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Economics of Small Scale Dairy Farming in Urban Areas of Bangladesh - Constraints and Opportunities

A S M Golam Hafeez
Associate Professor
Department of Agricultural Finance, Bangladesh Agricultural University, Mymensingh

M. Wakilur Rahman
Associate Professor
Department of Rural Socilogy, Bangladesh Agricultural University Mymensingh

Abstract/ Executive Summary:

The present study was undertaken to assess the economic performance of small scale dairy farming in two selected urban areas- Gazipur (Industrial area) and Dinajpur (Non-industrial area). A total of 100 small-scale dairy farms were chosen as sample for the study taking 50 dairy farms from the urban areas of each district adopting simple random sampling technique. Data were collected through direct interview with the small dairy farm operator using pre-designed interview schedule. The findings showed that the gross cost (mean) of rearing animals was Tk. 169.91/farm/day in Dinajpur as against Tk. 262.90 in Gazipur, net return/day/animal was Tk.51.53 for dairy farm in Dinajpur and Tk. 79.28 for dairy farm in Gazipur, average milk production/farm /year was 1435 liters in Dinajpur and that was 1775 liters in Gazipur. The Benefit-Cost Ratio (BCR) was found to be 1.68 for dairy farm in Dinajpur and 1.84 for dairy farm in Gazipur which implies that small-scale dairy industry is a profitable enterprise. The major constraints faced by the dairy owners were identified as paucity of green grass, high price and unavailability of feed and medicine, lack of grazing land, inadequate veterinary services, lack of training and technical know how and lack of institutional credit facilities. Small scale dairy industry could be the main sources of providing nutrition to the urban people and as a means of earning extra- income for the smallfarm-holders if appropriate measures are taken.

Keywords: Profitability, marketing channel, small- scale dairy farm, urban area

Location: Dinajpur and Gazipur

Start Date: 00-00-2010

End Date: 00-00-2011

Program Area: Socio-economic and Policy

Commodity: Animal

Objectives:

To assess the socio-economic characteristics of the small-scale dairy farm households
To estimate the cost, return from dairy farm and marketing of milk in the study areas
To identify the constraints related to dairy farming in selected urban areas

Methodology:

Selection of the Study Areas: Dinajpur- a non- industrial area and Gazipur- an industrial area were purposively selected for this study. Then two urban areas- Rajbati and Gunjabari of Dinajpur town and Laxmipura and Chandona were selected according to the advice of the DLS officials since small scale dairy farmers exist there. Selection of Sample, Sampling Technique and Data Collection: A list of dairy farm household was prepared with the help of the concerned department. Then from the list a total of 100 dairy farm households (having one or more dairy cows) were selected taking 50 sample farms from each of the selected district. Random sampling technique was adopted to select the sample. A farm survey method was adopted to collect required data for the present study. An interview scheduled was prepared in accordance with the objectives set for the study. Afterward the interview schedule was pre-tested. After finalizing the interview schedule, required data were collected by the researcher and his team through direct interview with the dairy owners. Collected data were scrutinized, summarized and entered into the computer and analyzed. Besides collection of primary data, secondary data and information were collected from various published and unpublished sources. Analytical Technique: Both descriptive and statistical analysis was used to analyze the data. For descriptive analysis such as mean, percentage, graphical presentation was done based on various income groups in two study sites. In fact, the descriptive analysis was used to illustrate the whole scenario of the small scale dairy farming in both study sites- Dinajpur and Gazipur. More importantly, statistical technique was used to estimate the effect of different variables. Analytical model: Cobb-Douglas production function model was used to determine the effects of key variables. To identify the most important variables in the production process of milk of small scale dairy farms, the following specification of the model was adopted. The Cobb-Douglas production function was transformed into following logarithmic form so that could be estimated by the Ordinary Least Squires (OLS) method.

Source of Information: International Journal of Science and Research (IJSR) Impact Factor (2012): 3.358

Article Link (Online Journal):

Funding Source:

1. Government

Budget:

Total Budget (Tk.) :

Achievement/Findings:

Based on the results of the study it may be concluded that small scale dairy industry is profitable enterprise, though this enterprise faces many constraints for its rapid development and growth. The demand for milk in the urban areas is very high and dairy owners can not fulfill the demand for milk with their limited milk production. Paucity of green grass, high price and unavailability of feed and medicine, lack of grazing land, inadequate veterinary services, lack of training and technical know how and lack of institutional credit facilities were identified as the major constraints faced by the small scale dairy holders in the study areas. There is an ample scope to increase the production of milk from the existing level if the dairy farm owners are provided necessary facilities like adequate feed supply at reasonable prices, necessary drugs, adequate veterinary services, technical training, and access to credit at an easy terms and conditions. Government should provide free medicine and veterinary services to the small scale dairy holders that would minimize their cost of production.

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