Assessing the financial sustainability of a rural livestock practice: the case of Pakistan
Abstract/Description
This research aims to investigate the feasibility of formalizing an old, informal livestock financing practice known as Adhyara in Pakistan through assessment of estimated return and risk. Hedonic pricing model was employed to estimate the impact of breed, weight, pregnancy status and milk yield on cattle sales price and the appropriate estimates were used for monetization. The stochastic simulation was then used to estimate the distribution of capital returns for investors in the informal livestock practice. Primary data on animal prices and attributes were obtained from survey of dairy farms and data on terms of Adhyara deal were obtained from survey of nomad pastoralists and current investors. Results reveal that animal prices in Pakistan are highly variable depending on the animal attributes. Our stochastic simulation reveals a mean estimated investment return of 24 percent. This return is competitive considering other local investment alternatives. Recommended formalization of traditional livestock practice can boost investment creating substantial potential for the uplifting of local communities and simultaneously contribute towards the goals of eradication of poverty, provision of food and generation of women employment.
Keywords
Livestock, Financing, Agriculture, Rural development, Emerging markets
Track
Accounting, Law, and Finance
Session Number/Theme
Session 2A
Session Chair
Dr. Hilal Anwar Butt, Institute of Business Administration, Karachi
Session Discussant
Tahira Mariam Jaffery; Zaira Anees; Dr. Sharjeel Ahmed Hasnie; Dr. Falik Shear
Start Date/Time
23-6-2022 3:30 PM
End Date/Time
23-6-2022 3:50 PM
Location
Training Room 3, Marriott Hotel, Karachi
Recommended Citation
Omer, M., Tauseef, S., & Chatha, W. A. (2022). Assessing the financial sustainability of a rural livestock practice: the case of Pakistan. 3rd IBA SBS International Conference 2024. Retrieved from https://ir.iba.edu.pk/sbsic/2022/program/20
COinS
Assessing the financial sustainability of a rural livestock practice: the case of Pakistan
Training Room 3, Marriott Hotel, Karachi
This research aims to investigate the feasibility of formalizing an old, informal livestock financing practice known as Adhyara in Pakistan through assessment of estimated return and risk. Hedonic pricing model was employed to estimate the impact of breed, weight, pregnancy status and milk yield on cattle sales price and the appropriate estimates were used for monetization. The stochastic simulation was then used to estimate the distribution of capital returns for investors in the informal livestock practice. Primary data on animal prices and attributes were obtained from survey of dairy farms and data on terms of Adhyara deal were obtained from survey of nomad pastoralists and current investors. Results reveal that animal prices in Pakistan are highly variable depending on the animal attributes. Our stochastic simulation reveals a mean estimated investment return of 24 percent. This return is competitive considering other local investment alternatives. Recommended formalization of traditional livestock practice can boost investment creating substantial potential for the uplifting of local communities and simultaneously contribute towards the goals of eradication of poverty, provision of food and generation of women employment.
