Study on Cattle Markets in Kosovo. (March April 2004)

Transcription

1 Study on Cattle Markets in Kosovo (March April 2004)

2 Table of Content Executive Summary... 3 Introduction... 4 General Background... 4 Objectives of Study... 6 Methodology...6 Sampling Methodology... 7 Results... 9 Assessment of Cattle Markets...9 Farmers knowledge...12 Conclusions and Recommendations Annex Annex II... 38

3 Study on Cattle Markets in Kosovo Executive Summary UBO Creations was assigned by Caritas Switzerland to conduct a market study on the Kosovo cattle market. The purpose of the study was to gain more knowledge on factors and quality expectations influence price mechanism in Kosovo livestock markets. After a first survey conducted in three different livestock markets (Gllogovc/Drenas; Malisheva; and Prizren ) the second survey assessed farmers knowledge on how to fetch better prices for their animals. Data analysis shows that farmers see cattle production as a valuable sector to invest and increase production. High rates of successful transactions at livestock markets indicate that this sector enjoys good trading conditions and potential for further growth. Farmers do have sufficient knowledge on the most important factors influencing price mechanism and try to profit by planning production accordingly. However, old-fashioned stables and insufficient financial resources account as major obstacles to increase production. Farmers interest in receiving loans is strongly voiced without ignoring the need for extension services. The report cites two major recommendations stated by the farming community, including increased direct support for farmers and a stronger coordinated co-operation with Government institutions to effectively improve the livestock industry.

4 Introduction Kosovo s livestock sector is changing rapidly. These changes require major adjustments, to the role of institutions which play in supporting livestock markets so that poverty reduction, environmental sustainability, and food security can be achieved effectively. The rehabilitation of animal husbandry has been a primary goal of Caritas Switzerland. Since 2000 they have imported over 600 heifers of the Tyrolean Grey Cattle Breed. In 2003 Caritas supported the establishment and development of a local breeding association, called Graufi Breeders Association. The main purpose of this cooperation is to support and organize Graufi breeders to improve income generation with animal husbandry. Breeding associations must focus on comparative advantages, which their particular breed has over other breeds so that higher prices may be fetched at cattle markets. There is little information on factors influencing price mechanism in Kosovo cattle markets. Neither is it clear whether farmers have a particular knowledge on how they can benefit and influence these factors. This report is the result of a market study assignment, which UBO Creations received from Caritas Switzerland, with the aim to generate further know-how on Kosovo cattle markets. General Background Agriculture is one of the biggest economic activities in Kosovo. During 1995 it represented 30% of Kosovo s GDP, or 35% with forestry and food processing included. It also played an important role regarding

5 employment. In 1998, 60% of the population was employed in this sector 1. Over the past decade this sector has undergone profound changes. Prior to 1990/91, Kosovo s cattle industry could be clearly defined as an industry consisting of two sub-sectors: the Government owned sector, producing at a commercial level comparable to the rest of Europe; and a peasant private sector based on small herds, producing mainly for home consumption and sale of surpluses. However, civil unrest and war had a profound impact on this market, bringing agricultural production to a standstill in Across the sector, access to farm inputs remains limited. Crop and livestock yields are low. There has been little investment in irrigation infrastructure except for basic emergency repairs. The Government owned sector does not operate anymore. In today s livestock industry only the private sector functions. Agricultural production and agro-processing, which contributed significantly to preconflict GDP and employment, suffered more than 50% loss of livestock and other assets. At least two cropping seasons were lost. 2 The number of livestock dropped as a result of looting, killing and destruction, which followed the 1999 war. The rehabilitation of Kosovo s agriculture after a decade of neglect and negative effects is therefore a priority for the administration in Kosovo. However, insufficient reliable data on the rural economy and agriculture has hampered adequate programming and targeting of emergency and post emergency interventions and now poses a serious obstacle

6 Objectives of Study Due to the lack of information on Kosovo s cattle markets and price mechanism which farmers may use for their production, Caritas Switzerland decided to finance further market research. The first objective of this study is to get an overview of the cattle market situation in Kosovo. This study, however, does not cover the entire Kosovo market, but was undertaken in four municipalities: Gllogovc/Drenas; Malishevo; Dragash/Sharr and Prizren. The second objective of the study is to test farmers knowledge on how to fetch higher prices when producing and selling live animals. As mentioned above, it is unclear whether farmers know how to profit from factors influencing animal prices at markets. The study looks at the current price situation, and identifies the main criteria for setting the price of the cattle and how they influence price level. A third objective of this research is to collect data on production costs for cattle production. The survey aims to screen farmers situation on production methods and production costs. Methodology To carry out this task UBO Creations chose a quantitative consumer survey approach. Consumer surveys are tools commonly used to gain an overview of a particular market or economic sector. Data was collected using a questionnaire administered through personal interviews. Respondents were divided into two groups. One group included market participants (buyers and sellers) whilst the second one consisted of farmers. The interviews were conducted directly at their farms. All of the responses can be quantified.

