Developing cattle breeding in Binh Dinh province

036’30” to 109 018’15” East longitude and from 13030’45”to 14042’15” North latitude. It is located in the East of Truong Son mountain range, the North borders on Quang Ngai province, the South borders on Phu Yen province, the West borders on Gia Lai province, the East borders on the East Sea. 2.1.2. Socio-economic situation In the 2001-2016 period, the economic structure shifted towards increasing the proportion of industry, but the pace of transition was slow and did not promote the role of the trade and service sector. After 16 years, by 2016, the proportion of industry and construction increased by 10.14%, trade and services decreased by 2.36%, the agriculture, forestry and fishery sector decreased by 7.79%, accounting for 27.41 % (GDP proportion of agriculture, forestry and fishery of the whole country accounted for 20.58%). The total number of employees working in 2016 is 924 thousand people (accounting for 60.59% of the province's population), in which the workforce in the agriculture, forestry and fishery sector decreased from 74.64% (2001) to 64.70% (2005) and down to 49% (2016); The labor structure in this area of the province is higher than the national average (42% nationwide in 2016). 2.1.3. General assessment Advantages The economic geographic location creates favorable conditions for the livestock products of Binh Dinh to be consumed in the provinces of the South Central Coast and especially the city. Ho Chi Minh City has the largest consumption of food (meat, eggs, milk) in the country. With the conditions of land, climate, and so on, mentioned above, it is quite favorable for the development of the livestock industry, suitable for growing fodder crops and high-yield grass varieties. At the same time, comparing with physiological conditions of tropical animals, it is showed that it is suitable for growth and development. However, the hot climate combined with high humidity (70 - 87%) is less suitable for breeding pure HF dairy cows (grow best at 18 - 200C and 60 - 75% 8 humidity). In addition, it also creates an environment for pathogens to grow and stay, when conditions are prone to disease outbreaks. The time to change from the rainy season to the dry season and the dry season to the rainy season is the time when the weather changes seasons, it is easy for livestock and poultry to get sick if they are not cared for properly. Binh Dinh is one of the few provinces with all types of transportation, convenient for travel and transportation of goods. The location in a favorable geographical position, the intersection of regions: Central Highlands and provinces in the country; Cambodia, Laos and Thailand create favorable conditions to expand economic, scientific and technological exchanges in the country, in the region and in the world. Limitations and difficulties Binh Dinh's terrain is strongly divided and steep, causing many difficulties in infrastructure investment and especially in the arrangement of agricultural production in general and livestock development in particular towards the commodity production in large scale. The province is a convergence of many unfavorable factors in weather and climate: annual floods, storms, droughts, sedimentation, salinity, and so on, which has caused considerable damage to production and life of the people. In recent years, the input and output prices of the livestock industry have always fluctuated in a negative direction for producers, affecting the cost and efficiency of livestock. Average income per person in the province in recent years has increased significantly, but compared to production development requirements, the lives of people, especially in rural areas, still face many difficulties, which has partly affected the investment in production development. 2.2. Research Methods 2.2.1. Approach, research hypotheses and analytical frameworks Approach The research uses a variety of approaches to problem solving. Those are: System approach Approach to development economics Macro approach Regional approach A participatory approach 9 Research hypotheses Hypothesis 1. Cattle breeding in Binh Dinh province has developed rapidly but productivity, efficiency is not high, and value added is low. Hypothesis 2. From a macro perspective: The factors of physical capital, human capital, labor and nature have a positive impact on the development of cattle breeding in Binh Dinh province. Factors such as cattle development policies, infrastructure have quite good influence, development planning, agricultural extension, veterinary and other support services have not had high effects. Hypothesis 3. Micro perspective: Factors of fixed assets, varieties, raw food, annual crop land area of a household, human capital have a positive impact, and seminal food has a negative impact on the development of cattle breeding. 