ECONOMIC EVALUATION OF NEW TECHNOLOGY: THE CASE OF THE MILK GROWTH HORMONE BOVINE SOMATOTROPIN

Abstract

The purpose of this paper is to discuss development and use of procedures to evaluate application of Bovine Somatotropin (BST) with respect to profitability at farm level. BST remains a controversial product and uncertainty surrounding its appropriateness as technology is increased by the fact that no local study in connection with its profitability has been conducted previously. On-farm response trials at three representative case study sites and a personal telephonic survey conducted amongst existing users of BST provided a valuable basis to develop and apply a management simulation model. The model and procedures of analysis are flexible and could be applied to other problems of dairy farm management. Results indicated that, given the conditions of research, utilisation of BST proved to be profitable. BST has the capability to improve profitability of certain dairy businesses. The critical factors in determining profitability of BST utilisation, apart from management, are the milk price, response to BST as well as BST and feed cost. Milk production quotas may have a negative effect on profitability of BST.