Animal Health and Breeding Services in Gujarat: A Profile of Service Providers

Vinod Ahuja

Paper prepared for Phase I of the study on

“Impact of Commercialization on Poor: Case of Livestock Services in India”

sponsored by

The World Bank and the Swiss Agency for Development and Co-operation

INDIAN INSTITUTE OF MANAGEMENT

AHMEDABAD

ii

1999

i

CONTENTS

1. Introduction

2. Scope,Coverage and the Sampling plan.

3. A Profile of Providers

3.1. Animals Served 3.2. Fee Structure

3.2.1. Artificial Insemination 3.2.2. Veterinary care

3.3. Staffing Pattern

4. Direct Cost of Service Provision

4.1.1. Salaries and benefits 4.1.2. Material Costs 4.1.3. Other operating costs

4.2. Average Investment

4.3. Total Cost

5. Revenues

6. Direct Subsidy

7. Some Indicators of Service Quality

8. Insights from User Survey

8.1. Average expenses for AI and Veterinary Care 8.2. The time costs 8.3. The satisfaction level

9. Summary

ii

LIST OF TABLES

Table No Title Page No

3.1 Type of services available at the sample units. 6

3.2 Average number of AI performed at the sample units. 7

3.3 Annual average of cases attended by veteriarians,1998. 9

3.4 Average fee schedule for private veterinary practitioners. 11

3.5 Staffing pattern of livestock services centres in Gujarat. 12

4.1 Average salaries of skilled personnel across various types of providers. 13

4.2 Material cost by type of service and provider. 17

4.3 Direct cost of providing livestock services. 19

4.4 Non-material direct costs of providing livestock services. 19

5.1 Mean value of physical assets held by livestock service providers. 20

6.1 Total revenue generated by livestock service providers. 22

7.1 Direct subsidy for livestock services in Gujarat. 23

iii

LIST OF FIGURES

Figure No

Title Page No

2.1 Distribution of total livestock population acros district of Gujarat, 1992.

2.2 Distribution of sample across districts.

3.1 Average fee prescribed by the co-operative unions-general sickness & injury

4.1 Material cost per animal by type of service.

4.2 Break-up of the material cost by type of service.

5.1 Share of Land, Building & equipments in total investment.

7.1 Mean conception rates for cows & Buffaloes.

7.2 Average number of follow-up visits required.

8.1 Profile of respondents from user.

1

Animal Health and Breeding Services in Gujarat: A Profile of Service Providers

Vinod Ahuja*

1.0 Introduction

In response to the concerns about the adverse distributional impacts of

commercialization of agricultural services on poor in the wake of ongoing economic reforms in

India, the World Bank, in collaboration with Swiss Agency for Development and Co-operation

(SDC) and the Indian Institute of Management, Ahmedabad initiated a study to investigate the

potential impact of cost recovery/privatization of livestock health and breeding services on poor.

Given the fact that nearly 60 percent of India’s bovine population is on small and marginal

farms, it is important that the distributional impacts be adequately examined before any

commercialization efforts are launched in this direction. This study was initiated with the

objective of examining whether access by the poor is affected by commercialization and/or

privatization, and the degree to which farmers are willing to pay for these services and for

improved delivery.

Three states, Gujarat, Rajasthan and Kerala, which have already implemented different

degrees of cost recovery and/or privatization for delivery of these services were selected for this

study. Since little information exists on the operational aspects of livestock service provision in

India, it was considered important to develop adequate understanding of the supply side of

these services before going for impact evaluation. The first phase of the study, therefore, looked

2

at the supply side of service provision1. Essentially the objective of this phase were to assess

ground realities about the supply of livestock services and to gain some insights into the relative

operational performance of various providers – government, co-operatives, non-governmental

organizations (NGOs), and private entrepreneurs. This report summarizes the findings of phase I

from Gujarat2.

The time and resources available to us were not adequate to come-up with rigorous

measures of economic efficiency. Nevertheless, in view of the scarcity of information on the

provision of these services, it was considered important to develop a profile of service providers

in each of the study states. In Gujarat, we selected 28 different service providers and collected

detailed information on their functioning using a structured questionnaire. The information

contained in the questionnaire included

• nature of services provided, • catchment area • animals served (disaggregated by type of service) • some indicators of effectiveness • type of clientele • availability of alternative providers in the catchment area • details on the staff working at these units • capital assets • operating costs • fee structure, and • perceptions and impressions

* Vinod Ahuja is a faculty member at the Indian Institute of Management, Ahmedabad. He is also the principal investigator and co-ordinator for this study. 1 The preliminary findings of the phase I were discussed with representatives from SDC, the World Bank, veterinary pharmaceutical industry, the Government of India (GOI), the state governments, and the non-governmental organizations in a small workshop in Ahmedabad in October 1998. 2 The results for Kerala and Rajasthan are summarized in separate reports. In addition, a combined report synthesizing the results from all three states is also available.

3

In addition to surveying the service providers, a rapid and quick survey of about 55

users was also undertaken. The main objective of this survey was to cross-check the validity of

data collected from service providers as well as to get a quick assessment of users’ perceptions

about the quality of service.

