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MyGAP From The
Perspective of Livestock
Industry --- What, Why,
How and When?By
Cliff Kwei Shu Cheng
FLFAM
25 April 2016
What is MyGAP?
Skim Amalan Ladang Ternakan (SALT) was introduced by the
authority in 2003 to promote food safety and improve quality
of farming. This programme covered the practice of
biosecurity, labour safety, farm management and pollution
control in accordance with Good Animal & Husbandry Practice
(GAHP, MS 2027:2006) and Amalan Pertanian Baik (APB@GAP)
In recent years, SALT has been upgraded to Malaysian Good
Agricultural Practices (MyGAP) because GAP concept is widely
accepted across the world.
Why is MyGAP?
In Malaysia, poultry farms are oversight by Department of Veterinary Services (DVS) which plays an important role in improving farming practices to ensure the livestock produced in Malaysia has the quality that satisfies domestic and international demands.
Therefore, DVS does not only safeguard farms from catastrophic diseases (e.gND, IBD and AI) through introduction of vaccination, but also encourage establishment of modern farming practice --- MyGAP.
MyGAP can help farmers to achieve better performance and strengthen the competitive edge of Malaysia livestock products in global market.
MyGAP is the basic prerequisite for farms to export their livestock to overseas.
Once the farm is accredited with MyGAP, the community surrounding the farm will also be benefited.
Stakeholders’ Relationship of MyGAP Farms
MyGAP
Farms
Consumers
Local
community
Environment
Exporters
Farm hands
Livestock
Authorities
How does a MyGAP farm look like?
Closed House System
Climate Control
Higher capacity
Lower FCR, lower mortality and higher average bodyweight
Automation --- Less manpower required
Farm management
Comprehensive biosecurity programme (e.g. feed storage, water treatment and
sanitisation)
Drugs & medication monitoring (e.g. vaccination record)
Traceability (e.g. record keeping, SOP)
Audit (e.g adequacy, compliance, surveillance and review)
Features of MyGAP Farm
Less pollution
Flies control --- manure treatment
Waste water treatment before discharge
Animal welfare
Less stress
Higher carcass yield
Employees’ safety
Lower probability of disease outbreak
Better workplace conditions
Example of MyGAP Farms: Layer House – Part 1
Closed Layer House Layers in cages
Example of MyGAP Farms: Layer House – Part 2
In House overview Eggs collection
Example of MyGAP Farms: Broiler House – Part 1
Farm overview AutomationChicken in house
Example of MyGAP Farms: Broiler House – Part 2
Vehicle wheel dip Foot dip at House entranceRoom for sanitisation
Example of MyGAP Farms: Broiler House – Part 3
Waste water treatment Incinerator Organised drug store
Example of MyGAP Farms: Broiler House – Part 4
Farming Record Drugs & medication record
Benefits & Cost
Benefits Cost
• Economies of scales • Higher expenses
• Export potential • Higher investment cost
• Better farming performance • Additional workload
• Higher revenue
• Tax incentive
However, it is justified to generate higher risk-adjusted profit compares to non-
MyGAP farm
Feasibility of Investment
What is the bankers’ main concern when they are considering to finance your business?
*tax rate is 0% due to incentive granted by the government
Example: Calculation of Net Profit and
Performance Index (for illustration only)
Assuming contract price of DOC and feed is as follows:
RM1.60/DOC
RM81.00/bag (pellet) and RM83.00/bag (crumble)
RM4.05/kg harvest
Operating cost BEFORE MyGAP (per DOC basis)
Drugs & Medication
Manpower
Utility
Depreciation
Maintenance
Others
Farming performance BEFORE MyGAP
No of birds = 80,000
FCR = 1.66
Mortality = 5.8%
*Average bodyweight = 2.13kg
Average Day = 35 days
Assume RM0.80 per DOC
*Average bodyweight is adjusted after mortality
Example: Calculation of Net Profit and
Performance Index (for illustration only)
Example: Gross profit BEFORE MyGAP
Example: Calculation of Profit and
Performance Index (for illustration only)
Example: Performance BEFORE MyGAP
Example: Calculation of Net Profit and
Performance Index (for illustration only)
Assuming contract price of DOC and feed is as follows:
RM1.60/DOC
*RM80.00/bag (pellet) and *RM82.00/bag (crumble) --- using bulk can reduce cost by RM1.00/bag based on market norm
RM4.05/kg harvest
Other operating cost AFTER MyGAP (per DOC basis)
Drugs & Medication
Manpower
Utility
Depreciation
Maintenance
Others
Farming performance AFTER MyGAP
No of birds = 100,000
FCR = 1.61
Mortality = 4.2%
*Average bodyweight = 2.27kg
Average Day = 35 days
Assume RM1.10 per DOC
Example: Calculation of Profit and
