Economic analysis of milk production among small holder dairy farmers in Punjab: A case study of Amritsar district

The present study analyzed economics of milk production among small holder dairy farmers in Punjab. Amritsar district was selected purposively because the average milk production was quiet high in the district than state average and has well developed milk cooperative societies. A sample of 80 dairy farmers consisting of 20 dairy farmers each from landless (LL), marginal (MR), small (SM) and other (OT) categories were selected from two blocks and four villages of Amritsar district. The average herd size was 6.35, 7.70, 9.40 and 10.05 dairy animals for LL, MR, SM and OT dairy farmers, respectively. The total variable cost was 145948.90, 170122.85, 200487.20 and 204122.60 for LL, MR, SM and OT dairy farmers, respectively. The average variable cost was to the tune of 180762.60. Feed and fodder cost was accounted for 83.84 per cent out of the total variable cost. The total fixed cost accounted was 32733.5, 37537.59, 42640.5 and 46723.75 for LL, MR, SM and OT dairy farmers, respectively. Gross income from dairying was accounted to be 306946.80 for LL, 397644.90 for MR farmers, 458120.60 for SM and 511401.50 for OT dairy farmers, respectively. The cost and income had direct relationship with herd size for different categories of dairy farmers. To estimate the resources use efficiency in milk production, Cobb Douglas Production Function was used. The variables included in regression model were green fodder, dry fodder, concentrates, labour hours and veterinary and insemination charges considered as independent variables and milk production per farm per day as dependent variable. The coefficient of multiple determination (R2) was 0.80 and indicating that about 80 per cent of total variations in milk productivity were explained by the variables included in the selected regression model. The coefficients of dry fodder and concentrates were positive and significant indicating increase in feed and fodder inputs will increase the milk productivity.