2.0 Scope, Coverage and the Sampling design

There is significant diversity in the composition of livestock population within and across

states of India. We have not attempted to cover all possible types of livestock and livestock

services. This study focused on cattle and buffaloes. On the services side, the focus was on

veterinary (curative health and vaccination) and artificial insemination services.

The main providers of livestock services in the state of Gujarat are state animal husbandry

departments, District Co-operative unions, Bharatiya Agro Industries Foundation (BAIF), and

some private veterinarians. The animal husbandry departments provide services through

veterinary dispensaries, Artificial Insemination centres and sub-centres, veterinary polyclinics,

and first aid veterinary care centres. Except in the case of emergencies, all services are provided

at the centre. The co-operative unions utilize the network of primary milk co-operative societies

at the village level to get information about the sick animals and then send their doctors from the

central facility. The farmers may receive the service either at the doorstep or at the primary co-

operative society at the village level. Artificial insemination services are also available at most

primary co-operative societies at the village level. BAIF provides AI service at farmers’ homes

or fields.

4

The units were purposely selected to ensure adequate representation of (i) different types of

providers, and (ii) areas with high and low livestock density. Of the total 19 districts in Gujarat,

the sample was drawn from 7 districts: Mahesana, Rajkot, Surendranagar, Panchmahals,

Kheda, Surat, and Vadodara. In Mahesana and Kheda districts, co-operative unions are very

strong. These districts, combined together, contribute over a quarter of total milk production in

Gujarat although they account for only about 12-13 percent of total cattle and buffalo

population. Panchmahal, on the other hand, contributes only 5 percent of total milk production

although this district is home to about 11 percent of bovine population (Figure 2.1). Private

veterinarians are active in the districts of Rajkot and Mahesana. Rajkot and Surendranagar

were included in the sample to get some representation of service providers in Saurashtra region

of Gujarat as well as to enhance the number of private veterinarians in the sample. BAIF is more

active in Surat and Vadodara. Therefore, these two districts were also included in the sample.

Figure 2.2 gives the distribution of sample across districts. The 28 units included 10 government

providers, 7 co-operatives, 6 private veterinarians, and 5 units run by BAIF.

Figure 2.1: Distribution of total livestock population across district of Gujarat, 1992

0

500

1000

1500

2000

2500

5

Before we turn to an analysis of the data collected in the survey, it needs to emphasized

that the statistics presented in this report are not representative of Gujarat state. The sample is

not only small but also very purposive. Nevertheless, the statistics suffice to provide important

insights into the operational performance of veterinary and AI centres in relation to the coverage

and cost of services.

3.0 A profile of providers

A break-up of the type of services available at various units included in the sample is

presented in Table 3.1. In most Government units, both AI and veterinary care services are

available. As can be seen from Table 3.1, of the 10 government units included in the sample, 9

were providing both AI and veterinary care services. Only one unit reported providing only

health services. BAIF, on the other hand, is operating mainly the AI centres where no veterinary

services are provided. Five out of six BAIF units reported providing only AI service. One unit

reported providing limited veterinary services such as vaccination in addition to AI.

Figure 2.2: Distribution of sample across districts

0123456789

Mah

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Khe

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Raj

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Panc

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Sura

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Num

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6

Private activity in the provision of AI service is extremely limited. Five out of six private

practitioners reported providing only veterinary services. Only one private veterinarian reported

providing both AI and veterinary

care services. Finally, co-operatives

are providing both AI and

veterinary services although the

degree of veterinary care available

varies across units. Within the units

where veterinary care is available, 2 units were providing limited health services such as

vaccination whereas the full range of veterinary services was available at the remaining 3 units.

In addition to these services, most units were also providing extension advice to the farmers on

a regular basis. The nature of extension services included advise on preventive health care, post

natal care of newborn and the mother, advise about sanitation and hygiene, diet restriction of

sick animals, feeding and nutrition, advise about proper timing of AI and so on. The government

units also organized village level infertility and surgical camps where vaccination, castration and

other veterinary services were provided. Co-operative units and private practitioners were not

organizing any infertility or surgical camps.

3.1 Animals Served

The number of animals served by various types of providers in a year for health and

breeding services are given in Tables 3.2 and 3.3. As is evident from Table 3.2, there is

Table 3.1 : Type of Services Available at the sample Units

Provider type Type of services provided AI Vet care Both Government 0 1 9 Co-operative 2 3 2 BAIF 5 0 1 Private 0 5 1

7

significant variation in the service profile of different providers. On the AI side, BAIF units were

handling maximum number of AI cases per unit followed by Government and co-operative units.

This was despite the fact that a large number of BAIF centres are located in relatively remote

areas with little awareness about the potential of AI. One of the reasons why BAIF units were

covering large number of cases was because they are making the service available at farmers’

homes. Government services, on the other hand, are available at the centre. Thus, the farmer

must incur additional cost (including time cost) of bringing the animal to the centre. The co-

operative services, on the other hand, are available at the farmer’s field as well as at the primary

co-operative society at the village level. But, for availing the service at home, the farmers are

required to pay significantly higher fee. It is also interesting to observe that the composition of

animals inseminated by co-operative units is skewed towards buffaloes. Out of total cattle and

buffaloes inseminated at BAIF and Government units, less than 50 percent were buffaloes.

