat Marketing in Domestic Market 33
Meat Marketing Infrastructure 34
Transportation of Meat 34Market Information and Pricing Mechanism 34
Structure of Meat Marketing Cost for Market Intermediaries 35
Sale Price, Marketing Cost and Net Profit Margins of MarketIntermediaries
36
Meat Consumption (per capita consumption) 37
Meat Marketing for Export Markets 37
Revealed Comparative Advantages for Meat Export 39
Conclusion 39
11. The SWOT Approach for Meat Value Chain 41
11.1 Strengths 41
11.2 Weaknesses 4111.3 Opportunities 42
11.4 Threats 42
12. Proposed Action Plan for Meat Value Chain 43
13. Summary and Conclusions 44
14. References 47
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List of TablesPages
Table 1: Inventory of milk and meat animals during 1996, 2006 & 2009 4
Table 2: Classification of number of animals slaughtered in recognized and non-recognized slaughter houses during 2006 and 2009
5
Table 3: Key characteristics of meat sub-sector, 2008-09 6Table 4: Comparative status of livestock inventory and fodder as well as concentrateavailability for livestock census years
11
Table 5: Area of rangelands in Pakistan, 1988 12
Table 6: Status of rangeland in Pakistan during 1988 12
Table 7: Livestock veterinary services 12
Table 8: Animal Genetic Resources of Pakistan 13
Table 9: Livestock inventory and gross value 2008-09 15
Table 10: Cost of production of beef animal 17
Table 11: Cost of production of mutton animals 17
Table 12: Cost of production of beef animals at feed lot farms 18
Table 13: Cost of production of mutton animals 19
Table 14: Total number of animals slaughtered and value 2008-09 23
Table 15. Red meat (beef and mutton) production 2008-09 27
Table 16: Trends in production of meat and annual growth rate 27
Table 17: Cost of production of beef 28
Table 18: Cost of production of mutton 29
Table 19: Cost of production of beef at feed lot farms 30
Table 20: Cost of production of mutton 31
Table 21: Structure of marketing cost for Contractor/Beopari 35
Table 22: Structure of marketing cost for commission agent 35
Table 23: Structure of marketing cost for Butcher/Retailer 36Table 24: Sale price at different market intermediaries 36
Table 25: Marketing costs of producers and other market intermediaries 36
Table 26: Net profit margin of market intermediaries 37
Table 27: Meat per capita consumption Kg/Annum 37
Table 28: Quantity and value of meat export from Pakistan from 2000-2007 38
Table 29: Synthetic RCA measures: Regional perspective 39
Table 30: Proposed action plan for meat value chain 43
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List of FiguresPages
Figure 1: Capital Flow 3
Figure 2: Supply Chain for Red Meat 8
Figure 3: Red Meat Value Chain in Pakistan, 2008-09 10
Figure 4: Red Meat Value Chain: Inputs 1stSegment of Meat Value Chain 11Figure 5: Summary of Inputs 1
stsegment of meat value chain 14
Figure 6: Meat Animals Production 2stSegment of Meat Value Chain 16
Figure 7: Summary of Production 2n
Segment of Meat Value Chain 20
Figure 8: MeatAnimals Marketing 3r
Segment of Meat Value Chain 22
Figure 9: Summary of Live Animals Marketing 3r
Segment of Meat Value Chain 24
Figure 10: Processing (Slaughtering) 4t
Segment of Meat Value Chain 25
Figure 11: Trend of Red Meat Production 28
Figure 12: Summary of Processing (Slaughtering) 4t
Segment of Meat Value Chain 32
Figure 13: Meat Marketing 5 Segment of Meat Value Chain 33
Figure 14: Trend of Meat Export from Pakistan 38
Figure 15: Trend of Meat Export Value 38
Figure 16: Summary of Meat Marketing 5t
Segment of Meat Value Chain 40
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A Value Chain Analysis of the Meat Sector in Pakistan
1. Introduction
Livestock production in Pakistan is still more of a way of life rather than an industry. It is anintegral part of the rural economy contributing significantly to the agriculture (50%) and the
national (12%) GDPs. Livestock raising in Pakistan is primarily a subsistence activity and ischaracterized by small herds/flocks with widespread ownership over 8 million farmers, more
than one million of which are landless. It is also deeply integrated with crop production.
Livestock complement crop and grain production and are still a major source of fertilizer andcooking fuel. The contribution of draft power and farmyard manure to crop production is yet to
be fully quantified. As livestock are more evenly distributed than land and other assets, it forms
the main asset base that meets the dietary needs and provides income to the rural poor. Women
are deeply involved in almost all aspects of livestock farming (Hassnain and Khan, 2007).
The geographical marketing of the buffalo, cattle, goat and sheep populations within Pakistanindicates the regional importance of the red meat industry. Nearly 57 percent of the national
cattle and buffalo herd of 56.89 million head is located in Punjab, and the majority of Pakistans48 percent sheep and 22 percent goat are located in Balochistan. The marketing of livestock is
not even among different provinces as the Punjab province has about half (43%) of the livestock
inventory including cattle (49%), buffaloes (65%), sheep (24%), goats (37%) and others (47%).Balochistan harbours majority of sheep as this province alone has 48 % of the sheep population
of the country. Similar to cattle, sheep are also evenly distributed in rest of three provinces.
The major products of livestock are milk and meat which are an important source of animalprotein in human diet. Traditionally, beef and mutton are relatively more consumed as compared
to poultry meat and fish. The marketing of beef and mutton starts from slaughtering of animalsin the abattoirs and in the backyard of butchers meat shops. The meat shops usually deal onlyone type of meat, i.e. either beef or mutton.
Present exercise is aimed to contribute the process of value chain analysis (VCA) of red meat(beef and mutton) industry in Pakistan because it facilitates the identification of binding
constraints to growth and competitiveness and the effective targeting of institutional and
policy-related issues, at the sub-sector (meat), at the sector (livestock) and economy-wide
levels alike (FIAS, 2007).
VCA are sometimes stand-alone studies that provide direct inputs to government strategies.
For example, in Indonesia, the value chain analyses of selected sectors were key inputs for thegovernments export competitiveness strategy and are a good way to understand relationshipsand linkages among buyers, suppliers, and a range of market actors in between (FIAS, 2007). For
example, a coffee value chain links coffee producers to processors and multinational buyers at
one end of the chain, and to suppliers of inputs (such as fertilizer producers) at the other end.Many VCAs also incorporate the role of transportation, utility, and financial service providers,
among others. However, the focus on inter- and intra-industry and firm relationships - although
extremely useful in its own right - captures mainly market-related insights and often misses the
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policy and regulatory environment (e.g., taxes, licensing, standards, etc.) in which private firms
operate as well as policies and regulations often have a significant effect on firm-level
competitiveness and the performance of the chain. By explicitly synthesizing government policyissues with market relationships, the type of value chain analysis used in this report will help to
clarify which binding constraints to growth and competitiveness are affecting the firms that
comprise the meat industry in Pakistan (FIAS, 2007). This study also aimed to contribute to theprocess of linking rural industries and enterprises into the mainstream markets to harness thebenefit from the meat value chain. In addition to this study will also develop strategic linkages
with its targets livestock producers, market players and consumers in the country.
2. Objectives of the Study
The objectives of this research are as under: (i) to review the size and nature of meat
farming/industry; (ii) to discuss meat value chain emphasizing the role of key industry playersand the extent of their direct or indirect control on meat animal raising practices; (iii) to identify
key binding constraints to growth and competitiveness of the players in the meat industry for
their specific leverages, either through their linkages to meat industry or through their overallmarket position; (iv) to identify and compare the top players of meat value chain; and (v) to
suggest the institutional and policy measures at the sector and economy wide level.
3. Methodology
Maximum efforts were made to gather the relevant information and literature on meat value
chain from various government departments, academic, research and development institutions,ministries, offices of international organizations, NGOs and journal articles. After the extensive
review of the gathered literature, various stakeholders in the marketing chains, officials in
agricultural research institutions, agricultural universities, L&DD department and private sector
enterprises were consulted on plan for improvement of meat value chain in Pakistan.
Moreover, the farmers/producers and marketing intermediaries were also consulted in order to
get updated first hand information about meat value chain for validating and updating theinformation grasped from the literature reviewed. Overall, 16 secondary livestock markets (both
large and small ruminants) were visited. In meat marketing chain, 10 abattoirs, 40 butchers (both
urban and rural), and 20 consumers were consulted.
The problems and issues related to meat production and marketing inefficiencies were therefore
identified through this exercise and prepared proposed plan of action to improve this chain for
the national level.
3.1 The Value Chain Analysis (VCA) Model
VCA model emphasizes on the diverse interrelationships among market opportunities constraintsand directives at various levels of the supply chain and at different levels of influence, from
which specific value addition takes place. This feature of the VCA lends to its completeness, as a
strategic tool in exploring different alternative strategies for poverty reduction. The value chain
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analysis model used for this study adopted from Asean Foundation and Asia DHRRA (2008)
which is presented in Figure-1.
