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Profitibility of Loanee Dairy Farms in Selected Areas of Bangladesh

J. Alam
Chief Scientific Officer
Bangladesh Livestock Research Institute, Savar, Dhaka.

A. Sarkar
Social Officer
Social Investment Bank Ltd. Motijheel, Dhaka.

A.B.M.M. Haque
Projecct Coordinator
Rice-Fish Productivtty Enhancement Reserch, ICLARM, Bangladesh.

M.H.Rahman
Scientific Officer
Bangladesh Livestock Research Institute, Savar, Dhaka.

Abstract/ Executive Summary:

A study was conducted on 100 farmers who took loan from the Bangladesh Krishi Bank (BKB) for dairy farming. Ten regions of the BKB were surveyed taking 10 samples from each region on a random basis. The results of the survey show that the dairy farms were marginally profitable. The net returns per year was Tk.15,555.23, but the profit margin in relation to total investment was small. The benefit-cost ratio was 1.13. Each farm had, on average, received an amount of Tk. 2,38,925.53 as loan from BKB and the repayment rate was only 25.21 per cent in 1994-95 in the study areas.

Keywords: Profitability, BCR, Sustainable, Repayment rate

Location: Khulna, Jessore, Manikgonj, Gazipur, Tangail, Mymensingh, B.Baria, Sylhet, Narayangonj and Feni in Bangladesh.

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Milk

Objectives:

i) To assess the profitability of loanee dairy farm.

ii) To identify the problems faced by the dairy loanee farmer.

iii) To find out the solutions of the problems.

Methodology:

Selection of samples: Ten districts namely, Khulna, Jessore, Manikgonj, Gazipur, Tangail, Mymensingh, B.Baria, Sylhet, Narayangonj and Feni in Bangladesh were selected purposively for this study. All these districts have been covered by the Bangladesh Krishi Bank (BKB) for providing loans for the purpose of livestock development and required number of loanee farmers were available for sampling. A list of farmers having credit from the BKB and reared at least two milking cows during the study period was prepared. Selection of the respondents was made randomly from the list. In all, out of 397 loanee dairy farmers 100 dairy cow owners were selected taking 10 from each district.

Preparation of the Survey Schedule: A survey schedule was designed in accordance with the objectives of research. Before preparing the final one, the draft schedules were pre-tested in the study areas. Data on socio-economic characteristics of dairy farm owner, inventory of the dairy herd and other assets, productivity of dairy cows, items of cost and returns, problems faced by the dairy farm owners in raising dairy cows, and their suggestions for improvement of the dairy industry were collected through the survey schedule. The data were collected during 1996 for the year 1995. The collected data were analysed using statistical techniques such as, mean, percentages and ratio for better precision of analysis.

Estimation procedure for costing: The procedure used to estimate the cost of production and returns of the dairy farms is given below:

A. Cost of dairy farms: It includes feed cost, labour cost, veterinary cost, and interest on operating capital and interest on credit.

B. Returns from rearing dairy animals: It includes the value of milk, cowdung and inventory change. 1. Returns from milk: It includes the sale proceeds of quantity of milk sold, value of milk given as gift and used for home consumption at the prevailing market rate. 2. Returns from cowdung : It is the value of all cowdung produced in the farm during the year under study. It was calculated on the basis of current market price. 3. Returns from inventory change: Inventory change is defined as the difference between the total value of cattle at the beginning of the year plus animals bought and the total value of cattle at the end of the year animals sold ,eaten and died/stolen.

Source of Information: Bang. J. An. Sc. 1999, 28(1-2) : 37-45 (ISSN 0003-3588)

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The results of the survey show that the dairy farms were marginally profitable. The net returns per year was Tk.15,555.23, but the profit margin in relation to total investment was small. The benefit-cost ratio was 1.13. Each farm had, on average, received an amount of Tk. 2,38,925.53 as loan from BKB and the repayment rate was only 25.21 per cent in 1994-95 in the study areas.

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