Comparable figure for co-operative units was over 65 percent. That is simply because co-

operative movement is strongest in districts with relatively heavy concentration of buffaloes. For

example, Mahesana and Kheda together account for about a quarter of total buffalo population

in Gujarat, and of the total AI done by co-operatives in 1997, 88% were in Kheda amd

Mahesana.

Table3.2 : Average number of AI performed at the sample units Provider type Cows Buffaloes Total BAIF 415 (53.7)* 357 (46.3) 772 (100) Government 348 (50.2) 345 (49.8) 693 (100) Co-operative 174 (34.2) 334 (65.8) 508 (100) * Figures in parentheses are percentages to total.

8

On the veterinary side, the situation is somewhat different. Within the units included in

the sample, co-operative units were attending high numbers of general sickness, gynecological

and vaccination cases when compared to their public sector counterparts. Co-operative units,

on average, attended over 5000 cases of general sickness, injury, deworming, surgery and

gynecological problems in a year. Comparable figure for government and private units was

2300 and 1500 respectively. On per doctor basis, however, there is not much difference

between the government and co-operative units3. Both government and co-operative units

attended some 1900 cases (excluding vaccinations) per doctor per year. In addition the

government units attended about 2500 cases of HS and FMD vaccinations at the centre as well

as in the field camps. Number of vaccinations performed by the co-operative units was around

650 per centre. Private veterinarians included in the sample covered about 1700 cases of

veterinary care and 870 cases of vaccination.

Finally, an important feature that distinguished government service from other units was

their stationary nature. While over 80 percent of co-operative, BAIF and private cases were

attended at farmers’ homes, the extent of home service in the government units was less that 20

percent.

3 In Gujarat, the government doctors are permitted to do private practice after office hours within

the prescribed guidelines. We attempted to obtain information on the extent of private practice but it was not always possible to get reliable picture of the private practice due to the unwillingness of respondents to

9

3.2 Fee structure

3.2.1 Artificial Insemination

Artificial insemination services provided by BAIF are completely free. No charge is

levied on the livestock owner either for materials or for the service. At the government units the

prescribed fee (including materials and service) for AI is Rs.5 and there is no variation across

regions/districts of Gujarat. Co-operative unions provide AI services through primary co-

operative societies and the fee varies between Rs. 5 and 35. For the AI done by trained

inseminators at the primary co-operative societies, farmers generally pay Rs. 5. If, however, the

insemination is done be a veterinarian from the district co-operative union, charges tend to be

somewhat higher.

Table 3.3: Annual average of cases attended by veterinarians: 1998 Private Government Co-operative Institutional Private General Sickness

At the Centre At home

157 662

1613

27

0

212

0

4220 Injury 38 43 6 29 Deworming 143 301 0 56 Surgery 46 42 5 63 Gynecological Problems

At the Centre At home

108 368

260 15

-

42

8

1204 Vaccination

HS FMD Other

689 287

0

5529 655 28

0 0 0

1889 2094

16 Surgical camp 0 177 0 54 Infertility camp 0 643 0 665

provide sufficient details. The number pf cases reported under private practice by government doctors in Table 3.3 are, in all likelihood, serious underestimates of the extent of the private practice.

10

Figure 3.1 Average fee prescribed by the co-operative unions -- general sickness and injury

0

10

20

30

40

50

60

Kheda Vadodara Mahesana PanchmahalsDistrict

Rs./

visi

t

Small ruminants 120 262 0 187

3.2.2 Veterinary care

Health services provided at government veterinary dispensaries were free until

1996 when a nominal fee (between Rs. 2 and Rs. 5) per visit at the centre was introduced. The

prescribed fee for emergency home visits during office hours was same but the farmer was

required to bear the transportation cost for the veterinarian. The prescribed fee structure is not

differentiated by type of service4.

Co-operative unions provide services for a fee which varies significantly across

districts (Figure 3.1). Some co-operative unions also have differentiated fee structure. For

example, the standard fee charged by Panchmahal dairy is Rs. 55 per visit. However, for visits

requiring surgical procedures, farmers are required to pay up to Rs.120 per visit.

4 Actual fee paid by the service users, specially for home visits, can be several times more than the prescribed fee. We discuss the actual costs incurred by the users in section 9.0.

11

The fee for private practitioners tends

to be differentiated according to the type of

service (Table 3.4). For example, a general

sickness, injury or deworming visit by a private

veterinarian costs between Rs.35 and Rs.75

whereas, a dystokia case can cost as high as

Rs.200 or more.

3.3. Staffing Pattern

There is considerable variation in the staffing pattern of units across different type of

providers. Private veterinarians either work alone or hire temporary help on a part time basis for

cleaning and sweeping of office. In general, private veterinarians do not employ any technical

assistants. All private veterinarians included in the sample had completed university education in

veterinary science and had about 2 years of experience.

