COST-BENEFIT ANALYSIS OF SMALL HOLDERS' LAMBS AND GOATS FATTENING ACTIVITY IN ETHIOPIA

The objective of this study is to identify if the subsidized interest rates’ loans from micro-finance institutions in Ethiopia used to purchase and fatten small ruminants (lambs and kids) allow the poor households to substantially increase their annual income. A deterministic cost-benefit analysis of the base line scenario indicates that the proposed fattening scheme would result a satisfactory net present value. The high prices of feed in the country, however, suggest that the fattening calendar is an important variable. The study assess financial and economic benefits arising to the stakeholders of the activity and identifies key risky variables. This analysis points out that in the context of pro-poor interventions the loan schedule should be tied to the nature of the activity financed by the loan. The study proposes the suitable loan structure for the examined activity. High prices of commercial feed products along with the low scale of the activity do not allow the feeding scheme based on the highly nutrition commercial feed products. The study therefore is based on the free grazing feeding scheme with a limited quantity of supplementary feed.