7 The following topics were covered in the survey: o Identifying the participant (buyer/seller, farmer, municipality, number of cattle, etc.) o Identifying market locations o Estimation of the number of cattle offered and sold at the market o Methods of setting the market price for cattle o Seasonal effects at the cattle market o Factors influencing price level for cattle o Farmers plans to expand o Identifying advantages and barriers for farmers o Plans and needs for financial instruments o Use of labour force Copies of the questionnaires are included as Appendix One. Sampling Methodology Since we did not have a list of all livestock sellers, farmers and buyers, we used random selection criteria to choose our respondents. We conducted interviews with different sellers, especially with those who had extensive knowledge on livestock markets. Our research concentrated in four municipalities: Malisheva, Gllogovc/Drenas, Prizren and Dragash/Sharr.

8 Table 1. Structure of Market Participants Municipalities Buyers Sellers Total Prizren 28% 72% 100% Gllogovc 39% 61% 100% Malisheve 33% 67% 100% Dragash* Note 1:* Dragash municipality does not have an organized active livestock market. Table 1 shows the relative participation of sellers and buyers in each municipality. From and overall analysis, Prizren has the highest percentage representation by 64%. Malisheva is represented with 15 % and Gllogovc with 21%. Farmers interviewed were chosen from three different villages in each of above municipalities. Table 2. Structure of interviewed Farmers Municipality Village Nr. of interviews Gllogovc Terstenik 3 Llapushink 3 Çikatovë 3 Malishevë Drenoc 3 Banja 3 Pagarush 3 Prizren Korish 3 Reçan 3 Jabllanic 3 Dragash Krusheva 3 Bresan 3 Bellobrad 3 Total 36

9 To ensure that all minorities groups of these regions were represented, we deliberately picked villages that are inhabited by Boshnjak and Goran farmers. Therefore, we have four municipalities represented at the equal stake by 25%. Results As stated earlier we divided research into two parts: 1) Assessment of the Cattle Market, and 2) Farmers knowledge. Assessment of Cattle Markets The cattle markets in all four municipalities had different trading volumes. Malisheva had the largest market with more than 500 cattle offered for sale. Prizren also had a big trading volume with more then 300 cattle. The Gllogovc market had a considerable lower volume with about cattle available for sale. Dragash did not have an organized cattle market. Assessments revealed that a high percentage of cattle offered are actually sold. Collected data reveals that Malisheva has a larger rate of transaction where about 80% of cattle offered are sold. We found that local breeds (busha) enjoy a high demand with exception of Prizren where the Simmental breed is preferred. Figure 1 presents the percentage of cattle sold which were brought to the market each week.

10 120% 100% 80% 60% 40% 20% 0% Gllogovc Malisheva Prizren Calves Young Bulls Heifers Bulls Cows Figure 1. Percentage of cattle sold It is interesting to note in all four municipalities that prices of different animal categories remain on a similar level, with exception of heifers of foreign breeds (Simmental and Swiss). An important observation made is that imported heifers fetch a higher price because farmers expect higher level of milk production. The Brown Swiss breed in particular seems to be known for producing more milk Calves 1.5 Young Bulls 1.0 Heifers Domestic Simmental Swiss Bulls Cows Figure 2. Price of livestock offered in the market

11 Table 3 shows that an increase of trade occurs during winter and spring. It is important to note the increase in sales of bulls in winter, mainly caused by higher meat consumption. More cows are sold in spring and summer because of the advantage of outside grazing % 60.00% 40.00% 20.00% 0.00% Spring Summer Fall Winter Calves Young Bulls Heifers Bulls Cows Figure 3. Transactions according to the seasons The main reason for selling/purchasing cattle is meat consumption, stated by 26% of the respondents. Second most important reason for selling is the lack of feed especially in winter and spring season. An important reason for buying cattle in spring is better weather conditions and the possibility of outside grazing. The least mentioned reason for selling/purchasing cattle is milk production. 35% 30% 25% 20% 15% 10% 5% 0% Spring Summer Fall Winter Milk production Outside feeding Lack of feed Meat consumption Figure 4. Reasons of cattle sale according to the seasons

