economics of genetic improvement - why countries should invest in genetic improvement programmes leo...
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Economics of Genetic Improvement -Why countries should invest in genetic
improvement programmes
Leo Dempfle
International Consultant
and
Department of Animal Science
University of Technology Munich/Germany
Performance (Phenotype) depends onGenetics and on the Environment
(Management)
Phenotype=f(Genetics)+f(Environment)
P = G + E
If interactions
P = G + E + GxE
P = G + E +GE
FAO-trial in PolandComparison of 10 Black and White strains (Israel, US, Canada, Netherlands, France, Germany, NZ, ...)
US: 197.2 kg Fat + 182.7 kg Protein = 379.90 kg val. SolidsNS: 206.0 kg Fat + 180.1 kg Protein = 386.10 kg val. Solids
US: valuable solids/100 kg body weight = 66NZ: valuable solids/100 kg body weight = 69
Their might be some interactions. Superiority of NZ was stronger at lower plan of nutrition.Israel, Germany but Irland!!
• Carful of data interpretations!• Compare FAOSTAT Data and what we
found in our TCP!
• Conclusion:• Level of production is mainly an indicator
of environment (management) not of genetics
• Because of interaction it is hard to precisely predict the performance in the importing country
What is special of genetic improvement programmes?
Negative side:
Genetic improvement is slow with only small increments (eg 1% of the mean), except for importing genetic progress
and
For a private entrepreneur it is difficult to recover the costs
On the other hand, genetic improvement has some remarkable positive properties, like being
permanentcumulativemultiplicative
which is very favorable for the economics of it
This is the result of a single cycle of selection (stopping after the first cycle).Progress is permanent!Compare that with nutrition!
Repeating the selection cycle year after year you add new genetic progress on the old genetic progress.Progress is cumulative!
Breeding is usually carried out in a small nucleus and is then multiplied.Progress is multiplicative!
Analysing one cycle of selection
• The Net present value of one cycle of selection (per generation or per year)
• NPV = -c + H x N x 15
• c cost depends on the size of the nucleus, and on other cost factors
H measures the additional revenue per year and animals
N is the size of the commercial population 15 depends on time horizon and interest rate
Who will run the nucleus?
• No patents
• No intellectual property rights
• Can make money by selling breeding animals only - But then you can get easily competition
• Private good become very quickly a common (public) good
What Solutions?
• Former time Germany (similar in most European countries):
Animal Breeding LawEvery farmer had to use a licenced bullOnly a recognised breed societies could
produce licenced bullsIn addition Up to 3 quarters of the cost of Recording
was paid by the State
• Nowadays mainly AI (close to 90 %)
• But state is still contributing to the recording
• US: some support eg estimation of breeding values
• NZ: Dairy industry depends most heavily on export. All dairy farmers depend on the competitiveness on the world market
Very strong farmers‘ cooperatives in the whole dairy sector (factories, marketing, AI, Recording, Genetic improvement).
So essentially the whole dairy industry is supporting Genetic Improvement!
For a private investor I see little chance, since
the private good turns quickly into a public good!!
How to start genetic improvement?
• In most cases the gap between a starting scheme and the leading scheme is so big that, if possible, you resort to importation of genetic progress.
• In many cases import of semen is cheapest – but there is a time lag!
• What semen to import?
• There is semen of three different categories of bulls available:
• Test bulls: young male offspring of highly selected sires and dams (age about 15-18 months)
• Proven bulls: selected progeny tested bulls (with about 100 daughters) used for female replacements
• Proven top bulls: same as proven bulls but used for male and female replacements
Curriculum of a bull
Years Event
0 Birth of Bull
1.25-1.50 Use as Testbull
2.00-2.25 Daughters are born
4.50-4.75 Daughters calve
5.50-5.75 Daughers finish first lactation,
Estimation of breeding value
Selection and Culling of Test Bulls
Use as proven bull (onwards)
6.25- Male and female offspring born
Some used as testbulls
• Please note, that between semen produced as testbull and semen produced as proven bull there are about 4.5 years (sometimes even much more).
• In good organised breeding schemes we have anything between 50 and 120 kg genetic progress per year.
• With these assumption we get the next picture
0 5 10 15 20 25 30 35
50
00
55
00
60
00
65
00
70
00
75
00
80
00
Comparison proven bulls vs test bulls
Years
Ge
ne
tic L
eve
l
proven bulls
test bulls
Mean of all proven bulls
Mean of selected proven bulls
• Under the assumptions made we get
• Average Genetic level of testbull
4600+30xG = 4600+30x80=7000kg
• Average Genetic level of a proven bull
4600+25.75xG+irsA =
4600+2060+1.5x0.9x500=7335 kg
Offspring of a test bull: (4600+7000)/2=5800
Offspring of a pro. bull: (4600+7335)/2=5967
Thus we have a difference of 167 kg
• Given a fixed budget of 15,000.00 US$
and price for testbull is 3.00US$/dosis and for proven bull 12.00US$
• We can either buy
5000 units semen from test bulls or
1250 units semen from proven bulls
• Given that the local population has a mean of 4600 kg then
Testbulls: (5800-4600)x800=960,000 kg milk
Pro.bulls: (5967-4600)x200=273,400 kg milk
What about male offspring?
• Female offspring has 0 to 3 female offspring
• Male offspring in AI can have thousands female offspring
• Daughters of a bull from a testbull has a superiority of 600 kg
• Daughters of a bull from a proven bull has a superiority of 683.50 kg
• If in AI such bulls serve 35,000 cows then we have additional about
11,000x(683.50-600)=918,500. kg milk• The additional costs are 500x(12-3) = 4500 US$(with 35000 cows/year served it is doubtfull
if 500 doses are really needed)
Thus with a limited budget use ‚cheap‘ semen for female replacement and get best semen for male replacements
Some consideration of the impact of imported genetic material
• Let‘s assume that the cows of Nepal (the ‚crossbreds‘) would produce 4600 kg if they get European feeding standards.
• Then we would have 4600 kg vs 7000 kg
• Europeans would produce 50 % more
• Offspring of Locals X European would produce 25 % more (ca 1200 kg)
The difference was analysed between two breeds (Simmental vs German Friesian)
Overall the German Friesian produced about 16% more milk (ca 600 kg)
However, if the material was stratified according to th yield of the Simmental the following result was obtained:
Yield of Simmental
Superiority of ‚HF‘ (kg)
Superiority of ‚HF‘ (%)
2800-4000 340 11
4000-4800 560 16
4800-5600 650 17
5600-6000 860 18
• That means that farmers with better management profit more!
• Better genetics makes higher input more economic!
• The last two graphs show what happens if yield of crossbreds is a proportional increase or if it is more than proportional
0 1000 2000 3000 4000 5000
01
00
02
00
03
00
04
00
05
00
06
00
0
Comparison between local crossbreds and offspring of imported semen
proportional increaseEnvironmental score (mean of the locals)
Yie
ld o
f b
ree
ds
0 1000 2000 3000 4000 5000
01
00
02
00
03
00
04
00
05
00
06
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0
Comparison between local crossbreds and offspring of imported semen
super proportional increaseEnvironmental score (mean of the locals)
Yie
ld o
f b
ree
ds
• Conclusion
Do not only improve Genetics, but also management
• Thank You very much