Feasibility and Marketing Strategy for: Goat Fattening and Rearing

1. Introduction
Businesses associated with livestock, in particular goat fattening, breeding, trading of animals, milk products, and poultry farming emerged as high potential in all 10 of the villages visited during this study. Milk and meat are a substantial part of the diet in this region, and practically all households are traditionally engaged in keeping small animals for their own consumption. However, currently, this project s target group is not undertaking livestock as an enterprise or business . In terms of goat fattening and rearing, the breed that is currently cultivated is called Barbari , which is a local non-descriptive breed with a fairly low reproduction capacity. According to livestock experts in Abbotabad and Mansehra, two other breeds i.e. Beetal and Khagani should be introduced in the area, and cross breeding with Barbari should be encouraged for a more sturdy animal with a high average reproductive rate. According to expert opinion, Kaghani can survive in the valley of Hazara districts and surrounding areas of KPK. These goats are large in size with white, gray, brown or black body coat. Their meat conformation is considered to be medium to good. Kaghani goats yield a good crop of long hair (per head/year 2 kg), with an under coat of cashmere wool used for expensive pashmina fabrics. This feasibility focuses on a 15-month cycle of buying, fattening, rearing, and trading of Khagani goats, where the female entrepreneur would begin with a unit of 12 female goats, where the local Business Development Service Provider (BDSP) would facilitate the breeding of these goats as a paid service.

2. Target Market
According to the survey, goat meat is in high demand amongst the middle-income households in the villages, currently available at Rs. 425-450 per kg. Goat milk is also popularly consumed, and hence in significant demand. Goats are also in constant demand in the neighboring markets of Abbottabad and Nathiagali, given the tourist and hotel business in the area. Just prior to Eid-ul-Azha, there is a significant demand for goats in the Rawalpindi market as well. In the 10 villages visited during this study, it is clear that most targeted households meet their own requirements for meat and milk. There is insufficient surplus of goats or goat milk to allow for assertive marketing of the product. A few interviewees did indicate that they, or people known to them, purchase goat kids from Haripur mandi, and then sell the fattened goat in that same mandi after 9 to 10 months.

3. Technical Feasibility
Technical Aspects Climate Grazing/Vegetation Status Ok Ok Reasons Barbari and Kaghani can survive in all areas of Hazara Grass, trees and dry fodder are available in the area, as is feed in the markets of Abbotabad The amount needed is available locally

Water availability

Ok

Overall suitability

Ok

4. Required Resources
Inputs required for this business include procurement of kids/goats, fodder/feed, veterinary medicine, shed, etc. An assessment of the resources is as follows: Kids/goats are available from the livestock market/mandi in Mansehra, Peshawar and Rawalpindi. Over a 2-3 year time period, it would be possible for the Project to support a local BDSP who would initiate a small market/mandi for the supply of kids/goats within each village, thus acting as a consolidator. Locally grown trees, dry fodder, and corn constitute the major source of food for the goats. Goats are easy to feed on vegetable peels and leftover food. The Project can contribute to developing more nutritious feed for goats by working with local BDSPs, who can introduce a local version of the Khal available in bigger markets such as Abbotabad. The advantage of rearing/fattening goats is that this does not demand a full time involvement, and hence women can be engaged in other activities while benefitting from this activity. However, the women associated with goat rearing and fattening must PERCEIVE it as a business. It is proposed that all the women in the village who set up this business come together as a group , to do the following: Human Resource y Obtain technical training y Buy inputs together y Learn and solve problems together y Sell together While independent, each of the women would be a part of the group, so as to benefit from nd rd economies of scale. In the 2 or 3 year of business, these women would be encouraged to form an Association that would assist other women to start such a business, and link up with similar Associations in other villages. A goat would need three types of vaccines i.e. FMD, ETV, CCPP and de-worming at least twice in a year. While such medicines are available in the Abbotabad market (e.g. Meezan Veterinary Services near Mezaeel Chowk), it would be critical to create a local service that is both affordable and accessible by the women. Through appropriate training and support, a local Business Development Service Provider (a male or female) would be trained as a veterinary, and given support to establish a medicine and input supply shop. The basic veterinary training would be for a duration of 1 month, followed by another 2 months advanced training. A normal locally made shed is sufficient for the animals especially in winter season. A bucket and fodder tray is needed to provide the goats with water and fodder, easily available in the local market, or bought from the Abbottabad market.