Source: Adopted from Asean Foundation and Asia DHRRA (2008)
VCA is a method for accounting and presenting the value that is created in a product or serviceas it is transformed from raw inputs to a final product consumed by end users and typically
involves identifying and mapping the relationships of four types of features: (i) the activities
performed during each stage of processing; (ii) the value of inputs, processing time, outputs and
value added; (iii) the spatial relationships, such as distance and logistics, of the activities; and,(iv) the structure of economic agents, such as suppliers, the producer, and the wholesaler (FIAS,
2007). Meat industry value chain approach introduced in this technical report relies on thetraditional market related context of value chain analysis in identifying failures in sourcing,manufacturing, and delivery and this approach is unique in recognizing the key public policy,
institutional and infrastructure factors underlying constraints in the meat business environment in
Pakistan. The policy and reform agenda that typically emerges from the value chain approachrelates to three core areas (i) Product market issues (e.g., trade policy, competition policy, price
distortions, subsidies, licensing, product standards, customs, logistics, property rights,
enforcement of regulations); (ii) Factor market i ssues (e.g., wages, capital charges, utility
market issues, labor market rigidities, land price, zoning); and (iii) Market related issues (e.g.,market diversification, research and development, product diversification, supplier linkages).
4. Organization of the Report
Structure of red meat farming/industry in Pakistan is discussed in section 2. An overview of beefand mutton industries are presented in the section 3. The value chain of beef and mutton
industries is examined in section 4. Economic actors and leverage are analyzed in section 5.
Key findings and conclusion in section 6 completes the report.
Policies Rules andRegulations
Infrastructure & Enterprise
Development Facilities
Research & Technology &
Institutional Services
Socioeconomic & Cultural
Consideration
Enabling environment
Input
Suppliers Producers
Processors Wholesalers Retailers Consumers
Exporters
Capital Flow
Information Flow
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5. Overview of Red Meat Sub-Sector5.1 Inventory of Milk and Meat Animals
In 2008-09, there were 33 million cattle (including both beef and dairy). Out of this, 4.6 million
heads were bullock, 7.2 million heads dry cows (beef cow) and 9.7 million heads in-milk cows.11.5 million heads were cow young stock. Likewise, there were about 30 million buffaloes
(including both beef and dairy). Out of this, 0.7 million heads were male buffaloes (beef animal),5.9 million heads dry buffaloes (beef animal) and 11.1 million heads in-milk buffaloes. Therewas 12.2 million heads of buffaloes young stock. Total sheep was 27.4 million heads. Out of
this, male sheep was 4.5 million heads (mutton animal) and female sheep was 14.2 million
heads. There was 8.7 million heads sheep young stock. Just more than 58 million heads of goatwas recorded for the year 2008-09. Out of this, 7.2 million heads was male goat (mutton animal)
and 38.8 million heads of female goat. There was 17.3 million heads goat young stock during
2008-09 (Table 1). The data given in the table revealed the positive significant growth in
livestock inventory from 1996 to 2006 and 2009 respectively.
Table 1: Inventory of milk and meat animals during 1996, 2006 & 2009
(M ill ion heads)Type of Animal Livestock Census Extrapolated*
1996 2006 2008-09
A. Milk and Meat Animals
(i) Total Cattle 20.4 29.6 33.0
Bullocks (3 years & above) 3.7 4.1 4.6
Cows (3 years & above) 10.0 15.2 16.9
In-milk cows 6.3 8.7 9.7
Youngstock (below 3 years) 6.7 10.3 11.5
Male 3.6 5.4 6.0
Female 3.2 4.9 5.5
(ii) Total Buffaloes 20.3 27.4 29.9
Male buffaloes (3 years & above) 0.4 0.6 0.7
Female buffaloes (3 years & above) 12.2 15.6 17.0In-milk buffaloes 7.8 10.2 11.1
Youngstock (below 3 years) 7.7 11.2 12.2
Male 3.3 4.7 5.1
Female 4.4 6.5 7.1
(iii) Total Sheep 23.5 26.5 27.4
Male (1 year & above) 3.4 4.4 4.5
Female (1 year & above) 13.3 13.7 14.2
Youngstock (below 1 year) 6.8 8.4 8.7
(iv) Total Goats 41.2 53.8 58.3
Male (1 year & above) 5.2 6.6 7.2
Female (1 year & above) 22.4 31.2 33.8
Youngstock (below 1 year) 13.6 16.0 17.3
Source: Pakistan Livestock Census, 2006
* Economic Survey 2008-09 and extrapolated using the proportion of 2006 census data
5.2 Beef and Mutton Animals
The information on meat (both beef and mutton) animals are estimated on the basis of number ofanimals slaughtered during 2006 using Agricultural Census Data and extrapolated for 2009 using
Economic Survey Data for the year 2008-09 and presented in Table 2. There were 24.493 million
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meat animals for the year 2008-09 in Pakistan. Among them, 3.7 million heads were beef animals
(cattle, buffaloes and camels) and 16.82 million heads were mutton animals (sheep and goat) during
the year 2008-09 in the country (Table 2).
Table 2: Classification of number of animals slaughtered in recognized and non-recognized
slaughter houses during 2006 and 2009
(Mill ion)Type ofAnimal
Number of Animals Slaughtered Outside Recognized Slaughter
Houses
Number of
Animals
Slaughtered
in Recognized
Slaughter
Houses
Total Number of
Animals
Slaughtered
Households
Reporting
Number of
Animals
Slaughtered
Rural/Urban
Butchers
Reporting
Number of
Animals
Slaughtered
2006 2009
1 2 3 4 5 6 7 8
Bullocks 1.104 0.301 0.002 0.17 0.422 0.893 1.002
Cow 2.038 0.636 0.003 0.31 0.45 1.396 1.552
YS male 0.332 0.135 0.004 0.403 0.337 0.874 0.971
YS Female 0.202 0.096 0.002 0.121 0.182 0.399 0.448
Male Buffalo 0.136 0.037 0.001 0.063 0.435 0.535 0.624
Female
Buffalo 0.353 0.096 0.002 0.473 0.555 1.124 1.225YS Male 0.183 0.113 0.007 0.901 0.356 1.371 1.488
YS Female 0.055 0.024 0.001 0.132 0.155 0.31 0.339
0.727 0.27 0.011 1.569 1.501 3.34 3.676
Camel 0.007 0.004 0 0.001 0.011 0.016 0.016
YS Camel 0.002 0.003 0 0.002 0.003 0.008 0.008
0.009 0.007 0 0.003 0.014 0.024 0.024
Sheep 0.951 1.348 0.002 0.39 1.898 3.636 3.757
YS Sheep 0.042 0.08 0 0.074 0.943 1.097 1.136
Goat 2.922 3.799 0.006 1.395 3.688 8.882 9.634
YS Goat 0.070 0.132 0.001 0.217 1.772 2.121 2.293
3.985 5.359 0.009 2.076 8.301 15.736 16.82
Total 8.399 6.804 0.03 4.651 11.207 22.662 24.493
Source: Livestock Census, 2006 and extrapolated for 2008-09 using data from Economic Survey 2008-09
5.3 Characteristics of Meat Sub-SectorKey characteristics of meat sub-sector are herd size cattle, buffaloes, sheep and goats type of
farming (cattle, buffaloes, sheep and goats), number of household reported slaughtering animals,
number of animal (cattle, buffaloes, camels, sheep and goats) slaughtered and meat sub-sectorvalue of slaughtered meat animals (Table 3).
Livestock can be classified as large ruminants (cow and buffaloes) and small ruminants (sheep
and goat). More than 3/4th
of the population of large ruminants falls under the category of herd
size below 10 animal heads. More or less 70 percent of large ruminants farming households haveless than 5 animal units which implies that majority of the large ruminants farming population
have subsistence sized herds of large ruminants, although they represent about two-fifth of thetotal population. In case of small ruminants, nearly three-fourth of total sheep farming
households keep about one-fifth of total sheep population by having herd size ranging 1-15animal heads. On the other hand, about 90 percent of the goat farming households kept half of
the total goat population with the herd size ranged 1-15 animal heads. This again implies thatmajority of the small ruminants farming households are subsistence farmers. It can be concludedthat majority of the livestock farming households are keeping small sized herds of small and
large ruminants.
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Table 3: Key characteristics of meat sub-sector, 2008-09Characteristics Meat sub-sector
Herd size cattle HH reported (million)
1-4 4.37
5-10 1.46
11-20 0.2821-30 0.05
> 30 0.04
6.20
Cattle inventory (million heads)
11.55
10.74
4.281.26
5.17
33Herd size buffalo HH reported (million)
1-4 4.205-10 1.43
11-20 0.29
21-30 0.04> 30 0.03
5.99
Buffalo inventory (million heads)
10.0110.35
4.45
1.182.92
29.91
Herd size sheep HH reported (million)
1-15 1.20316-50 0.26851-150 0.073
151-350 0.015
> 350 0.006
1.565
Sheep inventory (million heads)
6.037.536.17
3.34
4.33
27.40
Herd size goat HH reported (million)
1-15 6.172
16-50 0.531
51-150 0.083151-350 0.013
> 350 0.004
6.803
Goat inventory (million heads)29.89
14.63
7.123.03
3.62
58.29
Type of farming Cattle
- Rural irrigated- Rural barani
- Progressive
- Per urban
Cattle inventory (million heads)
17.34215.420
0.0250
0.213
Types of farming Buffaloes
- Rural subsistence- Rural market oriented
- Peri urban
- Commercial
Buffalo inventory (million heads)
20.3697.775
1.636
0.143
Type of farming Sheep and goat
- Nomadic- Transhumant
- Sedentary- Household
Sheep & goat inventory (million heads)
5.4226.98
34.8618.47
Number of households reported slaughteringbeef animals
- mutton animals
4.412 million
3.985 million
Number of animal slaughted: Cattle- Bullocks- Cows > 3 years
- Youngstock (male)
- Youngstock (female)
7.673 million1.0021.552
0.971
0.448
Number of animal slaughted Buffaloes- Male (adult)
- Female (adult)
- Youngstock (male)- Youngstock (female)
3.676 million0.624
1.225
1.4880.339
Number of animal slaughted: Small ruminants
- Sheep- Youngstock
- Goat
- Youngstock
16.82 million heads
3.7571.136
9.634
2.293
Number of animal slaughted Camel
- Camel (adult)- Youngstock
0.024 million
0.0160.008
Meat sub-sector value of slaughted - beef animals
- mutton animals
173.595 billion
92.960 billion
Key desirable traits Meat production, reproductive capacity
Provinces where product is number onebeef animals- mutton animals
Punjab and SindhBalochistan, NWFP, Punjab and Sindh
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Four types of cattle farming are prevalent in the country which are known as rural irrigated
(17.34 million heads), rural barani (15.42 million heads), progressive farming (0.025 million
heads) and peri urban (0.213 million heads). There are also four types of buffaloes farming in thecountry which are known as rural subsistence (20.369 million heads), rural market oriented
(7.775 million heads), peri urban (1.636 million heads) and commercial (0.143 million heads).
