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

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

1999 ii

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 i

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 ii

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. iii

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 1

at the supply side of service provision 1. 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 Gujarat 2. 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 nongovernmental 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. 2

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 cooperative 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. 3

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 2500 2000 Figure 2.1: Distribution of total livestock population across district of Gujarat, 1992 1500 1000 500 0 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. 4

Before we turn to an analysis of the data collected in the survey, it needs to emphasized Figure 2.2: Distribution of sample across districts Number of providers included in the sampl 9 8 7 6 5 4 3 2 1 0 Mahesana Kheda Rajkot/ Surendranagar Panchmahals Surat/Vadodara 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. 5

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 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 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 6

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 cooperative 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 cooperative 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. 7

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 units 3. 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 8

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 cooperative 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. General Sickness At the Centre At home Table 3.3: Annual average of cases attended by veterinarians: 1998 Private Government Co-operative Institutional Private 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 Vaccination HS FMD Other 108 368 689 287 0 260 15 5529 655 28-42 0 0 0 8 1204 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. 9

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 service 4. 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. Rs./visit 60 50 40 30 20 10 0 Figure 3.1 Average fee prescribed by the co-operative unions -- general sickness and injury Kheda Vadodara Mahesana Panchmahals District 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. 10

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 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 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 11

whereasd the para-veterinarians (livestock inspectors) have completed diploma in veterinary care. Table 3.5: Staffing Pattern of Livestock Service Centres in Gujarat Type of facility Number of personnel in the units run by 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 costs 5. 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. 12

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. 13

Figure 4.1: Material cost per animal by type of service Rupees 40 35 30 25 20 15 10 5 0 AI BAIF Co-operatives Government Vet care Private Vaccination 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 units 6. 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. 14

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. Figure 4.2: Break-up of the material cost by type of service 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% BAIF Co-operatives Government Private Vaccinatio n Veterinary care AI 4.3 Total Direct Cost 15

Total direct costs 7 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. 16

Provider type Total Material Cost incurred in the sample units AI Veterinary care Table 4.2: Material cost by type of service and provider Total Animals Served Vaccination AI Veterinary care Material cost per animal Vaccination AI Veterinary care Vaccination Government 130,966 233,705 147,504 8,951 46,736 58732 14.6 5.0 2.51 Cooperatives 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 17

Provider type Government 512205 (13.3)* Table 4.3 : Direct cost of providing livestock services Total Total Salaries Total Total material operating and Direct Cost Animals cost cost benefits Served 271590 (7.0) 2810364 (79.7) 3856816 (100.0) Direct cost per animal 98947 39.0 Co- Operatives 911130 (34.1) 137450 (5.2) 1324800 (49.6) 2668280 (100.0) BAIF 104354 113903 157476 439856 (23.7) (25.9) (35.8) (100.0) Private 324792 133170 9600 467562 (69.5) (28.5) (2.0) (100.0) * Figures in parentheses are percentages to total direct cost. 59844 44.6 8797 50.0 13294 35.2 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 providers 8. 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. 19

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 cooperatives, 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 24171 BAIF 171904 43426 Co-operative 303509 168904 Government 659607 534296 20

Building Land Equipme nt & furniture Equipme nt & furniture Private BAIF Building Equipme nt & furniture Building Equipme nt & furniture Land Land Government Co-operatives 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. 21

Table 6.1: Total Revenues Generated by Livestock Service Providers Provider type Total revenues generated (Rupees) Total number of animals served Revenue per animal served AI Vet Vaccination 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 cooperative 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 22

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. Provider type Table 7.1: Direct Subsidy For Livestock Services in Gujarat Total revenues Total Total Direct Total generated direct cost Subsidy animals (Rupees) 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 23

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. (Pe rce nt) 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Figure 8.1: Mean Conception rates for cows and buffaloes 59.7 51.0 46.3 24 42.7 Cows Buffaloes 42.3 37.5 BAIF Co-operatives Government

7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 9.0 Insights from the Figure 8.2: Average number of follow-up visits required Government Co-operatives Private General sickness Injury Surgery 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. Figure 9.1: Profile of respondents from user survey 100% 80% Large farmers 60% Medium farmers 40% Small farmers 20% Marginal farmers 0% Landless Govt Private Co-operative NGO 9.1 Average expenses for AI and Veterinary Care 25

Figure 9.2 presents average expenses incurred by the livestock owners per visit of AI Figure 9.2: Average expenses for AI and veterinary care. For AI, the farmers, on 120 and Veterinary Care average paid about Rs.25 per insemination from a co-operative or a government unit. However, there is large variation around this mean. While (Ru pee s) some received the service for free, others paid upto Rs.80 or so 100 80 60 40 20 0 Govt doctor Private doctor Co-opeartive Union BAIF AI Vet care 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. Total time spent per veterinary visit 200 150 100 50 0 Time costs are highest in co-operatives Co-op Government Private Figure 9.3: Small and Marginal Farmers are Paying as much as Large Farmers Cos 90 t Per 80 AI 70 visi 60 t 50 (Ru 40 pee 30 s) 20 10 0 0 10 20 30 40 50 Number of Animals Owned by the Household 26 Cos t Per AI Visi t (Ru pee s) 80 70 60 50 40 30 20 10 0 0 10 20 30 Land Holding(Acres)

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. Figure 9.4: Small and Marginal Farmers are Paying as much as Large Farmers Co st 300 Per 250 Visdoc it tor 200 of (Ru Vetpee150 eri s) nar 100 y 50 0 0 5 10 15 20 25 Land Holding(Acres) Co st 80 Per 70 AI 60 Vis 50 it 40 (Ru pee 30 s) 20 10 0 0 10 20 30 40 50 Number of Animals Owned by the Household 9.2 The Time Costs 27

On average it takes about an hour for a 120 typical user to receive AI service. This includes 100 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/ Minutes 80 60 40 20 0 Average time spent per AI visit Average time spent per veterinary visit 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 Overall satisfaction with quality of Veterinary service 62% Highly 31% Not at all 7% 63% Highly 29% Not at all 8% Overall satisfaction with the cost of AI service Overall satisfaction with the cost of Veterinary service Highly 57% Highly 26% 32% Not at all 11% 28 59% Not at all 15%

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 31% Highly 60% 58% Not at all 11% 40% Government Private 11% Co-operatives Not at all 89% 29

Figure 8.3: Proportion of respondents expressing satisfaction with the cost of A62veterinary services disaggregated by provider type Government 55% Highly 17% Not at all 28% Private 65% Highly 25% Not at all 10% Highly 25% 65% Not at all 10% Co-operatives 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: 30

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 cooperative 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 31

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 32

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. 33

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 34

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. 35