AN ECONOMIC STUDY FOR PROFIT MAXIMIZATION FROM RAISING COWS IN THE NEW VALLEY GOVERNORATE, EGYPT

Abstract

Livestock production constitutes an essential pillar of agricultural development in the New Valley Governorate, which is characterized by large areas used as pastures that help develop livestock. The livestock in the New Valley Governorate are cows, buffaloes, sheep, goats and camels. The total livestock wealth in the New Valley Governorate is about 371.4 thousand heads, where the total number of cows is about 204.8 thousand heads. The highest animal density is found in the centers with the highest rates of rainfall, which allow the good growth of pastures, as well as the availability of low-salinity wells water. The New Valley Governorate is also considered a promising area for development. Its geographical location makes it free of epidemics and diseases that have recently infected livestock, along with the availability of ingredients and components for manufacturing feed at low costs, providing for the establishment and success of breeding projects in that governorate. However, despite the availability of components in the New Valley Governorate such as its geographical location and the abundance of groundwater needed for fodder cultivation and the vast areas of land for raising cows and buffaloes, it did not make the best use of it to increase the livestock wealth of these animals, to reduce the local production deficit of red meat, and not keep up with the increasing demand for it as a result of the steady increase in the population. In addition, there is a need to identify the characteristics of cows and the economic return of those characteristics, as well as conducting an economic evaluation of cow breeding projects in the Dakhla region in the New Valley Governorate based on modern scientific bases, to encourage the entry of investors into the field of livestock breeding. The importance of this study is being one of the economic evaluation studies of the production and breeding of cows according to modern scientific bases, where a sample of 50 cow breeders was taken by a simple random sampling method in the Dakhla region, (an average of about 25 cows/breeder). In order to find out some economic measures to evaluate the economics of cow production in the study area, quantitative analysis of some farm animals compared to cows was used. The study utilized the use of some economic measures for economic evaluation of the breeding and production of cows in the valley, where the sale takes place after the third year, and the use of dynamic programming as one of the modern methodologies compared to the traditional economic methods of the breeding and production of cows in the new valley. The results of the dynamic programming model were better compared to the traditional method of economic evaluation of the project, which encourages investors to enter the field of cow breeding and production in the New Valley, where the net return in the second year amounted to about 39.5 thousand Egyptian pounds (L.E.), at a rate of about 14.1 %, and to about 132 thousand L.E., at a rate of about 47.2 %, in the third year, and amounted in the fourth year to about 140,100 thousand pounds, at a rate of about 50.1 %. The optimal policy was determined by conducting several scenarios using the proposed model. The optimal scenario was applied from the point of view of the decision maker (the breeder). The research recommended the necessity of using modern economic methods for economic evaluation of cow breeding and production to encourage investors to enter the field and to the establishment of advanced large sizes farms to take advantage of the economics of scale and work to select high-quality strains that are compatible with the desert environment and climate in the region.