Number of cattle, buffaloes and camels slaughtered were 7.673 million heads, 3.676 millionheads and 0.224 million heads respectively by 4.412 million households. The meat sub-sectorvalue of slaughtered beef animal was Rs.175.01 billion in the country during 2008-09 (Table 3).
Four types of small ruminant farming are prevalent in the country which are known as nomadic(5.42 million heads), transhumant (26.98 million heads), sedentary (34.86 million heads) and
households (18.47 million heads). Numbers of sheep and goats slaughtered were 16.82 million
heads by 3.985 million households. The industry value of slaughtered mutton animal was
Rs.73.65 billion in the country during 2008-09 (Table 3).
6. Meat Supply Chain
The supply chain deals with the all the activities from inception (inputs, production, processing
and distribution) of a product to its consumption. The meat supply chain (flow of meat animal to
meat for domestic market and export market) is presented in Figure 2. The meat animals for the
meat industry are mainly comes from the livestock farmers which contribute about 97 percent ofthe total meat animals (23.764 million). Feed lot fattening contribute 2.1 percent meat animals
(0.514 million animals). Less than 1 percent meat animals are produced by the meat exporter at
their own farm.
Livestock farmers sell their animals (80%) to beopari, take animals (5%) to live animals markets
and sell to rural butcher (15%). Beopari sell their animals (98%) at live animals markets and 2
percent of them to rural butcher. From live animals markets, 52 percent meat animals arepurchased by contractors, 15 percent by traveler traders, 31 & 2 percent animals are purchased
by urban and rural butchers respectively. The animals contractors sell their 27, 72 and 1 percent
of meat animals to the traveling traders, urban butchers and exporters respectively. The travelertraders sell their animals to urban butchers (84%) and take to slaughter house (16%). From feed
lot fattening, meat animals are sold to beopari (71%), livestock markets (18%), contractors
(10%) and rural butchers (1%).
Meat (beef and mutton) are marketed from recognized and non-recognized slaughter house to
wholesalers (30%) and retailers (70%). Wholesalers sell their meat to retailers (90%), hotel and
restaurants (5%), food services and suppliers (3%) and super markets (2%). Retailers sell their allmeat to the consumers. Urban butchers sell their meat to consumers (93%), food suppliers (3%)
and hotel and restaurants (4%). The rural butchers sell all the meat to the rural consumers. The
offals are traded by offal contractors who sell to the offal retailers (50%) and to offal processors
(50%). Offal retailers sell all the offals to the consumers. The offals processors sell all theiroffals to the offal exporters (Figure 2).
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Figure 2: Supply Chain for Red Meat
Feed lot Fattening
(2.1%)
31%72%
2%
2%
27%
Offals
Retailer
CONSUMERS (98.8%)
Super Stores
EXPORT (1.2%)
Hotels/Food
Chains
Offals
Contractors Wholesaler
s99
100
93
Retailers
Exporters
S. HouseRecognized
Slaughterhouse
(49%)
U. Butchers
(30%)
R. Butchers
(21%)
100
100
70%
30%
7%
100
50% 90% 8%
100
100
2%
Exporter own Farms
(
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7. Red Meat Value Chain
This section is devoted to the five segments of red meat value chain in Pakistan. The value chaindeals with the diverse interrelationships among market opportunities constraints and directives at
various levels of the supply chain and at different levels of influence, from which specific value
addition takes place. These segments are input provision/supplies, meat animal production, meatanimal marketing, processing and meat domestic and export markets. The basic structure of thePakistan meat sub-sector is depicted in the meat value chain in Pakistan for the year 2008-09 in
Figure 3. The first column in the red meat value chain inputs refers to the main products and
services that cattle, buffaloes, sheep and goats farmers need in order to raise beef animals,including feed, veterinary services, and seedstock (breeding).
The production column includes three separate stages of beef and mutton animals,
representing three different types of farmers: those with cattle & buffaloes, sheep & goatoperations (where beef and mutton animals are produced under different production system in
the country) and feedlot operators (who confine beef and mutton animals and feed them a high-
energy diet of grains/wanda to bring them to slaughter weight). One important box dairy beef(cow and buffalo) and dairy mutton (sheep and goat enters the Pakistan beef and mutton
industry value chain laterally, from the dairy industry. A portion of the Pakistan beef industry is
made up of dairy beef and dairy mutton that comes from cows, buffaloes, sheep and goat culled
from dairy herds because, for age or other reasons, they are not productive for dairy purposes.
Meat animal marketing column includes the purchase of these animals by traders in thecountry. These traders collect animals from the villages and sell them to wholesalers calledBeopari or take them himself to the local live animals markets. In big cities (Lahore, Karachi,
Peshawer, Quetta, Multan, Gujranwala) and towns commission agents called Arhties also operate
in most parts of the country. In Lahore, there is another group of wholesalers called Rewaitees.
They buy large number of sheep and goats from the Beoparies, through the Arhties, have themslaughtered and then sell them to the retailers through secret bidding. Several butchers
collectively may also buy several animals from the Arhties, slaughter them and sell the dressed
carcasses/meat to the consumers. There are no commission agents in Baluchistan. The Beopariesarrange large number of animals from large markets like Quetta and then transport them to main
consumer outlets like Karachi and Lahore.
Processing (Slaughtering)column of the value chain includes slaughtering of mutton and beef
animals at recognized and non-recognized slaughter houses both in urban and rural areas.
Distribution is achieved through wholesalers or director sale to retailers (butchers), although the
wholesale role is increasing being perform by the large handlers and processors.
At the end of the meat value chain, in the Distri bution (Meat Marketing) column includes
retailers, super markets, restaurants, and food service suppliers which provide dining and
vending services for corporate clients such as offices, universities, wedding ceremonies andhealthcare institutions.
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Figure 3: Red Meat Value Chain in Pakistan, 2008-09
7.1 Input Provision/Supplies --- 1stSegment of Value Chain
The first column in the chain inputs refers to the main products and services that cattle and
buffaloes farmers need in order to raise beef animals, including feed, veterinary services, and
breeding (Figure 4). The current situation of each input and binding constraints to input supplyare briefly discussed here.
7.1.1 Feed
Feed includes fodder, concentrates and pastures. Livestock producers reported that fodder and
feed are very expensive due to their limited supplies. Area under fodder crop has declined from2.75 million hectares in 1986 to 2.45 million hectares in 2006. The number of livestock headshas increased from 54.48 million heads in 1986 to 55.47 million heads in 2006. The livestock
population and fodder production are inversely related fodder productivity. The fodder area per
adult animal unit has significantly declined from 0.067 ha in 1986 to 0.035 ha in 2006. The
fodder production per adult animal unit also has declined from 1.31 ton in 1986 to 0.80 ton in2006. The concentrate and wheat straw availability per adult animal unit has also declined from
1986 to 2006 (Table 4).
Feed
Veterinary
Services
Genetics
(Breeds)
Cattle Farming Buffalo Farming
Culled Beef
Animals
Feedlots Fattening
Culled Mutton
Animals
Recognized and Non-
Recognized Urban and
Rural Slaughter Houses as
well as Eid-ul-Azha
Meat Transport
Meat Export
Food Service
Suppliers
Transport
Live Export
Wholesalers
UBs & RBs
Retailers
Hotel and
Restaurants
Handling, Packing
and Loading
(Butchers)
Inputs Meat Animals Production Meat Animals
Marketing
Processing
(Slaughtering)
Distribution
(Meat Marketing)
Sheep and Goats
Consumers
Super Markets
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Table 4: Comparative status of livestock inventory and fodder as well as concentrate
availability for livestock census yearsItems 1986 1996 2006
Fodder area (m.ha) 2.75 2.72 2.45
Fodder production (m.ton) 54.48 60.34 55.47
Fodder productivity (t/ha) 19.60 22.20 22.66
Concentrate availability (m.ton) 1.4 2.1 2.5Wheat straw (m.ton) 13.9 16.9 21.27
Adult animal units (m) 41.52 52.40 69.26
Fodder area per adult animal unit (ha) 0.067 0.052 0.035
Fodder availability per adult animal unit (ton) 1.31 1.15 0.80
Adult animals units feeded from a hectare of fodder 14.96 19.30 28.29
Adult animal units feeded from a tonne of fodder 0.76 0.87 1.25
Concentrate availability per adult animal unit (ton) 0.034 0.040 0.036
Wheat straw availability per adult animal unit (ton) 0.335 0.323 0.307
Figure 4: Red Meat Value Chain: Inputs 1stSegment of Meat Value Chain
Feed(Green & dry
fodders,
concentrates and
pastures)
Veterinary
Services(Medicine,
vaccination and A.