12 Figure 5 illustrates the priority of factors effecting price determination for cattle. It is clearly visible that beefiness (corpulence) is the most frequent response for all types of cattle. The second most important factor determining price is the weight of animal. Buyers and sellers pay also close attention to the health condition of the animal, which is therefore ranked as third most important factor. The age of the animal another plays a crucial role in price determination. It is interesting to mention that crucial factors are pregnancy with heifers and accompanying calves with cows Beefiness Weight 10 Healthy 5 Age 0 Calves Young Bulls Heifers Bulls Cows Figure 5. Factors influencing the price of cattle Farmers knowledge As explained in the chapter on methodology, farmers represent the second group of the study. The total number of interviewed farmers is 36. Since our research was conduct in the four municipalities Gllogovc, Malisheve, Prizren and Dragash the interviewed farmers were from those areas, too.

13 Table 3. Size and type of cattle owned by farmers Race Calves Young bulls Heifers Bulls Cows Gllogovc Domestic 47% 50% / 48% Imported 53% 100% 50% / 52% TOTAL 100% 100% 100% / 100% Malisheva Domestic 60% / 29% / 53% Imported 40% 100% 71% / 47% TOTAL 100% 100% 100% / 100% Dragash Domestic 82% 89% 50% / 72% Imported 18% 11% 50% / 28% TOTAL 100% 100% 100% / 100% Prizren Domestic 82% / 100% / 26% Imported 18% / / / 74% TOTAL 100% / 100% / 100% TOTAL Domestic 69% 73% 45% / 53% Imported 31% 27% 55% / 47% From the table above we see that farmers in Kosovo predominantly own local breeds. However, we observed that a reasonable number of farmers acquired imported cattle, indicating a shift of preference. The reason for this change is that imported cows have a higher milk production capacity. For dairy farmers this is one of the most important factors when selecting a cow. Table 3 clearly shows this occurrence. Another issue looked at during our research were farmers plans to increase their production capacity. From the answers we got, most of them were very positive in this matter. This can be illustrated best with the following chart.

14 120% 100% 80% 60% 40% 20% 0% Gllogovc Malisheva Dragash Prizren Yes No Figure 6. Plans for production increase Some exception regarding this issue was found with farmers from Dragash region. Farmers in Dragash, especially from minorities, have shown signs of hopelessness about future prospects of farming business in Kosovo. Production increase was mostly planned to be achieved through an increase of imported cattle. Table 4 indicates that farmers intentions are obviously very decisive. The overwhelming preference for imported cattle demonstrates their plans in the best way. Table 4. Category and origin of cattle planned to be increased Race Calves Young Heifers Bulls Cows bulls Gllogovc Domestic / Imported 100% 100% / 100% Malisheva Domestic / / 6% Imported 100% 100% / 94% Dragash Domestic Imported 100% 100% 100% Prizren Domestic 11% Imported 89% TOTAL Domestic 0% 0% 0% 4% Improved 100% 100% 100% 96%

15 There are different ways on how farmers in Kosova sell and purchase cattle. We analyzed five of them: 1) Livestock Market; 2) Slaughterhouse; 3) Butcher; 4) Delivery to trader; and 5) Trader at the farm gate. The most popular method is trading at the livestock market, was the most popular one. 83% of the respondents stated that they do the selling/purchase of their cattle at the livestock market. The second most popular response was Trader at the farm gate, which represented 58%. This means that interested traders go directly to the farmer s gate and buy the animal from them (table 5). Table 5. Preferred ways of selling/purchasing cattle Market Slaughterhouse Butcher Farmer sells to trader Trader at the farm gate Gllogovc 100% 11% 11% 22% 67% Malisheva 100% 0% 33% 44% 89% Dragash 56% 0% 56% 22% 67% Prizren 78% 11% 0% 0% 11% TOTAL 83% 6% 25% 22% 58% Farmers in Dragash and Malisheva are better aware of increasing their chances to fetch higher prices. Waiting for the right season is the prefered approach. Achieving optimal animal condition is also shown to be an important objective used by farmers to get a better price for their cattle.