Performance Index (for illustration only)
Example: Gross profit AFTER MyGAP
Example: Calculation of Net Profit and
Performance Index (for illustration only)
Example: Performance AFTER MyGAP
Comparison BEFORE And AFTER MyGAP
BEFORE MyGAP AFTER MyGAP
FCR 1.66 1.61
Mortality 5.8% 4.2%
Ave. Bodyweight 2.13 kg 2.27 kg
Ave. days 35 days 35 days
Capacity 80,000 birds 100,000 birds
Manpower per DOC As benchmark Relatively decrease
Utility cost per DOC As benchmark Relatively decrease
Taxation per DOC 26% as per tax laws 0% (tax incentive)
Drugs & medication per DOC As benchmark Undeterminable
Depreciation per DOC As benchmark Relatively increase
Utility per DOC As benchmark Relatively increase
Export potentials None Yes
Comparison BEFORE And AFTER MyGAP
BEFORE MyGAP AFTER MyGAP
FCR 1.66 1.61
Mortality 5.8% 4.2%
Ave. Bodyweight 2.13 kg 2.27 kg
Ave. days 35 days 35 days
Capacity 80,000 birds 100,000 birds
Revenue RM 690,120.00 RM 919,350.00
Cost of goods sold RM 588,502.59 RM 747,675.76
Gross Profit RM 101,617.41 RM 171,674.24
Operating expenses RM 64,000.00 RM 110,000.00
Net profit RM 37,617.41 RM 61,674.24
Performance Index 345.34 385.92
Market Expansion & Export Potential
Past, Present and Expected Future Food
Consumption of Meat.
Source: World Agrilcuture: Toward 2015/2030, Economic and Social
Development Department, FAO Corporate Document Repository, retrieve:
20th April 2016, http://www.fao.org/docrep/005/y4252e/y4252e05b.htm
Trans-Pacific-Partnership-Agreement (TPPA) –
Part 1
Food safety and supply/demand is one of the most important topics in TPPA
Trans-Pacific-Partnership-Agreement (TPPA) –
Part 2
Relevant legislations and rules must be implemented in countries under TPPA,
which will have great impact on poultry industry:
Labour welfare
Animal welfare
Food safety
Drugs & medication control
Disease control & monitoring
Free trade
Anti-unfair-competition
etc.
MyGAP prepares farmers to compete with
global competitors and improves industry’s
self-sustainability over time!
ASEAN Economic Community (AEC) –
Part 1
Source: 2015 ASEAN Integration, Cuervo Property Advisory, retrieve: 20th April 2016, https://cuervopropertyadvisory.wordpress.com/2013/03/22/2015-
asean-integration-how-it-can-help-the-philippine-real-estate-industry/
ASEAN Economic Community (AEC) –
Part 2
Intensive competition in poultry industry is expected upon economic
integration in ASEAN region.
Particularly, Thailand has competitive advantage over other member
countries. Her performance in poultry industry is highly recognised around the
world due to its adoption of international farming practices and poultry
products with world class quality.
Learning and studying our member’s “production function” is one of the
effective ways to improve our productivity and stay in competitive position,
this is why MyGAP comes in.
What Make Farmers Reluctant to
Convert into MyGAP Farm?
Financial constraints
Banks consider poultry farming a risky business due to price
volatility, unpredictable climate change and disease problems --
--- barriers to borrow investment fund
Possible solutions
Specifically designed financial instrument e.g debt repayment backed by
sales
Government serves as a guarantor --- reduce credit risk
Others
What Make Farmers Reluctant to
Convert into MyGAP Farm?
Legal constraints
Different policies and rules between Federal and State
government, for example:
Land title conversion (ubabsyarat)
Deep well water usage
Setting in foreign labour policies (e.g renewal permit and skilled
worker retention)
Others
What Make Farmers Reluctant to
Convert into MyGAP Farm?
Technical constraints
Insufficient professionals (e.g. veterinarian)
Lack of innovation
No institute in Malaysia is studying domestic poultry
production and possible innovation that
accommodates local climate
Complicated medication procedures
Insufficient knowledge to apply drugs & medication
Insufficient education
No relevant education is provided public and private
schools (e.g. poultry specialised programme)
What Make Farmers Reluctant to
Convert into MyGAP Farm?
Market constraints
No developed commodities market to hedge farming risk
In Malaysia, only forward contract is used which exposes
more credit risk and business risk than futures contact.
Swaps and Futures markets should be encouraged to stabilise
market demand/supply and business risk transferring.
How do I apply MyGAP?
Kindly refer to the MyGAP guideline (Garis Panduan MyGAP)
Contact details:
Urus Setia
Bahagian Diagnostik dan Kepastian Kualiti
Ibu Pejabat Perkhidmatan Veterinar
Tingkat 2, Blok Podium 1A,
Lot 4G1, Wisma Tni, Presint 4
Pusat Pentadbiran Kerajaan Persekutuan
62630 Putrajaya
THANK YOU