Economic potential of small ruminant agribusiness in Southeast Asia

The objective of this study was to investigate the economic potential of small ruminant agribusiness in South East Asia (SEA) by reviewing the role of small ruminants in SEA farming systems, potential demand for mutton in the region, feed resource availability, recent technological improvements, and profitability of small ruminant production. The results indicated that most farmers in SEA practice crop-based farming systems where small ruminants are only a secondary farm activity. The income elasticity of demand for mutton varies from 0.32 in Malaysia to 1.6 in Indonesia. The relatively elastic demand elasticity along with 4.3 percent per capita income growth and 1.7 population growth, project an 8.6 percent annual demand growth for mutton. The growth figures for the various countries are: Thailand 4.5 percent, Malaysia 3.7 percent, Myanmar 2.4 percent and Philippines 2.11 percent. The carrying capacity of feed resources in each country is estimated from its annual dry matter production and dry matter consumption per day of 3.0 percent of body weight for sheep and goats. Myanmar and Thailand have reached their maximum number of ruminant carrying capacity. Indonesia, Philippines and Malaysia still have feed resources available to increase the number of ruminants. Improved technologies available for small ruminant production include a. new crossbreeds of local and imported breeds; b. utilization of economically feasible supplements, c. use of mineral blocks to prevent mineral deficiencies, d. application of anthelmintics to grazing animals to prevent internal parasites; e. improved structure of sheep housing, and f. other improved fundamental sheep handling practices. The profitability studies showed that for a farmer with an initial flock of 8 ewes the net revenue is positive from the second year of production and continues to increase annually. The net present value of the future income from 10 years of sheep production in Indonesia is 5 million Rp. The integral nature of small ruminants in SEA farming systems, recent improved technologies, an increasing demand for mutton, and demonstrated profitability of small ruminant production all provide excellent opportunities for commercial small ruminant development in SEA, especially in Indonesia, Thailand and the Philippines