16 Table 6. Approaches used to get a better price Right Season Bargain Optimal animal condition Livestock market Cooperate with other farmers Gllogovc 67% 11% 67% 33% 44% Malisheva 33% 100% 89% 11% 33% Dragashi 100% 89% 100% 67% 67% Prizreni 22% 11% 22% 22% 22% TOTAL 56% 53% 69% 33% 33% 100% 80% 60% 40% 20% 0% Classical Stable Modern Stable Gllogovc Malisheva Dragash Prizren Figure 7. Methods of cultivating cattle From the responses we see that an old fashioned traditional stable is the most frequent method farmers keep their animals. Data shows that in Gllogovc region more farmers upgraded their stable than in other regions surveyed % 80.0% 60.0% 40.0% 20.0% 0.0% Gllogovc Malisheva Dragashi Prizreni Feed Labour Force Fuel Veterinary Services Other Figure 8. Factors influencing breeding costs (average per year in %)

17 When we asked farmers to estimate their average costs of feeding and keeping cattle, we received answers illustrated in the above chart. Figure 8 shows that feeding expenses are the leading factors effecting costs of cattle breeding. It is also evident that substantial costs are associated with labor force. It is interesting to note that costs occurred from veterinary services range between 4-10% Calves Colt Mule Bull Cow Figure 9. Estimation of cash expenses per cattle in Euro Figure 9 illustrates estimated of average cash expenses per cattle and year. We see that cows lead the chart with per year, followed by calves with per year. The least expensive category to grow is heifers between six and two years of age. 100% 80% 60% 40% 20% 0% Hired outside Family Outside and family Figure 10. Use of labor force on farms From the above chart we see that farmers use mostly labor force from their own family to keep their animals.

18 120% 100% 80% 60% 40% 20% 0% Yes No Gllogovc Malisheva Dragashi Prizreni Figure 11. Farmer s interest for loan Figure 11 shows that almost all farmers interviewed expressed interest in receiving a financial loan. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 25% 36% 86% Short-term ( up to 1yr.) Mid-term (1-3yrs) Long-term (more then 3yrs.) Figure 12. Type of loan 86% of the farmers interviewed have stated that they are interested in long-term loans. 36% of them preferred mid-term loans, whilst about 25% of farmers in Dragash expressed interest in a short-term loan.

19 100% 80% 60% 40% 20% 0% Purchase cows Purchase feed Stable and equipment Other Figure 13. Purpose of the requested loan The main purpose for the loan is previewed for stable and equipment; followed by the purchase of more cows and cattle feed. 70% 60% 50% 40% 30% 20% 10% 0% 31% 56% 61% 61% 19% Permanent Consultation Professional Technical Financial Other Figure 14. Expected support from the farmers association When we asked farmers what their expectations are from farmers associations, 61% of them stated that they expect financial and technical assistance. 56% of the respondents stated that they would like to benefit from specific extension services, whilst 31% of them said they would be interested in benefiting from regular services and infrastructures.

20 Conclusions and Recommendations Conclusions 1. Price of the cattle maintained a similar level in all four municipalities. 2. Imported heifers fetch a higher price because of higher milk production. 3. More Cattle are sold in winter and spring season 4. Main reason for selling/purchasing is for meat consumption. 5. Beefiness is the most important factor, which determines the price of the animal, followed by weight as the second factor. 6. The majority of farmers have expressed intentions to increase production. 7. Production growth is preferably planned with imported breeds. 8. The most popular method to sell/purchase cattle is livestock market, followed by traders at the farm gate. 9. A Selling/purchasing of cattle in the right season is the most frequent approach used by farmers to receive a better price. 10. The majority of farmers keep their animals in the old fashioned stables. 11. Feeding expenses were mentioned as leading cost factor. 12. Most of the farmers interviewed showed interest for a long term loan. 13. Preferred purpose of loans is for stable and equipment.

21 Recommendations Other than analyzing data, the survey helped to identify benefits expected by farmers. Based on their answers our recommendations fall into two groups: - Increased direct support to farmers - Stronger cooperation between Governmental institutions 1. Increased direct support to farmers Farmers associations can support members directly by providing them technical and financial support. Technical support - includes activities such as: extension services on working conditions and working methodology. Framers have shown a low level of technical knowledge of new and efficient ways to cultivate cattle; therefore it is necessary for and active support to improve this situation. Financial support - involves creating access to different financial instruments, and managing current assets. From the survey it was clear that farmer s are eager to increase their capacity. It is essential to assist them in acquiring better knowledge of the financial instruments and what are the best possibilities for them. 2. Stronger cooperation between Governmental institutions Government institutions need to have stronger co-ordinate in order to provide effective support and improve current infrastructure for farmers. It is necessary to create a favorable climate for the farmers to breed cattle in Kosova, as this is one the few sectors that have a bright future. Farmers have stated that they need continuous professional assistance, improving the infrastructure and providing extension services that are crucial for their success.