insemination)
Genetics/Breeds
Cattle (10),Buffaloes (3)
Sheep (28)
Goat (25)
Cattle Farming Buffalo Farming
Culled Beef
Animals
Feedlots Fattening
Culled Mutton
Animals
Recognized and Non-
Recognized Urban andRural Slaughter Houses as
well as Eid-ul-Azha
Meat Transport
Meat Export
Food ServiceSuppliers
Transport
Live Export
Wholesalers
UBs & RBs
Retailers
Hotel andRestaurants
Further Meat Processing
(Handling, Packing and
Loading)
Inputs(Seedstock,
feed and
veterinary
services)
Meat Animals Production Meat Animals
Marketing
Processing
(Slaughtering)
Distribution
(Meat Marketing)
Sheep and Goats
Consumers
Super Markets
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7.1.2 Pasture resourcesThe total pasture area in different parts of Pakistan is 50.88 m.ha in 1987 (Table 5). The numbers
of adult animal units of small ruminants are 10.7 million. The rangeland per adult animal ofsmall ruminant is 4.76 ha/animal. FAO (1987) has reported a critical stocking rate of 16
ha/animal unit for low potential ranges. Due to misuse and centuries of overgrazing, the
productivity of rangelands has been adversely affected. At present, rangelands are producingonly 10 to 15% of their potential. This low productivity can be increased by adopting variousmanagement practices such as periodic closures, re-seeding, and improved grazing management
etc. (Muhammad, 2002).
Table 5: Area of rangelands in Pakistan, 1988Province Total area
(M ha)
Rangeland area
(M ha)
Percentage of provincial
area
Balochistan 34.7 27.4 79
Sind 14.1 7.8 55
Punjab 20.6 8.2 40
NWFP 10.2 6.1 60
Northern Areas 7.0 2.1 30
Azad Kashmir 1.3 0.6 45Total 88.0 45.2 51
Source: NCA, 1988
Using the data of pastures available in 1988 and number of small ruminants in 2006, 4.76hectares of rangeland is available per adult small ruminant in Pakistan (Table 6).
Table 6: Status of rangeland in Pakistan during 1988Area of rangeland 1988
Area (m.ha) 50.88
Adult animal unit (small ruminant) - million 10.7
Rangeland/adult animal unit (small ruminant) - ha/AAU 4.76
Source: Muhammad, 1987
7.1.3 Veterinary services
The number of livestock hospital, dispensaries, artificial insemination centres, livestockprofessional and sub-professional is limited in order to cover the livestock population in thecountry and therefore veterinary services to livestock are poor (Table 7). Although, there are
several research institutes, research in livestock is rather weak mainly because of shortage of
trained manpower, research facilities and operational funds (Hassnain and Khan, 2007). Theavailability of veterinary services per adult animal is very limited in Pakistan.
Table 7: Livestock veterinary servicesLivestock extension services 2006
Adult animal units 69.26
Veterinary hospital 800
Veterinary dispensaries/centres 5000
Artificiel insemination (AI) centres/sub-centres 1000
Livestock research institutes 12
Livestock/poultry farms 100
Professional 2000
Sub-professional 5000
Adult animal units/hospital 86575
Adult animal units/dispensary 13852
Adult animal units/AI 69260
Adult animal units/professional 34630
Adult animal units/sub-professional 13852
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7.1.4 Seed stock (Genetics/breeds)
Reliable data on almost all aspects of livestock biodiversity in Pakistan is very limited. Even thebreed inventory of species particularly of sheep and goats is not complete. Recently, Hassnain
and Usmani (2006) have reviewed the state of animal genetic resources in Pakistan which is
reproduced in Table 8. Pakistan has 9 species of livestock. Several breeds of these cattle,buffaloes, sheep, goats, camels, etc. are transboundry breeds because these also exist in someother countries of the region (Hassnain and Khan, 2007). Some examples of transboundry breeds
are Sahiwal and Thari cattle, Nili-Ravi buffaloes, Beetal goats and Aseel chickens (Hassnain and
Usmani, 2006). Moreover, it is claimed by many professionals that some breeds of these speciesparticularly of sheep and goats are yet to be identified, characterized and reported (Hassnain and
Khan, 2007).
Table 8: Animal Genetic Resources of PakistanSpecies No. of breeds
Cattle 10
Buffaloes 3
Sheep 28Goats 25
Camels 20
Horses 2
Donkeys 1
Yaks 1
Chicken 3
7.1.5 Conclusions
The summary of Inputs 1stsegment of meat value chain is presented in Figure 5. There are
transboundry breeds namely Sahiwal and Thari cattles, Nili Ravi buffaloes and Beetal goats.
There are no beef breeds of cattle in Pakistan and therefore beef is at best a by-product.Haphazard breeding is prevailing along with traditional unscientific overall management that iscompounded by the low genetic ceiling of the livestock. The availability of green and dry
fodders, concentrates and pastures (grazing) have declined overtime which resulted the shortage
of feed. The shortage of feed translated into poor and inadequate nutrition with resulted in lowanimal productivity. The availability of veterinary services (medicines, vaccination and artificial
insemination) along with livestock professional and sub-professional for adult animal units have
also declined overtime. The feed and veterinary services are also very expensive due to whichlivestock herders are using both feed and veterinary services at low level resulting poor livestock
productivity. Earlier, the children of small farmers were involved in grazing animal and cutting
of grasses for animal. During the current era these children prefer to go for daily wage work
rather than grazing and grass cutting due to social status.
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Figure 5: Summary of Inputs 1stsegment of meat value chain
INPUTSSeed Stock (Genetics/Breeds)
FeedVeterinary Services
SEED STOCK
(GENETICS/ BREEDS)
Cattle (10)
Buffaloes (3)
Sheep (28)
Goat (25)
TransboundrybreedsShaiwal
and Thari cattle, Nili-Ravibuffaloes and Beetal goats
Haphazard breedingTraditional unscientific
management
There are no beef breeds of cattleand beef is at best a by-product inPakistan
Need improved breeding for meatanimal programme with modernand scientific management
FEED
Green fodder
Dry fodder
Concentrates
Pastures/grazing
Fodder availability/ adult animal
unit declined 1.5 ton from 1996 to0.80 ton in 2006
Wheat straw availability per adultanimal unit has declined from 0.323ton in 1996 to 0.307 ton in 2006
Constraints availability per adultanimal unit declined from 0.04 ton
in 1996 to 0.036 ton in 2006
Rangeland per adult animal unitsmall ruminants is only 4.76
ha/annumlow productivity of
rangeland due to over grazing andexploitation
During the current era these childrenprefer to go for daily wage work
rather than grazing and grass cuttingdue to social status of herders
High cost of feeds
Number of nomadic fromAfghanistan has disappeared due towar and terror
Such decline of availability forgreen and dry fodders and
concentrates overtime led to poorand inadequate nutrition which
resulted in low animal productivity
Large and small ruminants areperforming much below theirgenetic potential due to poor and
inadequate nutrition which lead to
compounded by the low genetic
ceiling of livestock
VETERINARY
SERVICES
Medicines
Vaccination
A. insemination
High disease incidence andhigh mortality
Limited access to livestockservices
Low level of farmerssatisfaction
High cost of veterinaryservices
A veterinary hospital, aveterinary dispensary and aartificial insemination centreis available for 86575, 13852
and 69260 adult animals unitrespectively during 2006
livestock censusA veterinary professional and
a sub-professional is availablefor 34630 and 13852 adult
animal unit during 2006livestock census
Medicines are very expensive
Due to limited availability ofveterinary services andexpensive medicines,livestock herders are using atlow level resulting poor
livestock productivity
Issues of Inputs1. Haphazard breeding and traditional unscientific management
2. Availability of feed (green & dry fodders, concentrate and pastures) per adult animal declined overtime led to inadequatenutrition and feed is expansive
3. Limited coverage of veterinary services (medicines, vaccination & AI) and medicines are expansive
4. Low input system (expansive inputs and therefore farmers are using at low level)
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7.2 Meat Animal Production --- 2ndSegment of Value Chain
The input (live animals) for the red meat sub-sector is mainly the livestock farmers whichcontribute about 97 percent of the total meat requirement. Among the livestock farmers small
farmers with mix crop livestock farming system are dominant in the meat sector. Beef is the by-
product of the livestock sector and the male calves and heifers of cattle and buffaloes are offeredfor sale for slaughtering along with a small share of female calves and heifers. The adult cowsand buffaloes are also offered for slaughtering after certain age and productivity levels. An
estimated 16.5 and 20 percent of total beef and mutton production originates from dairy cows,
dairy buffaloes, female sheep and female goats. Recently the private fattening farms are alsodeveloped with the government initiatives through feed lot fattening project through private
sector-led, Livestock and Dairy DevelopmentBoard. The structure of meat animal production
is presented in Figure 6.
7.2.1 Inventory of meat animals
The livestock inventory for milk and meat animals for the year 2008-09 in the country ispresented in Table 9. Total livestock inventory for the year 2008-09 is 154.2 million heads. Out
of which, cattle, buffaloes, sheep and goats are 33, 29.9, 27.4 and 58.3 million respectively. Out
of 33 million of cattle, 9.7 and 11.1 million heads of in-milk cows and in-milk buffaloes
respectively. The remaining animals can be considered as meat animals (Table 9).