Staff strength of co-operative and government units varies with the range of services

available at the centre. The units which are providing AI and limited veterinary care, there is

generally one technical person supported by one or two semi-skilled/unskilled helpers. The

technical person generally holds a diploma in animal health and artificial insemination. The

veterinary dispensaries and polyclinics have more staff (Table 3.5). There is very little difference

in the educational and technical qualifications of staff across providers. In most cases,

veterinarians (or veterinary officers) have completed university education in veterinary science

Table 3.4 : Average Fee Schedule for Private Veterinary Practitioners

Type of visit Fee per visit (Rupees) At the clinic At home General sickness 41 72 Injury 27 46 Deworming 22 34 Surgery 107 150 General gyn problem 29 58 Prolapse 88 122 Dystokia 120 190 FMD vaccination 15 23

12

whereasd the para-veterinarians (livestock inspectors) have completed diploma in veterinary

care.

Table 3.5: Staffing Pattern of Livestock Service Centres in Gujarat

Number of personnel in the units run by Type of facility BAIF Government Co-operative Private

AI Centres/Vet sub-centres 1 1 - 2 1 - 2 . Veterinary dispensaries . 2 - 4 2 – 4 1 – 2 Veterinary polyclinics . 4 - 13 4 - 10 .

4.0 Direct Cost of Service Provision

Total cost of providing livestock services can be classified into (i) material cost, and (ii)

the distribution cost. Accounting of material cost is relatively straightforward. The distribution

costs, which include costs of administration and supervision, can be very difficult to isolate due

to the centralized nature of many operations include administration, supervision and procurement

as well as multi-output nature of the production function. For this reason, we focused only on

the direct cost which included salaries and benefits of the staff employed at the unit, the cost of

materials, and direct operating costs5.

4.1 Salaries and Benefits

Salaries constitute a significant proportion of the direct cost of service provision. Among

the units covered in this study, the contribution of salaries to total cost at the unit level varied

from 80 percent in case of government units to about 40 percent in case of units run by BAIF.

13

Given the fact that Government veterinarians and para-veterinarians are paid more than twice

their counterparts in co-operative or BAIF units (Table 4.1), this is not surprising. Further

analysis of salaries and benefits is provided in section 4.3.

Table 4.1: Average Salaries of Skilled Personnel Across Various Types of Providers

(Rupees/month) Average gross salary of Veterinary Officer/

Veterinarian Para-veterinarian/ trained inseminator/ livestock inspector

Government 11,630 5,990

Co-operatives 5,473 2,450

BAIF -- 2,625

4.2 Material Costs

Material costs include the cost of drugs and medical supplies, vaccines, AI doses, liquid

nitrogen and other such consumables. On average the contribution of material cost to total direct

cost varied between about 10 percent in case of government units to over 25 percent in case of

co-operative and BAIF units. Material cost per animal by type of service is given in Figure 4.1.

Total material cost for AI varies between Rs. 25 per animal (in case of co-operatives) to about

Rs.32 (in case of government). At least part of this variation is due to the quality of semen used

in AI.

5 These include the cost of electricity, phone, vehicles, stationary and the rent for the premises from which the unit is operating.

14

In case of veterinary care (including vaccination) the material cost is lowest in case of

government units. That is because the government units are supplied a fixed annual quota of

drugs and medical supplies which is grossly insufficient for meeting the requirements of the

units6. Private veterinarians incurred highest material costs and these were fully recovered from

the users.

Direct comparison of the material cost across various types of providers can be

misleading, however. The material costs will clearly vary with the range of available services.

The units which are providing only the AI and vaccination services, for example, are likely to

have lower material costs than those which are providing full range of veterinary services. To

gain some idea into the composition of material costs, we divided the material costs into three

components – cost of vaccines, AI related material costs such as AI doses and liquid nitrogen

and veterinary care costs such as proprietory drugs and medical supplies. The break-up is given

6 Our discussions with the veterinary officers indicated that the supplied quota of drugs is barely sufficient to cover 25 percent of the animals attended at a typical veterinary dispensaries. When the supplies are exhausted, the livestock owners are required to purchase drugs and other supplies from the market.

Figure 4.1: Material cost per animal by type of service

0

5

10

15

20

25

30

35

40

BAIF Co-operatives Government Private

Rup

ees

AIVet careVaccination

15

in figure 4.2. For the private veterinarians, and the co-operative units, the costs of drugs

(excluding vaccines) and other medical supplies constitute the main component of total material

cost which explains, at least in part, the high material cost for veterinary care in case of private

and co-operative units. In case of government units there is somewhat even spread of material

cost across vaccines, drugs and supplies and AI related materials (such as AI doses and liquid

nitrogen). That combined with the fact that there is fixed quota (approximately Rs.20,000 per

veterinary dispensary) for drugs and supplies, results into lower overall material cost for

government units. On per animal basis, the material cost borne by the government works out at

about Rs 15 for AI, Rs.5.0 for drugs and medical supplies and Rs 2.5 for vaccines (Table 4.2).

Actual material cost of treatment is much higher than is captured in these statistics, and the

difference is paid by the service users.

4.3 Total Direct Cost

Figure 4.2: Break-up of the material cost by type of service

0%10%

20%30%

40%50%

60%70%80%

90%100%

BAIF Co-operatives Government Private

VaccinationVeterinarycare

AI

16

Total direct costs7 include the material cost, direct operating costs, and salaries and

benefits. Since we do not have adequate information to disaggregate the salaries and the

operating cost by the type of service, total direct cost is estimated only at the unit level. The

estimates for total direct cost are presented in Table 4.3.

