Cost-Benefit Analysis of Herders’ Household Business Scale in the Multi Household Grassland Management Patterns: A Case Study of Maqu County in Qinghai-Tibetan Plateau

Abstract

This study conducted an analysis of total production costs, gross production values, and net margins across varying scales (small, medium, and large) within herder households operating under the multi-household management pattern. Data was sourced from a random sample of 35 herder households representing six multi-household management patterns in Maqu County, Qinghai-Tibet Plateau. The results revealed that average total production costs per sheep unit were $168.43, $107.36, and $92.89 for small, medium, and large-scale operations, respectively. Gross production values in these scales were $243.50/SSU, $245.23/SSU, and $239.53/SSU. Significantly, large and medium-scale herder households achieved higher net margins, at $146.64/SSU and $137.87/SSU, while small-scale households obtained $75.06/SSU. An intriguing revelation is that net margins for large and medium-scale households predominantly fall within the range of $100.01/SSU to $200.00/SSU, signifying that while scaling may curtail total production costs per sheep unit, it does not assure enduring increases in net margins. These findings hold paramount implications for policymakers as they reassess the feasibility of upscaling multi-household management pattern operations for grassland ecological restoration on the Qinghai-Tibet Plateau. While scaling up can yield cost efficiencies, it does not inherently translate into sustained net profit growth. Hence, astute consideration of these insights is imperative in evaluating the potential of scaling up multi-household management patterns for grassland ecological restoration initiatives.