Deliverable D6.3 Cost benefit analysis of proposed management systems

Objectives

The objective of this report is to assess the economic impacts of alternative feeds and feeding systems on pig and broiler production at the farm level. The analysis includes innovative feedstuffs (WP1), precision feeding systems (WP4), and breeding solutions (WP5) considered across the alternative management systems examined in Task 6.2.

Rationale

The benefits of the alternatives feeding systems for both pig and broiler production are examined through a cost benefit analysis (CBA). The latter is often used to help farmers and policy makers make better informed decisions about the impact of adopting new technologies to enhance the economic performance of the sector. The rationale behind adopting this approach is to discover whether or not it is profitable for farmers to switch to new production systems rather than continue using existing production technologies. To answer this question, measuring and comparing the costs and benefits of new feeding methods helps to determine their potential benefits for the pig and broiler industries. A CBA is performed for each alternative and the results are presented as the impact on farm net income (FNI). The model has been estimated using data from the Farm Accountancy Data Network (FADN) database. Given the fact that the technologies are at an intermediate TRL level, It was not possible to collect “real” cost and benefit data from the project and the empirical analysis relies on “reasonable assumptions” instead. Sample farms specialised in pig and broiler production were selected from five EU countries (Germany, Spain, France, Poland, and Denmark) covering the period 2013-2015. Baseline scenarios were defined to describe the current economic status of pork and poultry production systems in these countries over the last three years. Baseline results allow us to examine the impact of the innovations obtained from WP1, WP4, and WP5. Additionally, a sensitivity analysis was performed to evaluate the impact of new feedstuffs based on different cost scenarios and alternative feeding strategies. The alternative that has the highest benefit would be preferred. The next section presents the methodology that was applied. The results section provides an overview of production costs and margins by country and year and presents the economic performance of farms for different feeding strategies compared to the baseline model.