Kid/Goat

Fodder and Feed

Medicines

Shed/Chappar Bucket and Fodder tray

5. Cost Estimation

Description Capital Cost: Goats Bucket-large Fodder tray-wooden Total capital cost Recurring Cost: Feed - Khal Labor one person Transportation Vaccination/med/vet Depreciation: Bucket (1 years life) Fodder Tray (4 years life) Total Recurring Cost Total Cost of Project

Units

Rate

Months

Amount

12 1 2

12,000 500 1,500

0 0 0

144,000.00 500.00 3,000.00 147,500.00

3 bag 4 hours/day 1 12

1,200 40/hour 500 1000

12 12 12 1

43,200.00 57,600.00 6,000.00 12,000.00

1 2

500 31

1 12

500.00 744.00 120,044.00 267,544.00

6. Estimated Income
It is estimated that the entrepreneur would be able to generate an income from the 6th month onward, initially from milk while in 13th month 6 cubs will be sold. Month 6 7 8 9 10 11 12 13 Description Milk Milk Milk Milk Milk Milk Milk Milk Kids/Goats Units 18 kg 18 kg 18 kg 18 kg 18 kg 18 kg 18 kg 18 kg 18 Rate 30/kg 30/kg 30/kg 30/kg 30/kg 30/kg 30/kg 30/kg 7,000 Days/Mth 30 30 30 30 30 30 30 30 Total Amount 16,200.00 16,200.00 16,200.00 16,200.00 16,200.00 16,200.00 16,200.00 16,200.00 126,000.00 255,600.00

7. Estimated Profit
Total Income Total Recurring Cost Profit 255,600.00 120,044.00 147,500.00

Note: It is estimated that a 12-goat unit would generate, over a period of 13 months, a total income of Rs.194,400, i.e. Rs.57,600 as labor and Rs.136,800 as profit. This works out to an average income of Rs. 14,953/month, with a profitability analysis as follows: a. Return on Sales: total profit/total sales x 100 = 53.57% b. Return on Investment: total profit/total investment x 100 = 51.37%

8. Risk Assessment & Mitigation

Risks Risk Mitigation Strategy A strong veterinary service is a must for the area. The Project could explore the possibility of introducing insurance coverage for the animals, or having a system whereby the group members insure and protect each other s asset. Proper vaccination and an expert local veterinarian or BDSP. Women are trained in providing proper nourishment to the animals, and ensuring that they have adequate warmth and care.

Mortality Diseases Extreme weather

9. Marketing Strategy
While this business is clearly profitable in financial terms, the Project must support the entrepreneurs to evolve a long-term and sustainable marketing plan. A SWOT (Strength-Weakness-Opportunity-Threat) assessment of the Project is as follows: Strengths  Women s previous knowledge and experience in goat rearing  Great demand of meat/goats in local and nearby markets  Government s focus on livestock and dairy  Enabling environment and atmosphere Weaknesses  Lack of Transportation  Lack of in-depth technical knowledge about goat fattening  Initially unavailability of veterinary service Opportunities  Outlet at Nathiagali  Hotels in Nathiagali  Direct supply to hotels and collective selling on Eid  High local demand for meat Threats  Diseases  Harsh Weather

Above analysis shows a greater potential in goat fattening and breeding business. There is a need to overcome the weaknesses and increase the strengths, since opportunities and threats are external factors so they would be considered when finalizing the overall strategy. The marketing mix for livestock-goat fattening and breeding includes the following: a. Product There are two potential products in goat farming i.e. milk and meat. Goat milk is not in high demand externally. However, it is a popular home consumption item within the village. The Project would therefore focus on farming goats. The major products for sale would be the kids, or a ready goat for sacrifice (e.g. during Eid). In later years, the women could also diversify and learn how to cook meat for long-term storage, which could then be sold in cold climatic areas as a product itself.

The production (of goats) would be in small units, which would then be consolidated to create a mass, initially within the village, and later across the village. This would allow for economies of scale, in terms of buying (input supplies) and selling. To ensure that the product itself is of good quality, and the mortality rate is reduced, the Project would support experimentation in creating a breed that is viable for the region, i.e. a cross between Beetal, China Burbery and Kaghani. This cross breed could also become a popular product from the region, and could find a niche in the current goat market. In each village, a Business Development Service Provider (BDSP) would be created , through appropriate training and business inputs, so that the quality of the product can be ensured. The support services would include provision of technical training, supply of inputs such as livestock, nutritious feed and veterinary services in each village. The BDSP could also serve as a consolidator who could sell kids or goats to other markets. b. Place The goats would be reared in the villages of Galiyat-Abbottabad and the primary markets for selling goats are Abbottabad and Rawalpindi. The produce can also be sold to locals on Eid-ul-Azha or other occasions such as weddings etc. A special shop can be created in Nathiagali to showcase these animals for sale. There are different models which can be adopted for this shop e.g. seasonal, weekly etc. c. Price

The government of Pakistan is regulating the livestock sector, thus prices are stable. Mutton is the most expensive meat in the Pakistani market, where one kilo of goat meat can cost approximately PKR 425-450. The prices are high because national demand is not being satisfied by local production, as a large part of local produce is being exported to Middle Eastern markets. The price of the goat would depend on the season and size of the goat. A cub would sell for PKR 500-7000, where as a fully-grown animal can be sold for approximately PKR 1400015000. d. Process

There are five different players involved in the process. The input supplier provides the cubs, medicine and fodder to the farmer. The farmer supplies the goats to the Livestock market from where the butcher would buy goats for the meat shop. A detailed analysis of livestock value chain has been given on page # 33. e. Promotion The farmers from this region should participate in Livestock Shows (Mewashi Melas). This would provide them with an attractive market to sell their products, and also allow them to find attractive markets and promote a new breed. The new breed (Beetal Cross Kaghani) should be displayed in these shows.