Ranching: An Economic Yardstick

Summary

Cattle ranching in Kenya is predominantly in rangeland areas between 100 and 1,800 meters above sea level and the holdings range in size from 6,000 to over 100,000 hectares. Many of these ranches are in Laikipia in ecological Zones V and VI, and these are used as examples to explore the economic viability of ranching. The Laikipia Plateau also hosts one of the largest wildlife populations outside protected areas and these compete directly with cattle. Water is the limiting resource that attracts wildlife onto the ranches and keeps them there. The cost of purchasing an established 20,000 ha ranch, including stock and infrastructure, would be about US $3.5 million. The annual income from cattle would be approximately US $168,000 and the expenditure US $164,400. Projected income from increasing stocking rates from 2,000 to 3,000 head show an increase in profit from approximately US $3,600 to $43,000. Game cropping has been introduced on some ranches on a quota system. A 20,000 ha ranch is estimated to have a mixed wildlife population of approximately 1,500 animals. Cropping could bring in an additional annual income of US $8,350 but if hunting was re-introduced, that income could rise to US $35,000. Many ranchers survive only by diversification, usually into tourism and cultivation of small pockets of suitable land, others have had to sell. Some smaller ranches have survived by excluding large wildlife species and increasing their stocking rates. Speculators buy ranches for sub-division but most of the land is marginal or too dry for small scale farming. Ranching is not a viable land use option. It is an attractive lifestyle for some and possible for those who either inherit the land or have surplus money. However, food security, potential export earnings and employment can all be served, if the wildlife resource on ranching land is properly utilised in a mixed wildlife cattle operation.