Total direct cost per animal works out to be within the range of Rs.35 and Rs.50. For

BAIF, which is providing AI and vaccination services at home, the cost is highest. A significant

component of this is accounted by the operating cost – mainly fuel and maintenance for the

vehicles. Similar is the case for private providers. In case of co-operatives, the share of

operating cost is low but partly it is because, the vehicles are maintained centrally and the units

are not required to bear the maintenance cost.

7 Direct cost here refers to the sum of salaries, material cost and direct operating cost. Since only the recurring component of the operating cost is included here, the actual cost is expected to be higher than the direct cost estimates presented in this report.

17

Table 4.2: Material cost by type of service and provider

Total Material Cost incurred in the sample units

Total Animals Served Material cost per animal Provider type

AI Veterinary care

Vaccination AI Veterinary care

Vaccination AI Veterinary care

Vaccination

Government

130,966

233,705

147,504

8,951

46,736

58732

14.6

5.0

2.51

Co-operatives

63,160

766,830

81,140

2279

36127

21438

27.7

21.2

3.78

BAIF

80354

--

24000

3302

0

5495

24.3

--

4.37

Private

9900

295292

19600

210

8205

4879

47.1

36.0

4.02

19

Table 4.3 : Direct cost of providing livestock services Provider type Total

material cost

Total operating

cost

Salaries and

benefits

Total Direct Cost

Total Animals Served

Direct cost per animal

Government 512205 (13.3)*

271590 (7.0)

2810364 (79.7)

3856816 (100.0)

98947 39.0

Co-Operatives

911130 (34.1)

137450 (5.2)

1324800 (49.6)

2668280 (100.0)

59844 44.6

BAIF 104354 (23.7)

113903 (25.9)

157476 (35.8)

439856 (100.0)

8797 50.0

Private 324792 (69.5)

133170 (28.5)

9600 (2.0)

467562 (100.0)

13294 35.2

* Figures in parentheses are percentages to total direct cost.

For the government units, the cost per animal works out to be around Rs.40 per animal.

Clearly this does not capture the total direct cost of providing livestock services. A number of

functions such as administration and supervision are handled centrally, the cost of which is not

accounted here. Also, as pointed out in the preceding sections, the material cost presented here

seriously underestimates the actual cost of drugs and supplies used in the treatment. Due to

these reasons, it is perhaps more meaningful to compare non-material direct cost per animal.

These are presented in Table 4.4. The non-material direct cost is highest for the government

units, followed by BAIF, co-operatives and private service providers8.

Table 4.4: Non-material direct costs of providing livestock services Provider type Total Operating

cost Salaries and

benefits Total Total Animals

Served Non material direct cost per animal

Government 271590 2810364 3081954 98947 31.3 Co-Operatives 137450 1324800 1462250 59844 24.4 BAIF 113903 157476 271379 8797 30.1

8 Once again, a note of caution is in order. No provision is made for salary of the veterinarian in case of private entrepreneur and the net return is treated as the return to his labor. Even if we treat this as a component of cost, however, total cost in case of private entrepreneurs will be the lowest among all types of service providers.

20

Private 133170 9600 142770 13294 10.7 5.0 Capital Stock

The survey attempted to build an inventory of land, building, furniture and equipment to

assess the value of investment in the units providing these services. In addition to the physical

inventory, the respondents were asked to provide their best estimate of the value of each of the

items in the inventory. Sum of the estimated value is taken as the best estimate of the value of

investment. Table 5.1 presents the mean and standard deviation of total investment by provider

type.

The mean value of the investment is highest in government units – more than twice as

much in the co-operative units and more than five times than in private units. Also, the within

group variation in the investment level is highest amongst the government units followed by co-

operatives, BAIF and the private units. This is, however, a natural consequence of the fact that

government is operating an entire range of facilities whereas others agencies are providing more

specialized services. What is worth pointing out though that a large proportion of investment in

government units is accounted by the value of land and buildings – 87 percent. The comparable

figures for co-operatives, and private providers are 68 and 20 percent. Over 50 percent of total

investment in government units is accounted by the value of land. The furniture and equipment

account for a mere 13 percent of total investment in government units (Figure 5.1).

Table 5.1: Mean value of physical assets held by livestock service providers Mean Std. Deviation

Private 124212 24171BAIF 171904 43426Co-operative 303509 168904Government 659607 534296

21

Figure5.1 : Share of Land, Buildings and Equipment in Total Investment

6.0 Revenues

The only source of revenue for the service units has been the fees collected from the

users. Since BAIF did not charge the users, the revenues for BAIF units are naturally zero. In

case of government units, there is no accounting for the revenue generated as part of private

practice. As noted before, the respondents were unwilling to provide detailed information on

their private practice. The revenues generated by government, private and co-operatives are

presented in Table 6.1.