Table 9: Livestock inventory and gross value 2008-09Type of Animal 2008-09 Price (Rs./ Animal) Gross Value Rs. billions
A. Milk and Meat Animals
(i) Total Cattle 33 793.100
Bullocks (3 years & above) 4.6 42000 193.200
Dry Cows (3 years & above) 7.2 17000 122.400
I n-mil k cows (3 years & above) 9.7 35000 339.500Youngstock (below 3 years) 11.5 12000 138.000
(ii) Total Buffaloes 29.9 939.400
Male buffaloes (3 years & above) 0.7 50000 35.000
Dry Female buffaloes (3 years & above) 5.9 25000 147.500
I n-mi lk buf faloes Female buf faloes (3 years &
above)
11.1 55000 610.500
Youngstock (below 3 years) 12.2 12000 146.400
(iii) Total Sheep 27.4 156.150
Male (1 year & above) 4.5 9000 40.500
Female (1 year & above) 14.2 6000 85.200
Youngstock (below 1 year) 8.7 3500 30.450
(iv) Total Goats 58.3 205.670Male (1 year & above) 7.2 5200 37.440
Female (1 year & above) 33.8 3800 128.440
Youngstock (below 1 year) 17.3 2300 39.790
(v) OthersCamel 0.921 40000 36.835
Horses 0.344 40000 13.770
Mules 0.156 50000 7.785
Donkeys 4.268 10000 42.685
Total 5.689 2195.391
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Figure 6: Meat Animals Production 2stSegment of Meat Value Chain
7.2.2 Cost of production of meat animals at farm level
Cost of production of meat animals at farm level is comprised of fodder cost, labor, initial vale ofanimal, interest on investment and depreciation of shed etc. Cost of production of meat is
estimated at two levels namely cost at general farm level and cost of production of feed lot
fattening of commercial venture.
7.2.3 Cost of production of meat animals (general farmers)The cost of production for both beef and mutton animals at general farm level is presentedseparately in this section.
7.2.3.1Cost of production of beef animal
The cost of production for beef animal is calculated for young stalk including the initial value. At
general farm level where the beef animal is considered as a by product of dairy animal, the cost
of production of young stalk beef animals is estimated at Rs. 16113 where as the variable cost isRs.12113 and the value of out put is Rs.12277 resulting a gross margin of Rs. 165 per animal and
a net return in the form of loss amounting to Rs. 3835 per head for a 12 month old beef animal
(Table 10).
Feed(Green & dry
fodders,
concentrates and
pastures)
Veterinary
Services(Medicine,
vaccination and A.
insemination)
Genetics/Breeds Cattle (10),
Buffaloes (3)
Sheep (28)
Goat (25)
Cattle Farming(3.973 million heads)
Buffalo Farming(3.676 million heads)
Culled Beef
AnimalsBeef = 1.263 m.h
Cattle = 0.655 m.h
Buffaloes = 0.606 m.h
Feedlots FatteningBeef Animals = 0.0956 million heads
Cattle = 0.0496 million heads
Buffaloes = 0.0459 million heads
Culled Mutton
AnimalsM. Animals = 3.365 m.h
Sheep = 0.979 m.h
Goat = 2.385 m.h
Recognized and Non-
Recognized Urban andRural Slaughter Houses as
well as Eid-ul-Azha
Meat Transport
Meat Export
Food ServiceSuppliers
Transport
Live Export
Wholesalers
UBs & RBs
Retailers
Hotel and
Restaurants
Further Meat Processing
(Handling, Packing and
Loading)
Inputs(Seedstock,
feed and
veterinary
services)
Meat Animals ProductionMeat Animals = 24.493 million heads
Beef Animals = 7.673 million heads
Mutton Animals = 16.82 million heads
Meat Animals
Marketing
Processing
(Slaughtering)
Distribution
(Meat Marketing)
Sheep and GoatsSheep = 4.899 million heads
Goat = 11.927 million heads
Consumers
Super Markets
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Table 10: Cost of production of beef animal
Items Unit Quantity Rate(Rs) Amount
Produce
Sale (12 month old animal ) 1 12077 12077
Manure 40 kg 25 8 200
Out Put 12277
Ave. Live Weight at Sale Kg 171.6
Sale Price Beef animal Rs./Kg Live Weight 70.38
Costs
Green fodder @ 10 Kg per Day 40 kg 91.25 40 3650
Dry fodder @ 1 Kg per Day 40 kg 18.25 120 2190
Vet medicine 2 30 60
Calf 1 4000 4000
Interest @12.5% on average value 1238
Labor @ 1 man day for 20 calf Days 22.8125 200 4563
Equipment costs 100 100
Interest on shed and space+depreciation on shed 312.5 313
Variable cost 12113Total cost 16113
Gross Margin/Head Rs./Animals 165
Net Income/Head Rs./Animals -3835
7.2.3.2Cost of production of mutton animalsThe cost of production for mutton animal is calculated for young stalk including the initial value.At general farm level, the cost of production of 6 month old mutton animals is estimated at
Rs. 2904 where as the variable cost is Rs. 1904 and the value of out put is 2710 resulting a gross
margin of Rs. 806 per animal and a net return with loss to amounting to Rs. 194 per animal
(Table 11).
Table 11: Cost of production of mutton animalsItems Unit Quantity Rate(Rs) Amount
Produce
YS 6 month old 1 2700 2700
Manure 40 kg 1.25 8 10
Out Put 2710
Ave. Live Weight at Sale Kg 24.0
Costs
Green fodder @ 3 Kg per Day 40 kg 13.6875 40 548
Dry fodder @ 0.15 Kg per Day 40 kg 0.45625 120 55
Vet medicine 1 30 30
Calf 1 1000 1000
Interest @12.5% on average value 204
Labour @ 1 mand day for 20 calfs Days 3.65 200 730
Equipment costs 25 25
Interest on shed and space+depreciation on shed 312.5 313
Variable cost 1904
Total cost 2904
Gross Margin/Head Rs./Animals 806
Net Income/Head Rs./Animals -194
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7.2.4 Cost of production of beef animals at feed lot framersDuring the recent years feed lot fattening is also gaining popularity among the progressive
farmers and there is also shift towards rearing meat animals against the previous practice ofproducing beef as a by product of dairy animals and draft animals. There was no practice of
rearing mutton animals as feed lot specifically. The cost of production for feed lot farm for both
beef and mutton is calculated and presented in this section as follows.7.2.4.1Cost of production of beef animalsThe cost of production of beef animals at feed lot farms is calculated and presented in Table 12.
To get a representative estimates a herd size of 40 animals is assumed. The farm gate price of the
beef animal with an average weight of 109 kg including the transportation charges isRs. 9800/head. The cost of production for about three month is calculated at Rs.5034 with a
weight increase of 54 kg. The value of output is Rs. 15270 per animal resulting a profit of Rs.436
without subsidy and Rs.1836 with subsidy per animal.
Table 12: Cost of production of beef animals at feed lot farmsItems Unit Cost per animal
Purchase Price Rs./Animal 9650
Transportation Rs./Animal 150
Purchase Price Rs./Animal 9800Initial Weight Kg/Animal 109
Initial Price Rs./Kg Live weight 90
VC:Labor (2 Persons @ 4000/month/person Rs./Animal 600
Electricity Rs./Animal 45
Rougages (hey,straw,fodder) Rs./Animal 1800
Wanda Rs./Animal 1620
Medicines Rs./Animal 100
Sub-Total 4165
Interest on variable cost Rs./Animal 125.00
Interest on value of animal @ 12 %pa Rs./Animal 294.00
Shed cost at 12% Rs./Animal 450.00
Fixed Cost Rs./Animal 869.00
Cost of Production Rs./Animal 5034.00
Income
Sale of Animal Rs./Animal 15000.00
FYM Rs./Animal 270.00
Total Value of Animal at sale Rs./Animal 15270
Subsidy Rs./Animal 1400.00
Gross Income Without Subsidy Rs./Animal 15270.00
Net Income Without Subsidy Rs./Animal 436.05
Gross Income With Subsidy Rs./Animal 16670.00
Net Income With Subsidy Rs./Animal 1836.05
Initial Weight Kg/Animal 109.00
Final Weight Kg/Animal 163.00
Difference Kg/Animal 54.007.2.4.2Cost of production of mutton animalsThe cost of production mutton animals for a lot of 150 animals is calculated and presented in
Table 13. The purchase price for a 25Kg animal was Rs.3150 per animal including the
transportation cost. The cost of production to the feed lot farmers for mutton animal is estimated
at Rs.1277 per animal and the value of out put is Rs.4529 per animal. Net income with a weightgain of about 10.8 kg per animal is estimated at Rs.102 per animal and a subsidy of Rs.400 per
mutton (male) animal is provided to the farmers.
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Table 13: Cost of production of mutton animalsItems Unit Cost per animal
Purchase Price Rs./Animal 3100
Transportation Rs./Animal 50
Purchase Price Rs./Animal 3150
Initial Weight Kg/Animal 25
Initial Price Rs./Kg Live weight 126Variable Costs
Labor (2 Persons @ 4000/month/person Rs./Animal 160
Electricity Rs./Animal 12
Roughages (hay, straw, fodder) Rs./Animal 80
Wanda Rs./Animal 729
Medicines Rs./Animal 58
Sub-Total 1038
Interest on variable cost Rs./Animal 31.0
Interest on value of animal @ 12 %pa Rs./Animal 95.5
Shed cost at 12% Rs./Animal 112.0
Fixed Cost Rs./Animal 238.00
Cost of Production Rs./Animal 1277.00
IncomeSale of Animal Rs./Animal 4511.00
FYM Rs./Animal 18.00
Total Value of Animal at sale Rs./Animal 4529.00
Subsidy Rs./Animal 400.00
Gross Income Without Subsidy Rs./Animal 4529.00
Gross Income With Subsidy Rs./Animal 4929.00
Net Income Without Subsidy Rs./Animal 102.00
Net Income With Subsidy Rs./Animal 502.00
Initial Weight Kg/Animal 25.00
Final Weight Kg/Animal 35.80
Difference Kg/Animal 10.8
7.3 Conclusions
The summary of Production 2nd
segment of meat value chain is presented in Figure 7.
