A financial cost-benefit analysis of the implementation of a small-camp system in ostrich farming to allow veld restoration

Mugido, Worship (2011-03)

Thesis (MScAgric (Agricultural Economics))--University of Stellenbosch, 2011.

Thesis

ENGLISH ABSTRACT: Before the ostrich industry started in the Klein Karoo region of South Africa in 1863, the veld was used mainly for large and small stock production. Returns per hectare (ha) from large and small stock production are low due to the low carrying capacity of the veld in this region. However, when the veld is utilised predominantly to provide space for breeding ostriches sustained mainly by lucerne-based feed supplements, the limited-feed production capacity no longer determines the long-term stocking rate. The returns, per ha, from ostrich production can therefore be much higher than from sheep, goats and cattle. This has resulted in high ostrich stocking rates, which in turn, has caused degradation to most of the veld to a greater or lesser extent. Driven by a personal conviction to manage the veld sustainably, as well as by a fear of environmental damage connotations for ostrich leather products, which could restrict market access, ostrich farmers in the Klein Karoo, represented by the South African Ostrich Business Chamber (SAOBC), increasingly place an emphasis on veld restoration. The various phases of ostrich production are breeding and hatching eggs to produce day-old chicks, rearing chicks, raising birds, and the final phase of weight addition to slaughter. The phase that is considered in this study is the production of day-old chicks. There are two systems that can be used for producing day-old ostrich chicks, namely, the flock breeding system and the small-camp system. Shifting from the flock breeding system to the smallcamp system will enable the farmer to practice genetic selection. This switch from the flock breeding system to the small-camp system requires the farmer to invest in fencing material. The SAOBC requested a study to determine whether the expected private benefits from moving breeding ostriches to small camps in order to free up the large veld camps for veld restoration would justify investing in these small camps. If this investment is not financially justified, the veld restoration will have to be financed via payment for ecosystem services. Both passive and active veld restoration techniques are considered in this study. Passive restoration requires the farmer to invest in fencing material needed for the erection of the small camps. Active restoration requires the farmer to invest not only in fencing material, but also in soil manipulation and seeding. The main aim of this study is to find out if the private (financial) benefits from the switch to small camps can compensate for fencing costs, without the cost of active restoration, or if the switch to small camps can compensate for fencing costs with the cost of active restoration. Typical farm models were developed for this purpose, and the results showed that the private benefits compensate for the investment cost of fencing material used for passive restoration as well as for restoration of 10% of the veld that is heavily degraded. When the full cost of active restoration of the moderately degraded veld (30%) was added, the private benefits could not compensate for the full restoration cost.

AFRIKAANSE OPSOMMING: Voordat die volstruisbedryf in 1863 in die Klein Karoo ontstaan het, is die veld hoofsaaklik gebruik vir groot- en kleinveeproduksie. Die wins per hektaar van groot- en kleinvee produksie in hierdie streek is laag weens die lae drakrag van veld. Wanneer die veld egter primêr aangewend word vir ruimte vir volstruise wat met lusern gebaseerde rantsoene gevoer word, bepaal die natuurlike drakrag nie meer die belading met volstruise oor die langer termyn nie. Die wins per hektaar uit volstruisboerdery kan dus veel hoër wees as wat met skape, bokke of beeste gegenereer kan word. Dit het hoë belading met volstruise tot gevolg gehad wat vernieling van meeste van die veld tot gevolg gehad het. Gedryf deur persoonlike oortuiging om die veld volhoubaar te benut, sowel as deur vrees dat die vernielde veld die beeld van die volstruisbedryf mag skaad en internasionle marktoegang mag belemmer, het volstruisprodusente in die Klein Karoo, verteenwoordig deur die Suid-Afrikaanse Volstruisbesigheidskamer (SAVBK), toenemend klem begin plaas op veldrestorasie. Die verskillende fases van volstruisproduksie sluit in teling en uitbroei van eiers om dagoud kuikens te lewer, kuikens grootmaak, voëls grootmaak en massa toename tot by slag. Die verskillende fases word dikwels deur verskillende produsente behartig. Die fase waarop in hierdie ondersoek gefokus word is die produksie van dagoud kuikens. Daar bestaan twee stelsels vir die produksie van dagoud kuikens, naamlik tropparing en die kleinkamp stelsel. Die oorskakeling van tropparing na die kleinkamp stelsel stel die produsent in staat om genetiese seleksie toe te pas, maar dit verg investering in omheiningsmateriaal. Die SAVBK het ‘n ondersoek aangevra om te bepaal of die verwagte privaat voordele wat verkry kan word uit die oorskakeling na die kleinkamp stelsel om veldrestorasie moontlik te maak, die investering in die kleinkampe sal regverdig. Indien die investering nie finansieel geregverdig kan word nie, sal verder gekyk moet word na finansiering vanuit betaling vir ekostelsel dienste wat moontlik bevorder kan word deur die veldrestorasie. Die koste van beide passiewe en aktiewe veldrestorasie tegnieke word in hierdie ondersoek gedek. Passiewe restorasie vereis alleen van die produsent om te investeer in omheiningsmateriaal vir kleinkampe. Aktiewe restorasie vereis investering in omheiningsmateriaal vir kleinkampe en betaling vir grondmanipulasie en saad vir die hervestiging van plante. Die doel van die ondersoek is om te bepaal of die privaat (finansiële) voordele van die oorskakeling na kleinkampe kan kompenseer vir die investering in omheiningsmateriaal met aktiewe veldrestorasie en sonder aktiewe veldrestorasie (dus passiewe restorasie). Tipiese plaasmodelle is hiervoor ontwikkel. Die resultate toon dat die privaat voordele wel kan kompenseer vir die omheiningskoste van kleinkampe benodig vir passiewe restorasie en vir aktiewe restorasie van 10% van die veld wat die meeste verniel is. Wanneer die koste van restorasie van 30% van die veld wat matig verniel is, bygevoeg word, is die privaat voordele ontoereikend om die totale restorasiekoste te dek.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/6640
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