Private

Land

Building

Equipment &

furniture

BAIF

Equipment &

furniture

Government

Building

Equipment &

furniture

Land

Co-operatives

Building

Equipment &

furniture

Land

22

Table 6.1: Total Revenues Generated by Livestock Service Providers Provider type Total revenues

generated (Rupees)

Total number of animals served

AI Vet Vaccination

Revenue per animal served

Government

187901.7

7489

36182

55276

1.89

Co-operative

1479640

2279

36127

21438

24.72

Private

591135

210

8205

4879

44.46

For all the 10 units included in the sample, the combined annual revenues were less than

Rs.200,000. This was less than 15 percent of the combined revenues generated by 7 co-

operative units. On a per animal basis the revenues generated by the government units were less

than Rs.2 per animal. Per animal revenue by co-operative units and private veterinarians, on the

other hand, is approximately Rs.25 and Rs.45, respectively.

7.0 Direct Subsidy

23

The direct subsidy in this report corresponds to the difference between direct receipts

and total direct costs. Total direct costs are same as reported in Table 4.3. It needs to

recognised that there are indirect costs (opportunity cost of the value of investment, centrally

operated supervision and administration and so on) which are not accounted here. Thus the

actual subsidy component is likely to be much higher.

On a per animal basis, the direct subsidy for government works out to be around Rs 37

(Table 7.1). Since BAIF is not charging any fee for its services, subsidy per animal is the same

as the estimated cost per animal – about Rs.50.00. For co-operative units, the average subsidy

works out to be about Rs.20 per animal.

Table 7.1: Direct Subsidy For Livestock Services in Gujarat

Provider type Total revenues generated (Rupees)

Total direct cost

Total Direct Subsidy

Total animals served

Direct subsidy per animal

Government

187901.7

3856816

3668914

98947

37.1

Co-operative

1479640

2668280

1188640

59844

19.8

Private

591135

467562

(- )123573

13294

9.30

BAIF

0

439856

439856

8797

50.0

(-) denotes net profit.

8.0 Some Indicators of Service Quality

24

Figure 8.1: Mean Conception rates for cows and buffaloes

59.7

46.342.3

51.042.7

37.5

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

BAIF Co-operatives Government

(Percent)

CowsBuffaloes

The discussion in the preceding sections has provided important insights into the

operational performance of AI and veterinary care units across various service providers.

However, the discussion has benn based purely on quantitative measures of output and cost. To

put the discussion in proper perspective, some indication of service quality is essential. Within

the context of livestock services, it is widely known that there is significant variation in the quality

of services available from different providers. In order to get some sense of this variation, we

asked the respondents to provide an estimate of the number of follow-up visits required for

different veterinary care interventions and the conception rate for artificial insemination at that

centre. While these are not perfect measures of service quality, they do reveal some magnitude

and direction of variation in service quality.

Figures 8.1 and 8.2 summarise the mean conception rates and the follow-up visits for

certain interventions for different type of providers. In case of AI the conception rate at BAIF

centres is the highest – approximately 60 percent for cows and 50 percent in buffaloes. In case

of government units, on the other hand, the conception rate is below 45 percent for cows and

below 40 percent in case of buffaloes. Somewhat similar picture emerges when we compare the

required follow-up visits across providers. The government units reported requiring maximum

number of follow-up visits for almost all different types of visits – general sickness, injury and

surgery. Private veterinarians on the other hand required the least follow-up visits.

25

Figure 8.2: Average number of follow-up visits required

0.0

1.02.0

3.0

4.0

5.06.0

7.0

General sickness Injury Surgery

GovernmentCo-operativesPrivate

9.0 Insights from the

User Survey

As noted earlier, the provider survey was complimented with a rapid and quick survey

of service users in order to crosscheck the validity of the responses received from the providers

and to get some idea of user perceptions about the quality of the service. Although the user

sample was not drawn randomly, it was ensured that all groups were adequately represented.

The profile of the respondents for the user survey is given in figure 8.1.

9.1 Average expenses for AI and Veterinary Care

Figure 9.1: Profile of respondents from usersurvey

0%20%40%60%80%

100%

Govt PrivateCo-operative

NGO

Large farmersMedium farmersSmall farmersMarginal farmersLandless

26

Figure 9.2: Average expenses for AIand Veterinary Care

0

20

40

60

80

100

120

AI Vet care

(Rupees)

Govt doctorPrivate doctorCo-opeartive UnionBAIF

Figure 9.2 presents average expenses incurred by the livestock owners per visit of AI

and veterinary care. For AI, the farmers, on

average paid about Rs.25 per insemination from a

co-operative or a government unit. However,

there is large variation around this mean. While

some received the service for free, others paid upto Rs.80 or so

for one insemination. Also, we did not find any relationship between land owned or the number

of animals owned (as crude measure of wealth) and the charges paid for AI. Small and marginal

farmers were paying as much for receiving the service as their large counterparts and none of

them expressed dissatisfaction with the cost.