Analysis of cost of production of small and large ruminants production revealed that farmers aregetting negative net return where feed lot farming from commercial point of view provide
significant results. This implies that farmers do not raise animals with the commercial
perspective which require a sound livestock extension services to make them aware about theeconomic return of the raising commercial meat animal. The overall productivity of all the
species in terms of meat is low. The overall increase in meat over the years is due to the
increased inventory and not because of any increase in their productivity (Hassnain and Khan,
2007). They further argued that this is a serious issue and matter of great concern. Literature hasshown that both the large and the small ruminants are performing much below their genetic
potential (Hassnain and Khan, 2007). Moreover, their genetic ceiling can be increased with
improved breeding program. The major factors contributing towards low productivity are poor
and inadequate nutrition, inadequate health care, haphazard breeding and traditional unscientificoverall management. All these factors translate into a existing very weak livestock extension
services in the country.
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Figure 7: Summary of Production 2ndSegment of Meat Value Chain
TRADITIONAL MEAT
RAISING ANIMALS
Raising of Beef Animals (million heads)
Beef Animals = 6.292
Cattle = 3.268Buffaloes = 3.024
Mutton Animals = 13.436Sheep = 3.912
Goats = 9.524
Cost of production of 1 year old beef
animal at general farm level
(Rs./animal)Output = 12277Variable cost = 12113Fixed cost = 4000Cost of production = 16113
Gross margin = 165Net income = -3835
Cost of production of 6 month oldmutton animal at general farm level
(Rs./animal)
Output = 2710Variable cost = 1904
Fixed cost = 1000Cost of production = 2904Gross margin = 806
Net income = -194
Low inputs (no beef breeds of cattle,inadequate nutrition and limitedavailability of veterinary services) leads
to low livestock productivity
FEED LOT FATTENING
Fattening of beef animals
Beef Animals = 0.0956 m.hCattle = 0.0496 m.h
Buffaloes = 0.0459 m.h
Cost of production of 40 beef
animals on commercial basis
(Rs./animal)
Output (value of animal at sale) = 15270Variable cost = 5034Fixed cost = 9800Cost of production = 14834
Gross margin = 10236Net income = 436
Fattening of mutton animals
Mutton Animals = 0.025252m.hSheep = 0.00734 m.hGoats = 0.0178 m.h
Cost of production of 150 mutton
animals on commercial basisOutput (value of animal at sale) = 4529Variable cost = 1276Fixed cost = 3150Cost of production = 4426
Gross margin = 3253Net income = 103Confined to beef and mutton animals withhigh energy diet to bring them to slaughter
weight which implies higher inputs andbetter management, feed lot fattening isprofitable enterprise
CULLING FROM
DAIRY ANIMALS
Culled beef animals from
dairy animals
Beef Animal = 1.262 m.hCattle = 0.655 m.hBuffalo = 0.606 m.h
Culled mutton animals from
female sheep and goats
Mutton Animal = 3.365 m.h
Sheep = 0.979 m.hGoat = 2.385 m.h
A portion of meat sub-sector is
made up of dairy meat andmutton that comes from in-milking cows and buffaloes,female sheep and female goats
culled from dairy herds becausefor age for other reasons, they
are not productive for dairypurposes and reproductive
potential
MEAT ANIMALS PRODUCTIONMeat (Beef and Mutton) Animals = 24.493 million heads with a value of Rs.266.557 billion
Beef Animals = 7.673 million heads with a value of Rs.173.5965 billion
Cattle = 3.973 million heads with a value of Rs.93.172 billionBuffaloes = 3.676 million heads with a value of Rs.79.6245 billion
Mutton Animals = 16.82 million heads with a value of Rs.92.960 billionSheep = 4.8993 million heads with a value of Rs.36.0768 billion
Goat = 11.927 million heads with a value of Rs.56.8834 billion
ISSUES OF MEAT ANIMALS PRODUCTION
1. Weak and unhealthy stock and breeding lines because no beef breeds of cattle and beef is at best a by-product2. No concept of herd health management3. Low output system due to low input system4. Social system has broken due to inflation and ag-inflation is even higher
5. Raising meat animal with traditional system is not profitable enterprise
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8. Marketing of Meat Animals ---3rdSegment of Meat Value Chain
Livestock are generally marketed either at village level by personal contact between buyer andseller or at special places called livestock markets organized for animal trade. These livestock
markets are organized at sub-tehsil, tehsil, district and division levels on daily, weekly,
fortnightly and monthly bases (Sharif et al., 2003). Both buyers and sellers are well informedabout these market days as the days/dates are remained unchanged since ages. Smaller orprimary markets are present in the rural anterior whereas larger or secondary markets are usually
organized near the urban centers, on the main roads. In addition, some special livestock markets
are also organized on provincial/regional festivals. Daily-based special markets are alsoorganized at least 2-3 weeks before the eve of Eid-ul-Azha. In addition, some livestock markets
are also introduced in the private sector. In general, both small and large ruminants are traded in
the same markets, however at some places, buffalo, cattle, sheep and goats are also traded in
separate markets. For instance, in bakker mandies, only small ruminants are marketed. Varioustypes of beoparies, animal traders and farmers bring their livestock in these for selling (Sharif et
al 2003).
In villages, depending upon the nature of need arisen, the farmers choose time, place and agency
for disposing their animals. There are several reasons for sale like urgent domestic need, as
regular means of income, disposal of culled animals and scarcity of feeds/fodders as during
droughts. Cattle and buffaloes are sold generally at the peak of their performance around 5-7years of age or when they are about to calve. Heifers are disposed off at about 25-30 months of
age. Working bullocks are sold after training as work animals. All culled animals are sold for
meat when no longer fit for work or milk production. Sheep and goats are sold generally beforeone year of age (Hassnain and Khan 2007). The structure of live animals marketing as a 3
rd
segment of meat value chain is presented in Figure 8.
8.1 Market Infrastructure
Majority of the livestock markets are under the direct control of the relevant local administration
and the market holding days/dates are notified. The local administration/cantonment boards for
animal trading provide special places for animal trading. The management responsibilities arecontracted out on annual basis by open auction (Sharif et al., 2003). Depending upon the type,
size of the market and the number of animals traded, and the practice of commission on sale
price of animal or as entry fee only the contractual amount found varied between 0.5 millionrupees to 120 million rupees. Some of the markets like Karachi, Peshawar and Quetta the
individual arthies provide place and basic facilities for animals to the beoparies and charge on
per animal or truck load basis and there is only entry fee of Rs. 10 per small ruminant and Rs. 25
per large animal.
The contracted money is received-back by the contractor from the buyers and sellers in the form
of commission or market fee. The local administration decides about the amount/percentage of
market/entry fee to be charged. In Punjab 3-5% of the value of the animal sold is charged asmarket fee whereas in AJK, some fixed amount varied by the animal type is charged. In general,
basic facilities like boundaries, electricity, loading-unloading facilities, animal watering, animal
shelter, weighing, telephone and communication, easy availability of transport, the services ofveterinary doctor etc. are lacking in majority of the markets. Private vendors usually provide the
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Figure 8: Meat Animals Marketing 3rdSegment of Meat Value Chain
food and fodder services. In primary markets, the quality of roads leading to these markets is alsopoor. In NWFP, Balochistan and AJK, at some areas only a piece of land is available as livestock
markets whereas in other areas, farmers have to travel for very long distance to sell their animalsin these markets. It seems that these livestock markets are a source of revenue for the local
governments/cantonment boards. There is no investment of the contracted money for provision
of various facilities in these livestock markets.
8.2 Live Animals Market Intermediaries
Beoparies and commission agents are main intermediaries of livestock markets. The market
intermediaries are comparatively well informed about market situations than the farmers.Although the services of broker or dallal are available, but most of the times they extend more
favor to buyers than farmers. Some farmers complained about forming cartels by marketintermediaries by not offering prices beyond some limits. In this way, both beoparies and
commission agents exploit them. The transport means used are not suitable, therefore, causingphysical distress, bruising and other internal/external injuries to the animals (Sharif et al., 2003).
The estimated cost of transport for beef (cattle and buffaloes) animals and mutton (sheep and
goat) animals from farmers to slaughter places via livestock markets is Rs.6.125 billion andRs.2.324 billion respectively during 2008-09. The marketing channel of live animals from
villages to slaughter houses and export of live animals is given in Figure 9.