22 Annex 1 Table 7. Cost of production per cattle in average per year: (in %) Calves Young Bulls Heifers Bulls Cows Municipality in % in % In % In % in % Gllogovci Feed Labor Force Fuel Veterinary Services Other expenses Total Malisheva Feed Labor Force Fuel Veterinary Services Other expenses Total Dragash Feed Labor Force Fuel Veterinary Services Other expenses Total Prizren Feed Labor Force Fuel Veterinary Services Other expenses Total Total Feed Labor Force Fuel Veterinary Services Other expenses Total

23 Table 8. Estimation of number of cattle for sale in a market in a specific market day within municipalities Calves Young Bulls Heifers Bulls Cows Municipality Total Sold Total Sold Total Sold Total Sold Total Sold Type of cattle Piece In % Piece In % Piece In % Total In % Piece In % Gllogovci Domestic (busha) Simental Hollstein Swiss Other Total Malisheva Domestic (busha) Simental Hollstein Swiss Other Total Prizren Domestic (busha) Simental Hollstein Swiss Other Total Total Domestic (busha) Simental Hollstein Swiss Other Total

24 Table 9. Factors that influence the setting of price, according to the cattle category Priorities Calves Young Bulls Heifers Bulls Cows Priority In % Priority In % Priority In % Priority In % Priority In % Domestic Simental Hollstein Swiss Sex Age Weight Beefiness Milking cows Breeding cows Health Cows with calve Cows without calve Veterinary certificate Other TOTAL

25 Table 10. Number of cows according to the category that interviewed farmer possess Municipa lity Type of cattle Calves Young Bulls Heifers Bulls Cows Domestic ( busha ) nr. % nr. % nr. % nr. % nr. % Imported Gllogovc Simmental Holstein Swiss Other Total Domestic ( busha ) Imported Simmental Malishev Holstein Swiss Other Dragash Total Domestic ( busha ) Imported

26 Simmental Holstein Swiss Other Total Domestic ( busha ) Imported Simmental Prizreni Holstein Swiss Other Total Domestic ( busha ) Imported Simmental TOTALI Holstein Swiss Other Total

27 Table 11. How do you sell your cows 1. In the market 2.Farmer takes them to slaughterhouse 3.Butcher buys them at the farm 4.Farmer sells them to a trader 5.Trader buys them at the farm Yes No Yes No Yes No Yes No Yes No % % % % % % % % % % Gllogovc Malisheva Dragash Prizren T O T A L I

28 Table 12. What kind of support do you expect from farmers Permanent consultation Professional Assistance Technical Assistance Financial Assistance OTHER YES NO YES NO YES NO YES NO YES NO % % % % % % % % % % Gllogovc Malishevë Dragash Prizren Total

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38 Annex II Table 1. Structure of Market Participants... 8 Note 1:* Dragash municipality does not have an organized active livestock market... 8 Table 2. Structure of interviewed Farmers... 8 Figure 1. Percentage of cattle sold Figure 2. Price of livestock offered in the market Figure 3. Transactions according to the seasons Figure 4. Reasons of cattle sale according to the seasons Figure 5. Factors influencing the price of cattle Table 3. Size and type of cattle owned by farmers Figure 6. Plans for production increase Table 4. Category and origin of cattle planned to be increased Table 5. Preferred ways of selling/purchasing cattle Table 6. Approaches used to get a better price Figure 7. Methods of cultivating cattle Figure 8. Factors influencing breeding costs (average per year in %) Figure 9. Estimation of cash expenses per cattle in Euro Figure 10. Use of labor force on farms Figure 11. Farmer s interest for loan Figure 13. Purpose of the requested loan Figure 14. Expected support from the farmers association Table 7. Cost of production per cattle in average per year: (in %) Table 8. Estimation of number of cattle for sale in a market in a specific market day within municipalities Table 9. Factors that influence the setting of price, according to the cattle category Table 10. Number of cows according to the category that interviewed farmer possess Table 11. How do you sell your cows Table 12. What kind of support do you expect from farmers... 28