Figure 9.3: Small and Marginal Farmers are Paying as much as Large Farmers

0

1020

3040

5060

7080

0 10 20 30

Land Holding(Acres)

CostPerAIVisit(Rupees)

0102030405060708090

0 10 20 30 40 50Number of Animals Owned by the Household

CostPerAIvisit(Rupees)

Time costs are highest in co-operatives

0

50

100

150

200

Co-op Government Private

Tot

al ti

me

spen

t per

ve

teri

nary

vis

it

27

The expenses incurred for veterinary visits were much higher. On average, one visit by a

private veterinarian costed around Rs.110.00. Comparable figure for co-operative and

government doctors were about Rs. 55.00 and Rs. 100.00 respectively. What is interesting to

observe is that although the fee actually charged by co-operative doctors were within the range

prescribed by the district co-operative unions, the fee charged by the government doctors was

several times more than what is prescribed. The prescribed fee structure for private practice by

the government doctors, is extremely difficult to enforce and it is not uncommon for the

government doctors to engage in private practice even during the office hours. That private

practice by government doctors is quite widespread is, at least in part, supported by the fact

that average expenses per veterinary visit by a government doctor is almost equal to that by a

private doctor. Again, there is no relationship between the expenses incurred and the number of

animals owned or the size of land holding of the household.

9.2 The Time Costs

Figure 9.4: Small and Marginal Farmers are Paying as much as Large Farmers

0

50

100

150

200

250

300

0 5 10 15 20 25Land Holding(Acres)

CostPerVisitofVeterinary

doctor(Rupees)

01020304050607080

0 10 20 30 40 50Number of Animals Owned by the Household

CostPerAIVisit(Rupees)

28

0

20

40

60

80

100

120

Average timespent per AI visit

Average timespent per

veterinary visit

Min

utes

On average it takes about an hour for a

typical user to receive AI service. This includes

the time between when the contact is first made

with the provider and the time when the service is

actually received. For the service received at the

centre, this will include the time taken in walking/

transporting the animal to the centre, the waiting

time and the actual time taken in providing the service. For home visits, this covers the time

between the time the message is sent to the inseminator and the time when the animal is actually

inseminated. For veterinary care the comparable figure is about 2 hours. The time taken is

highest in case of co-operatives – about three hours, and lowest in case of private veterinarians

– about one hour. Time taken by the government doctor is about 1 hour 30 minutes.

9.3 The Satisfaction Level

A large number of users in the sample expressed satisfaction with access, quality and

Figure 8.1: Proportion of respondents expressing various levels of satisfaction with the quality and cost of livestock services

Overall satisfaction with quality of AI service

Not at all Satisfied

7%Satisfied62%

Highly Satisfied

31%

Overall satisfaction with quality of Veterinary service

Highly Satisfied

29%

Satisfied63%

Not at all Satisfied

8%

Overall satisfaction with the cost of AI service

Highly Satisfied

57%

Satisfied32%

Not at all Satisfied

11%

Overall satisfaction with the cost of Veterinary service

Not at all Satisfied

15%

Satisfied59%

Highly Satisfied

26%

29

the cost of both AI and veterinary services (Figure 8.1). However, there were some revealing

differences in the expressed satisfaction level across different provider types (Figure 8.2). A

large number of users who had received services from co-operative doctors were dis-satisfied

with one aspect of the service – the time taken in delivering the service because of the

centralized nature of operations. None of the clients of the private veterinarians expressed any

dissatisfaction. A large number of clients of government doctors also expressed overall

satisfaction with the quality of the service. That clearly suggests that the government doctors in

Gujarat are well qualified and are delivering good quality services. However, whether this is

being done in official or in private capacity is an open question.

Figure 8.2: Proportion of respondents expressing satisfaction with the quality veterinary services disaggregated by provider type

Highly Satisfied

31%

Satisfied58%

Not at all Satisfied

11%

Government

Satisfied40%

Highly Satisfied

60%

Private

Not at all Satisfied

89%

Satisfied11%

Co-operatives

30

Summary

This study has presented a profile of livestock service (AI and curative veterinary

services) providers in the state of Gujarat. The findings are based on a survey of 28 different

service providers and approximately 55 service users. The sample was drawn purposely to

ensure adequate representation of (i) different types of providers, and (ii) areas with high and

low livestock density. Of the total 19 districts in Gujarat, the sample was drawn from 7 districts:

Figure 8.3: Proportion of respondents expressing satisfaction with the cost of A62veterinary services disaggregated by provider type

Highly Satisfied

17%Satisfied55%

Not at all Satisfied

28%Government

Not at all Satisfied

10%Satisfied

65%

Highly Satisfied

25%

Private

Not at all Satisfied

10%Satisfied

65%

Highly Satisfied

25%

Co-operatives

31

Mahesana, Rajkot, Surendranagar, Panchmahals, Kheda, Surat, and Vadodara. Main findings

are summarized below

1. The main providers of livestock services in the state of Gujarat are state animal husbandry

departments, Co-operative unions, Bharatiya Agro Industries Foundation (BAIF), and some

private veterinarians. The animal husbandry departments provide services through veterinary

dispensaries, Artificial Insemination centres and sub-centres, veterinary polyclinics, and first aid

veterinary care centres. Except in the case of emergencies, all services are provided at the

centre. The co-operative unions utilize the network of primary milk co-operative societies at the

village level to get information about the sick animals and then send their doctors from the

central facility. The farmers may receive the service either at the doorstep or at the primary co-

operative society at the village level. BAIF provides AI service at farmers’ homes or fields.