Feed(Green & dry
fodders,
concentrates and
pastures)
Veterinary
Services(Medicine,
vaccination and A.
insemination)
Genetics/Breeds Cattle (10),
Buffaloes (3)
Sheep (28)
Goat (25)
Cattle Farming(3.973 million heads)
Buffalo Farming(3.676 million
heads)
Culled Beef
AnimalsBeef = 1.263 m.hCattle = 0.655 m.h
Buffaloes = 0.606 m.h
Feedlots FatteningBeef Animals = 0.0956 million heads
Cattle = 0.0496 million heads
Buffaloes = 0.0459 million heads
Culled Mutton
AnimalsM. Animals = 3.365 m.h
Sheep = 0.979 m.hGoat = 2.385 m.h
Recognized and Non-Recognized Urban and
Rural Slaughter Houses as
well as Eid-ul-Azha
Meat Transport
Meat Export
Food ServiceSuppliers
Channel-1
Farmer to Beopari = 80%
Farmer to LAM = 5%
Farmer to RBs = 15%
Channel-2
Beopari to LAM = 98%
Beopair to RBs = 2%
Channel-3
LAM to Contractors = 52%
LAM to T.Traders = 15%
LAM to UBs = 31%
LAM to RBs = 2%
Channel-4
Contractor to T.Traders = 27%
Contractor to Exporters = 1%
Contractor to UBs = 72%
Channel-5
Traveler Trader to S.House = 16%
Traveler Trader to UBs = 84%
Live ExportAverage 2001-05 = 34477 heads
with export value of Rs.309.01 m
Wholesalers
UBs & RBs
Retailers
Hotel and
Restaurants
Further Meat Processing
(Handling, Packing and
Loading)
Inputs(Seedstock,
feed and
veterinary
services)
Meat Animals ProductionMeat Animals = 24.493 million heads
Beef Animals = 7.673 million heads
Mutton Animals = 16.82 million heads
Meat Animals MarketingAnimal Marketed in Domestic
Market = 24.495 m.h
Animal Exported = 33477 heads
Processing
(Slaughtering)
Distribution
(Meat Marketing)
Sheep and GoatsSheep = 4.899 million heads
Goat = 11.927 million heads
Consumers
Super MarketsTransport in Domestic
MarketTransportation cost
Beef animals = Rs.6.075 b
Mutton animals = Rs.3.253 b
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8.3 ConclusionsThe summary of the third segment of meat value chain namely live animals marketing is
presented in Figure 9. On the marketing side, the livestock markets are suffered from shortage ofbasic facilities like watering, shelter, feed and fodder. A number of other arrangements like
loading/unloading, communication, services of veterinary doctor, weighing, market boundaries
etc. are absent despite 3-5 percent commission is charged as market fee in Punjab whereas inother provinces various practices are followed. The contract money of these markets is notinvested back for provision of such facilities. But the most crucial aspect of the marketing system
constraining meat development is the sale of animal on per head basis and not on their live
weight basis. This militates against the success of any meat development program. The meatproduction is entirely in the private sector. However, the government intervention in fixing the
price at the retail end is neither rational nor fair. It makes the situation worse because this retail
price fixation is not applied to the corporate sector. Moreover, there is no livestock market
authority for regulating livestock marketing in the country.
9. Processing (Slaughtering) ---- 4thSegment of Meat Value Chain9.1 Animals for Slaughtering
Red meat has two components namely beef and mutton. The beef is mainly produced by cattleand buffaloes in Pakistan. A negligible quantity of beef is also obtained from camel and yaks.The second part, mutton mainly comes from sheep and goats. Generally speaking, camel meat is
eaten mainly be camel herders but now it is reported that camels are also regularly slaughtered in
Karachi and the coastal areas of Balochistan like Lasbela and Uthal (Hassnain and Khan, 2007).It is also used for sacrifice during Eid Al Adha. Yak meat is only eaten in the Northern Area of
Pakistan because that is where these animals are maintained (Hassnain and Khan, 2007). There
were 24.493 million heads of beef (7.673 m. heads) and mutton (16.82 million heads) animals
which were slaughtered during 2008-09. The gross value of meat industry was Rs. 266.557billion where the gross value of beef and mutton animals was Rs. 173.59 billion and Rs. 92.960
billions respectively (Table 14).
Table 14: Total number of animals slaughtered and value 2008-09Type of Animal Animals (million heads) Price Rs./Animal Value Rs. Billion
Bullocks 1.002 40500 40.581
Cow 1.552 22000 34.144
YS male 0.971 13000 12.623
YS Female 0.448 13000 5.824
3.973 93.172
Male Buffalo 0.624 38000 23.712
Female Buffalo 1.225 27000 33.075
YS Male 1.488 12500 18.6
YS Female 0.339 12500 4.2375
3.676 79.6245
Camel 0.016 40000 0.64
YS Camel 0.008 20000 0.160.024 0.8
Total Beef Animals 7.673 173.5965
Sheep 3.757 8000 30.056
YS Sheep 1.136 5300 6.0208
Goat 9.634 5000 48.17
YS Goat 2.293 3800 8.7134
11.927 56.8834
Total Mutton Animals 16.82 92.960
Total Meat Animals 24.493 266.557
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Figure 9: Summary of Live Animals Marketing 3rdSegment of Meat Value Chain
LIVESTOCK FARMERS(97%)
23.764 million animals were marketed
from traditional farmers
C-1Farmer to Beopari = 80%
Farmer to Live Animal Market = 5%
Farmer to Rural Butcher = 15%
C-2
Beopari to Live Animal Market = 98%
Beopair to Rural Butcher = 2%
C-3
Animal Market to Contractors = 52%
Animal Market to T.Traders = 15%
Animal Market to U.Butcher = 31%
Animal Market to R.Butcher = 2%
C-4
Contractor to T.Traders = 27%
Contractor to Exporters = 1%
Contractor to U.Butcher = 72%
C-5Traveler Trader to S.House = 16%
Traveler Trader to U. Butcher = 84%
FEED LOT
FATTENING(2.1%)
0.514 million animals weremarketed from feed lotting
Feed lot to R.Butcher = 1%
Feed lot to Beopari = 71%
Feed lot to L. Market = 18%
Feed lot to Contractor = 10%
EXPORTER OWN
FARM(< 1%)
0.220 million animals weremarketed from feed lotting
Exporter Own Farm to Exporting
Destination = 100%
LIVE ANIMALS MARKETINGMeat Animals Marketed = 24.493 million heads
Meat Animals Marketed in Domestic Market for Slaughtering= 24.495 million heads
Meat Animals Exported (Average 2001-05) = 33477 with a export value of Rs.309.01 million
Beef Animals Exported= Average 2001-05 = 23107 with a export value of Rs.284.58 million
Mutton Animals Exported= Average 2001-05 = 10370 with a export value of Rs.24.43 million
LIVE ANIMALS TRANSPORTING COSTSBeef Animals Transport Cost for Domestic Market = Rs.6.075 billion
Mutton Animals Transport Cost for Domestic Market = 3.253 billion
ISSUES OF MARKETING LIVE ANIMALS1. Inadequate basic facilities at live animals market (watering, shelter, feed and fodder, absence of weighing machine and
market committee)
2. Non-availability of specific transport and overloading without refrigeration
3. Delay in live animal delivery
4. Inadequate livestock marketing information system and marketing regulatory agency as well as policy
5. Faulty pricing mechanism of meat animals (per head basis rather than weight basis)
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There are no beef breeds of cattle and it is at best a byproduct. Working cattle, cows and
buffaloes that are no longer able to work or produce milk are slaughtered and consumed as beef
and therefore beef form such animals is of poor quality (Hassnain and Khan, 2007). They furtherstated that young male calves particularly of buffaloes are generally not reared and thus
slaughtered at an early age and low live weight. They also further argued that the other reason for
the early slaughter of sucklers is the high cost of milk replacers and non-availability ofeconomical early weaning diets and therefore beef is the cheapest meat whether it is from cattleor buffaloes. However during recent years efforts have been made to develop feed lot fattening
farms through providing subsidy to the farmers. The share of the animals slaughtered at Eid-ul-
Azha ranged from 25-40% for beef and mutton animals and these animals are particularly rearedto fetch good prices and also the meat produced from these animals is one of the best quality.
The structure of meat processing (slaughtering) is presented in Figure 10.
Figure 10: Processing (Slaughtering) 4thSegment of Meat Value Chain
Feed(Green & dry
fodders,
concentrates and
pastures)
VeterinaryServices(Medicine,
vaccination and A.