2.2.2. Methods of analysis Research on the development of cattle breeding is an area in agriculture with characteristics associated with natural conditions, so analytical method should be selected accordingly. But this part of the study is mainly qualitative analysis because secondary data only allow such a way. Methods of analysis include: + Method of interpretation inference + Inductive method in deduction + Statistical analysis method Methods of descriptive statistical analysis. Comparative analysis Time series analysis Econometrics model 2.2.3. The method of data collection From the research object, the goals and research methods mentioned above are the basis for determining the necessary data collection methods. It is a method of collecting secondary and primary data. Chapter 3 THE CURRENT SITUATION OF THE DEVELOPMENT OF BREEDING CATTLE IN BINH DINH PROVINCE 3.1. Growth in breeding cattle In general, the growth of cattle breeding in Binh Dinh is quite fast, fluctuating but exceeding the plan. Breeding production capacity has 10 increased rapidly and imbalanced with the ability of infrastructure system, land for breeding, processing capacity, storage and service system for breeding. This is the reason why the growth is mainly in scale but inefficient. Table 3.1. Scale of production value of breeding cattle (Unit: billion dong, 2010 price) 1991 2000 2010 2015 2016 Agricultural production value in the narrow sense 5.076 6.339,2 10.615,5 13.159,4 13.554,2 Production value of cattle 443,8 814,8 2.674,4 3.896,4 4.111,3 Production value of buffaloes 4,0 13,0 28,3 43,3 46,1 Production value of cows 200,3 375,8 816,3 1.347,4 1.405,2 Production value of pigs 236,1 414,8 1.805,7 2.468,9 2.620,9 Production value of other cattle 3,4 11,1 24,1 36,8 39,2 (Source: Binh Dinh Statistical Office and Department of Agriculture and Rural Development of Binh Dinh Province) 3.2. Structure of breeding cattle in Binh Dinh province In the animal husbandry sector of Binh Dinh province, the monitoring of animal husbandry plays an important role. The proportion of this industry is quite high. The production value of animal husbandry was 65.6% in 1991, 66.87% in 2000, 60% in 2010 and 61.43% in 2016. In the period 1991-2010, the proportion of production value of livestock with the trajectory decreased by 5.59% and only -4.18% in 1991-2016. Although the proportion has gradually decreased, but the proportion of cattle breeding still accounts for more than 60% of the total value of livestock production. In the production value of cattle raising, the proportion of cattle and pigs accounts for almost absolute, currently at nearly 98%. Buffalo production is only about 1% and other cattle is less than 1%. The trend of structural change according to production value is showing that the proportion of production value of buffalo production increased 11 slightly, pigs increased rapidly in the period 1991-2016, and the proportion of production value of cattle breeding decreased gradually. Basically, the monitoring structure of Binh Dinh province changes very slowly and the quality of transfer is also low. Coefficients cosφ and angle φ - the angle of structural displacement are very small. From 1986 to 2016, the coefficient cosφ = 0.9999188 and the angle φ = 0.729 degrees. Table 3.6. Changing the proportion of cattle raising in livestock production value in Binh Dinh province (Unit:%) 1986 1991 2000 2010 2016 2010/ 1991 2016/ 1991 Production value structure of breeding industry Production value of breeding industry 100 100 100 100 100 Production value of cattle 67,2 65,6 66,87 60,02 61,43 -5,59 -4,18 Structure of production value of cattle breeding Production value of cattle 100 100 100 100 100 Production value of buffaloes 1,1 0,91 1,60 1,06 1,12 0,15 0,22 Production value of cows 46,6 45,13 46,13 30,52 34,18 -14,60 -10,95 Production value of pigs 52,2 53,20 50,91 67,52 63,75 14,32 10,55 Production value of other cattle 0,1 1,36 0,90 0,95 0,95 0,13 0,18 (Source: Calculated from data of Binh Dinh Statistical Office and Department of Agriculture and Rural Development of Binh Dinh Province) Thus, some of the following assessments can be drawn: The structure and restructuring of production value: Livestock production is the most important production sector in Binh Dinh province, and still accounts for more than 60% of total production value of livestock. This is also consistent with the actual conditions and potential of the province to develop this livestock industry. In the 12 structure of production value of cattle, pig and cow husbandry occupy absolute or major role, buffalo breeding is not significant. The main trend now is that the proportion of pig breeding increases gradually, the