2. Most Government units included in the sample were providing both AI and veterinary care

services. BAIF, on the other hand, is operating mainly the AI centres. Private activity in the

provision of AI service is extremely limited and co-operatives are providing both AI and

veterinary services although the degree of veterinary care available varies across units. In

addition, most units were also providing extension advice to the farmers on a regular basis. The

government units also organize village level infertility and surgical camps where vaccination,

castration and other veterinary services were provided. Co-operative units and private

practitioners do not organize any infertility or surgical camps.

3. There is significant variation in the service profile of different providers. On the AI side,

BAIF units were handling maximum number of AI cases per unit followed by Government and

co-operative units. On the veterinary side, the co-operative units were attending high numbers

32

of general sickness, gynecological and vaccination cases when compared to their public sector

counterparts. On per doctor basis, however, there is not much difference between the

government and co-operative units. An important feature that distinguished government service

from other units was their stationary nature. While over 80 percent of co-operative, BAIF and

private cases were attended at farmers’ homes, the extent of home service in the government

units was less that 20 percent.

4. Artificial insemination services provided by BAIF are completely free. At the government

units the prescribed fee for AI is Rs.5. Co-operative unions provide AI services through

primary co-operative societies and the fee varies between Rs. 5 and 35. For the AI done by

trained inseminators at the primary co-operative societies, farmers generally pay Rs. 5. If,

however, the insemination is done be a veterinarian from the district co-operative union, charges

tend to be somewhat higher.

5. Health services provided at government veterinary dispensaries were free until 1996 when a

nominal fee (between Rs. 2 and Rs. 5) per visit at the centre was introduced. The prescribed

fee for emergency home visits during office hours was same but the farmer was required to bear

the transportation cost for the veterinarian. The prescribed fee structure is not differentiated by

type of service. Co-operative unions provide services for a fee which varies significantly across

districts. Some co-operative unions also have differentiated fee structure. The fee for private

practitioners tends to be differentiated according to the type of service.

6. Salaries constitute a significant proportion of the direct cost of service provision. Among the

units covered in this study, the contribution of salaries to total cost at the unit level varied from

33

80 percent in case of government units to about 40 percent in case of units run by BAIF. On

average the contribution of material cost to total direct cost varied between about 10 percent in

case of government units to over 25 percent in case of co-operative and BAIF units. Total

material cost for AI varies between Rs. 25 per animal (in case of co-operatives) to about Rs.32

(in case of government).

7. In case of veterinary care (including vaccination) the material cost is lowest in case of

government units. That is because the government units are supplied a fixed annual quota of

drugs and medical supplies which is not adequate for the animals treated at the centre. Private

veterinarians incurred highest material costs and these were fully recovered from the users.

8. Total direct cost per animal works out to be within the range of Rs.35 and Rs.50. For

BAIF, which is providing AI and vaccination services at home, the cost is highest. A significant

component of this is accounted by the operating cost – mainly fuel and maintenance for the

vehicles. Similar is the case for private providers. In case of co-operatives, the share of

operating cost is low but partly it is because, the vehicles are maintained centrally and the units

are not required to bear the maintenance cost. For the government units, the cost per animal

works out to be around Rs.40 per animal. But since a number of functions such as

administration and supervision are handled centrally, which are not accounted here, this does

not capture the total direct cost of providing livestock services.

9. On a per animal basis the revenues generated by the government units were less than Rs.2

per animal. Per animal revenue by co-operative units and private veterinarians, on the other

hand, is approximately Rs.25 and Rs.45, respectively.

34

10. On a per animal basis, the direct subsidy for government works out to be around Rs 37.

Since BAIF is not charging any fee for its services, subsidy per animal is the same as the

estimated cost per animal – about Rs.50.00. For co-operative units, the average subsidy works

out to be about Rs.20 per animal.

11. The mean conception rates are highest for the inseminations done by BAIF and lowest for

those done by government units. The picture for the required follow-up visits for veterinary care

is much the same. The government units reported requiring maximum number of follow-up visits

for almost all different types of visits – general sickness, injury and surgery. Private veterinarians

on the other hand required the least follow-up visits.

12. On average, the farmers paid about Rs.25 per insemination from a co-operative or a

government unit. There is no relationship between land owned or the number of animals owned

(as crude measure of wealth) and the charges paid for AI. The expenses incurred for veterinary

visits were much higher. On average, one visit by a private veterinarian costed around

Rs.110.00. Comparable figure for co-operative and government doctors were about Rs. 55.00

and Rs. 100.00 respectively.

13. The fee actually charged by co-operative doctors were within the range prescribed by the

district co-operative unions. But, for home visits, the government doctors were charging several

times more than what was prescribed. Private practice by government doctors is quite

widespread.

14. A large number of users in the sample expressed satisfaction with access, quality and the

cost of both AI and veterinary services. However, there were some revealing differences in the

expressed satisfaction level across different provider types. A large number of users who had

35

received services from co-operative doctors were dis-satisfied with one aspect of the service –

the time taken in delivering the service. None of the clients of the private veterinarians expressed

any dissatisfaction. A large number of clients of government doctors also expressed overall

satisfaction with the quality of the service. That clearly suggests that the government doctors in

Gujarat are well qualified and are delivering good quality services. However, whether this is

being done in official or in private capacity is an open question.