insemination)
Genetics/Breeds Cattle (10),
Buffaloes (3)
Sheep (28)
Goat (25)
Cattle Farming(3.973 million
heads)
Buffalo Farming(3.676 million
heads)
Culled Beef
AnimalsBeef = 1.263 m.h
Cattle = 0.655 m.hBuffaloes = 0.606 m.h
Feedlots FatteningBeef Animals = 0.0956 million heads
Cattle = 0.0496 million heads
Buffaloes = 0.0459 million heads
Culled MuttonAnimals
M. Animals = 3.365 m.h
Sheep = 0.979 m.hGoat = 2.385 m.h
Recognized & non-recognized S.Houses
at Urban and Rural Areas
Total Meat Production =2.192 m.tFrom Traditional Farms = 1.528 m.tFrom Feed Lot Fattening = 0.028 m. tEid-ul-Azha = 0.636 m.t
Meat Transporting Cost in
Domestic Markets
Meat = Rs.7.076 billion
Beef = Rs.4.752 billion
Mutton = Rs.324 billion
Food Service
Suppliers
Channel-1
Farmer to Beopari = 80%
Farmer to LAM = 5%
Farmer to RBs = 15%
Channel-2
Beopari to LAM = 98%
Beopair to RBs = 2%
Channel-3
LAM to Contractors = 52%
LAM to T.Traders = 15%LAM to UBs = 31%
LAM to RBs = 2%
Channel-4
Contractor to T.Traders = 27%
Contractor to Exporters = 1%
Contractor to UBs = 72%
Channel-5
Traveler Trader to S.House = 16%
Traveler Trader to UBs = 84%
Live ExportAverage 2001-05 = 34477 heads
with export value of Rs.309.01 m
Wholesalers
UBs & RBs
Retailers
Hotel and
Restaurants
Further Processing (Handling,Slaughtering, Cutting into Piece,
Packing and Loading)
Further processing cost=Rs.9.88 mBeef = Rs.652 million
Mutton = Rs336 millin
Inputs(Seedstock,
feed and
veterinary
services)
Meat Animals ProductionMeat Animals = 24.493 million heads
Beef Animals = 7.673 million heads
Mutton Animals = 16.82 million heads
Meat Animals MarketingAnimal Marketed in Domestic
Market = 24.495 m.h
Animal Exported = 33477 heads
Processing (Slaughtering)
Animal Slaughtered =24.459 m.h
Total Meat Production =2.192 m.t
Distribution
(Meat Marketing)
Sheep and GoatsSheep = 4.899 million heads
Goat = 11.927 million heads
Consumers
Super MarketsTransport in Domestic
MarketTransportation cost
Beef animals = Rs.6.075 b
Mutton animals = Rs.3.253 b
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9.2 The Slaughtering System
According to the West Pakistan Slaughter Control Act 1963, slaughtering of small and largeruminants should strictly be undertaken in recognized slaughterhouses with ante- and post-
mortem veterinary inspection (Sharif et al., 2003). Similarly, according to the Pakistan
slaughterhouse act of 1983, the killing of animals outside the boundary of slaughterhouses isprohibited. Recognized slaughterhouses usually provide separate buildings for slaughtering largeand small animals. There are 295 recognized slaughterhouses, 27 in NWFP, 174 in Punjab, 60 in
Sindh and 34 in Balochistan (Sharif et al., 2003). Presently, slaughtering of small and large
ruminants is done in municipal, cantonment and private slaughterhouses, and in the backyards ofmeat retailers in villages. Local municipal corporations operate majority of the urban
slaughterhouses. 16 slaughterhouses are also established in the private sector. Majority of
slaughterhouses are now located in the thick-populated areas.
In general, the existing slaughterhouse facilities are highly insufficient than the requirements.
The slaughtering, carcass dressing and by-product handling are done in the same space. They
area also in shortage of various equipments such as pulley hoists, hooks etc. for hangingcarcasses. Ante and post-mortem arrangements, water supply, drainage systems, waste disposal,
handling of by-products are inadequate and sometimes non-existent. A large portion of the by-
products such as blood, glands, intestines, and bones are either wasted or poorly processed. One
of the underlying reasons is that these facilities were not periodically updated because of variousadministratively complex procedures involved. It can, therefore, be generally concluded that the
slaughter facilities are mostly obsolete, unclean, and poorly managed (SMEDA, 2002). This
problem is most severe in big cities like Karachi, Lahore and Faisalabad. Due to the shortage ofslaughtering facilities, much slaughtering takes place outside the recognized facilities, so there is
no inspection and even in recognized slaughterhouses there are no meaningful inspection
facilities. Therefore, official statistics greatly understate the number of animals slaughtered
(FAO, 1987; Alvi, 1988). There are eleven slaughterhouses in Karachi, Lahore and Islamabadthat have modern facilities. These are good indications of developments in the slaughtering
systems of Pakistan, but the process needs to be enhanced keeping in view the national and
international challenges.
9.3 Red Meat Production
The red meat production is estimated on the basis of animals slaughtered at slaughter places
(recognized and non-recognized Slaughter houses), meat from feed lot and animals sacrificed at
the eve of Eid-ul-Azha (Table 15). Total number of animals slaughtered at slaughter places
during 2008-09 was 24.493 million heads. Total beef production originates from beef animalsproduced by general farmers slaughtered (1.187 million tons), feed lots (0.016 million tons) and
Eid-ul-Azha (0.40 million tones). Similarly, total mutton production comes from mutton animals
produced by general farmers slaughtered (0.341 million tons), feed lots (0.012 million tons) and
Eid-ul-Azha (0.236 million tones). The estimated meat production for the year 2008-09 inPakistan is 2.192 million tones. Out of this 1.603 and 0.588 m. tones are beef and mutton
respectively (Table 15). The production of cattle, buffalo and camel beef is 0.638, 0.543 and
0.006 m. tones respectively. Production of mutton from sheep and goat is 0.588 m. tons.
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Table 15. Red meat (beef and mutton) production 2008-09Type of Animal Number of
animal
slaughtered
(million heads)
Meat
(Kg/Animal)
Meat production
(Million tons)
Bullocks 1.002 275.40 0.276
Cow 1.552 160.00 0.248YS male 0.971 80.00 0.078
YS Female 0.448 80.00 0.036
0.638
Male Buffalo 0.624 243.20 0.152
Female Buffalo 1.225 200.00 0.245
YS Male 1.488 80.00 0.119
YS Female 0.339 80.00 0.027
0.543
Camel 0.016 320.00 0.005
YS Camel 0.008 160.00 0.001
Beef fr om Slaughtered Animals (1) 1.187
Beef fr om Feed Lot (2% of total) (2) 0.016
Beef fr om Eid-ul-A zha (for beef 25%) (3) 0.400Total Beef (1+2+3) 1.603
Sheep 3.757 25.00 0.094
YS Sheep 1.136 16.56 0.019
Goat 9.634 20.83 0.201
YS Goat 2.293 11.88 0.027
Mutton fr om Slaughtered An imals (1) 0.341
Mutton fr om Feed Lot (2% of total) (2) 0.012
Mutton fr om Eid-ul-A zha (40%) (3) 0.236
Total Mutton (1+2+3) 0.588
Total Meat 2.192
9.4 Trends in Red Meat Production
The information on the trends of meat production is presented in Table 16. The meat production
has increased from 1.10 m. tones in 1986 to 1.49 m. tones in 1996 with an annual growth rate of3.07% and further increased to 1.956 m. tones in 2006 with a growth rate of 2.76%. The current
meat production in 2008-09 is 2.19 m. tones. The beef production is growing faster than mutton
production in the country (Table 16 and Figure 11).
Table 16: Trends in production of meat and annual growth rate
Products
Year Annual Growth Rate (%)
1986 1996 2006 2008-09 1986-96 1996-06
Red Meat Total 1101 1490 1956 2191 3.072 2.759
Beef 567 889 1174 1601 4.600 2.820
Mutton 534 601 782 590 1.189 2.668
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9.5 Cost of Production of Meat
The information of cost of production of beef is presented in Table 17. To get a representative
estimates a 12 month old beef animal is taken. The farm gate price of the beef animal with an
average live weight of 171.6 kg including the transportation charges is Rs.12277/head. Cost of
production of beef was Rs.171.77 per kg. Income including manure was Rs.130.12 per kg. Lossof production of 1 kg meat at general farm level was Rs.40.65 (Table 17).
Table 17: Cost of production of beefItems Unit Quantity Rate(Rs) Amount
Produce
12 month old animal 1 12077 12077
Manure 40 kg 25 8 200
Out Put 12277Ave. Live Weight at Sale Kg 171.6
Ave. beef @ 55% of Live weight Kg 94.4
Sale Price Beef Rs./Kg 128
Costs:Green fodder @ 10 Kg per Day 40 kg 91.25 40 3650
Dry fodder @ 1 Kg per Day 40 kg 18.25 120 2190
Vet medicine 2 30 60
Calf 1 4000 4000
Interest @12.5% on average value 1238
Labor @ 1 man day for 20 calf Days 22.8125 200 4563
Equipment costs 100 100
Interest on shed and space+depreciation on shed 312.5 313
Variable cost 12113
Total cost 16113
Gross Margin/Head Rs./Anaimls 165
Net Income/Head -3835
Cost of Production of Beef Rs./Kg 170.77
I ncome (I ncluding manure Value) Rs./Kg 130.12
Retur n Rs./Kg -40.65
9.5.1 Cost of production of mutton
567 889 11741601
534 601 782590
0%
20%
40%
60%
80%
100%
1986 1996 2006 2009
000
Tonnes
Year
Figure 11: Trend of Red Meat Production
Mutton
Beef
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The cost of production mutton at generally farm level is estimated at Rs.269 per Kg. the
estimated gross margin is Rs.806 per head with net income of Rs. (-) 194 per head for a 6 monthold mutton animal. The sale price of mutton at farm level is Rs. 250 which generally keeps
farmers at a loss of Rs. 18 for producing a Kg of mutton (Table 18)
Table 18: Cost of production of muttonMutton Unit Quantity Rate(Rs) Amount
Produce
YS 6 month old 1 2700 2700
Manur 40 kg 1.25 8 10
Out Put 2710
Ave. Live Weight at Sale Kg 24.0
Ave. beef @ 45% of Live weight Kg 10.8
Sale Price murrton Rs./Kg 250.0
Costs
Green fodder @ 3 Kg per Day 40 kg 13.6875 40 548
Dry fodder @ 0.15 Kg per Day 40 kg 0.45625 120 55
Vet medicine 1 30 30Calf 1 1000 1000
Interest @12.5% on average value 204
Labour @ 1 mand day for 20 calfs Days 3.65 200 730
Equipment costs 25 25
Interest on shed and space+depreciation on shed 312.5 313
Variable cost 1904
Total cost 2904
Gross Margin/Head 806
Net Income/Head -194
Cost of Production of mutton Rs./Kg 269
I ncome (I ncluding manure Value) Rs./Kg 251
Return Rs./Kg -18
9.5.2 Cost of production of beef at feed lot framers
During the recent years feed lot fattening is also gaining popularity among the progressivefarmers and there is also shift towards rearing meat animals against the previous practice of
producing beef as a by product of dairy animals and draft animals. There was