proportion of buffalo herds increases slightly and cow raising decreases. Herd structure by locality Structure and restructuring according to the monitoring herd is changing quite positively. There is a trend of forming specialized areas in the province. It is a region specializing in cattle farming and a region specializing in pig farming. The area specializing in cow breeding is in the mountainous districts where there are many potential factors for development. The area specializing in pig production is briefly in the coastal plain districts of the province. The formation of specialized farming areas will be more favorable for the mobilization, allocation of resources and distribution of production in livestock production in the direction of specialization as well as organizing livestock in chains. At the same time, it is also the basis for the development of infrastructure and processing industry. 3.3. Situation of mobilizing and using resources for cattle breeding Firstly, the area of land for cattle breeding has increased but is still quite low, the size of the herds increases much faster than the supply of food. This is an imbalance that will limit development. Secondly, the continuous increase in investment capital for this sector has contributed to strengthening technical facilities and capital efficiency, but the growth has been uneven and investment efficiency is declining. The ability of households to raise capital is high but the gap is quite large, the capital source is mainly equity capital, loans are still very low. Thirdly, labor for cattle breeding has increased in recent years, the quality of labor has improved but is still low, labor productivity has increased, and labor equipment has increased, but the level of labor quality improvement is still slow. 3.4. Organizing production and value chain of cattle breeding Provincial statistics show that the total number of farms in the province in 2011 was only 14 cattle breeding farms and in 2016 was 111 cattle breeding farms. Among them, there are 99 pig farms, the rest are mixed buffaloes and cows. However, most of the production is mixed with no 13 specialized farms for raising cows or buffaloes. Therefore, cattle breeding is mainly under the form of households, farms and farms. The mode of organizing cattle breeding in the past few years in Binh Dinh has mainly been based on the following three modes: Traditional breeding; Semi-intensive breeding; Intensive breeding. 3.5. Situation of consumption market of livestock products Consumption markets include (i) local markets including markets, shops, trade centers and supermarkets in the province; (ii) markets of big cities such as Ho Chi Minh City, Hanoi, Danang and neighboring localities; (iii) exports, mainly to China. Accordingly, the provincial market consumes about 40%. The market of big cities is about 40% and the export market is 20%. 3.6. Actual situation of production results and efficiency of large cattle raising households The common capital productivity of livestock farmers is shown in Table 3.20. The capital productivity of cow breeding is higher than that of pig breeding. Cow breeding households will get 4.27 VND and pig breeding households will get 3.28 VND of production value when spending 1VND. Similarly, the added value per dong in terms of cow and pig production is 3.27 and 2.19 respectively. Combined income per 1 VND cost of cow and pig breeding, 3.22 and 2.10 respectively. Regarding labor productivity, the data on Table 3.20 shows that each cow breeding household member produces VND 48,099.4 thousand GO; 36,838.4 thousand dong of added value and 36,272.2 thousand dong of mixed income. These figures for pig farmers are 48,824.5, 32,565.9 and 31,198.8 thousand VND, respectively. Thus, the labor productivity of cow breeding is higher than that of pigs. Chapter 4 ANALYSIS OF FACTORS AFFECTING THE DEVELOPMENT OF CATTLE BREEDING 4.1 Analysis of factors affecting development of cattle breeding by macro data 4.1.1. Analyzing the effect of influencing factors according to econometric model Capital factor growth will boost the growth of beef production value. The regression coefficient here is +0.3523. 14 This implies that a 1% increase in production capital in this industry will push the production value of cattle breeding to increase by 0.3523%. If labor force is increased in cattle breeding, the growth of production value of beef production will be promoted. The regression coefficients in Table 3.3 suggest that when other factors are constant, if labor in these sectors increases by 1%, production value of beef production will grow by +2.2897%. Human capital has a positive impact on the growth of production value of cattle breeding. The regression coefficient of 0.0427 implies that if other factors are constant, if the proportion of trained workers to workers in this sector, the value of production will increase by 0.0427%. The weather here is quite favorable, so it has stimulated the growth of production value of this industry. This factor has a regression coefficient of +0.34722, implying that a 1% increase in temperature between 26-28 degrees Celsius, the production value growth is 0.3422%. This result also shows that the labor factor, including quantity and quality, is of great significance for the development of this industry. 4.1.2. Other relevant factors Impact of livestock development planning Planning has had an impact on the development of this livestock sector such as ensuring herd growth and herd structure. However, there are still many problems that need to be improved such as improving the quality of planning to form concentrated livestock areas, promoting the development of slaughtering systems. At the same time, the propaganda and planning management must be done effectively. Impact of livestock development policies Thus, basically, the evaluation experts of cattle development policies have had a pretty good impact on the development of this breeding industry. Accordingly, there are basically enough policies for development, which have contributed to supporting livestock breeds and helping to solve capital difficulties. However, the policy has not promoted the expected impact, has not helped to improve the output, develop the processing industry, and has not created a driving force to attract investment in cattle breeding. Impact of infrastructure 15 According to experts, the influence of transport and communication infrastructure is quite good while commercial, slaughtering and processing infrastructure is low. It means that we need to reorient the development of commercial infrastructure to serve well to solve the issue for livestock and focus more efforts to develop infrastructure processing and slaughtering cattle. Impact of agricultural extension work Thus, the work of agricultural extension for cattle breeding has contributed to improve and raise the level of breeding techniques, but it does not guarantee to provide food in accordance with technical standards and ATVS and cut the cost of breeding. Impact of veterinary work Obviously, veterinary work needs to be improved in terms of veterinary medicine management, food standards as well as renovation and construction of breeding facilities and waste treatment systems that meet standards. The impact of other support services Therefore, improving livestock support services is the most important task in which services supporting to find out output and market information are the most important. These services will contribute to help farmers can plan a good and effective breeding strategy. 4.2 Analysis of factors affecting the development of cattle production using micro data The dependent variable of the production value of cattle beeding households Lngo Independent variables Estimated coefficient (I) (II) lngiong 0,11** (0,04) 0,21*** (0,05) lntatho 0,24*** (0,060 0,19*** (0,06) lndtcayhangnam 0,20* (0,10) 0,23** (0,10) lntscd 0,22*** (0,06) 0,18*** (0,06) hh 0,04* (0,02) 0,047** (0,02) DD 0,41*** 16 (0,13) Y-intercept 3,82*** (0,98) 3,35*** (0,95) R- sq 0,4518 0,4518 Breusch-Pagan / Cook-Weisberg test for heteroskedasticity Adjusted by robust command Adjusted by robust command Durbin-Watson 1,116 1,116 Vif < 3 < 3 N 175 175 Prob>F 0,000 0,000 Note: in () is the standard deviation, ***, **, * are significance levels of 1%, 5% and 10% (Source: processed from the author's survey data) The results of these tests show that both estimates are statistically significant, but here the results of the dummy variable DD will be used for evaluation, but will also be compared with the first result. The results can be used to evaluate as follow: Seed cost has a positive effect, the regression coefficient is 0.21, which means that if other factors are constant, when the cost of buying a seed increases by 1%, the production result will increase by 0.21%. This result implies that the higher cost of seed purchase with better quality results in better results, and when compared to the first results it is shown that more experienced household heads will reduce the dependence on the quality of the seed. The cost of raw food has a regression coefficient of +0.19, or positively affects production results, when other factors are fixed, the cost of raw food increases by 1%, resulting in an increase of 0,19%, this also implies a cheaper and more efficient use of breeding by-products. It is better if the way to process primary products is known, and experienced household heads who can take advantage of agricultural by-products will naturally produce higher results. The variable of annual crop area of a household has a positive effect with a regression coefficient of 0.23, so when this area of breeding households increases by 1%, their production results increase by 0.23%. Thus, the increase in annual crop area will increase the availability of food for cattle and boost production results. 17 The value of fixed assets with regression coefficient of +0.18 also shows the positive impact from here and implies that investing in fixed assets such as barns, machinery for breeding will promote output. Human capital has a positive effect and the regression coefficient is +0,047. Thus, the heads of households with more experience and knowledge will have better production results. The dummy variable representing cow breeding is statistically significant with a regression coefficient of 0.41, which implies that when the other factors do not change, the result of breeding production will increase to 0.41%. Chapter 5 ORIENTATIONS AND IMPLICATIONS FOR SOLUTIONS TO DEVELOP CATTLE BREEDING IN BINH DINH PROVINCE 5.1. The context of world big production and the predictions related to development of cattle breeding in Binh Dinh province 5.1.1. Background of cattle breeding in the world Opportunities - Demand for beef products in the world will increase significantly because the population increases from 6 billion people in 2010 to 9 billion people in 2040, the average income per capita increases, especially in developing countries - Governments invest more in agriculture, including livestock in general and cattle in particular, to ensure global and national food and food security. - Demand for high-quality beef products and food hygiene and safety will increase, in fact supply is always insufficient. Challenge - Climate change is very complicated, extreme weather elements appear with increasing frequency, the extent of impact is wide, intense and sudden changes (storms, floods, colds, saline intrusion, drought - heat, etc.) have affected the breeding process as well as the production of cattle food and the physiological activity of cattle. - Epidemic diseases having occurred on a large scale are difficult to control, the virus has always had variants and resistant drugs (typically mad cow disease, foot and mouth disease, etc). Especially, it is difficult to prevent epidemics thoroughly. - Uncontrolled breeding of pigs and cattle centralized farms is the cause of environmental pollution; first of all, production land, water, air, etc. 18 causes costs spent on solving, resulting in increase of product price, so many investors build works for cattle breeding which are cynical or non-operational. - Technical barriers are constantly raised, inspected and supervised, especially the standards and technical regulations on food hygiene and safety, traceability of products. In fact, there have been trade wars for beef products of large markets, - Raw materials for processing cattle food are increasingly scarce and prices continue to rise (by 2050 the price is expected to increase at least 2.0 times in 2010), while low costs continue to decrease. - The area and space for cattle development are narrowed due to the increase of land area converted to non-agricultural purposes, desertification, inundation by sea level rise and saltwater intrusion. 5.1.2. Forecasts related to development of cattle breeding in Binh Dinh province a. Forecast of the production and trade of beef products in the world b. Forecast of domestic animal product consumption market c. Forecast of beef demand in the market of Binh Dinh province d. Forecast of scientific and technological research results and new technical advances applied in the development of cattle breeding in Binh Dinh province till 2020 e. Forecast of climate change affecting cattle breeding in Binh Dinh province 5.2. Orientation for development of cattle breeding in Binh Dinh province 5.2.1. Viewpoint on developing cattle breeding - Making optimal use of potentials, advantages, maximize resources, to promote the role of cattle breeding in agriculture in Binh Dinh, developing beef production in the direction of breeding added value increase and sustainable development, while protecting the environment well. - Applying advanced management process and modern technology in animal husbandry, family farm and industrial farm. - Gradually shifting from small-scale and scattered cattle breeding in households to farm-scale farming with reasonable scales. - Gradually expanding the model of beef production linked to the value- added chain, closely linked and harmonized benefits between farmers, processors and consumers, and between the application of technology 19 with the renovation of production and business management organization, between the development of cattle breeding - slaughtering