Economics of milk production in Chitwan district, Nepal.

M.Sc. Thesis, Department of Agri. Economics, IAAS, Rampur, Chitwan, Nepal. pp. 113

Timsina, K. P. 2005. [Student ID No. R-2003-AEC-01-M, Advisor: P. P. Regmi, Members: J. P. Sharma and J. P. Dutta].

The study on economics of milk production was conducted in Phulbari VDC of Chitwan district in 2005. A sampling frame was prepared after reconnaissance survey. Farms were grouped into 3 categories based on number of milch animals and landholding size. There were 80 samples, of which 26 small, 38 medium, and 16 large milk producers. These were selected with proportionate stratified random sampling. Similarly, 12 marketing agents were selected purposively to study the marketing aspects of the research. The positive correlation was found between livestock standard unit (LSU) and farm size. But opposite was found when per hectare LSU was estimated. This means more pressure of livestock was seen in small size category. About 77.5 percent of farmers were rearing milch animals for maintaining their tradition, where as 22.5% were fully aware with profitability of dairy farming. The average daily milk production of buffalo and cow was the highest in large farm size category followed by small and medium ones. The highest lactation period was seen in medium farm size category. The highest average daily milk yield in large category was due to large number of improved bred, and milch cows. Lower milk price was found in large category due to its low fat and SNF content in comparison of other categories. Production of milk was positively correlated with farm category, and cost of milk production was negatively correlated. The cost of milk production of small farm size category was 25% higher than large farm size category. The feed cost (31.78%) was the major factor for explaining the cost of milk production followed by rice straw and green grass cost (18.52%), labor cost (18.40%) and so on. When there was an increase in number of milch cows, total land use, and average lactation period, total milk production increased significantly. Benefit- cost ratio of large category was the highest (1.42) followed by medium (1.33) and small (1.23) farm size category. The highest gross margin (Rs. 15811.52) per milch animal was recorded in large farm size category followed by medium (Rs. 12863.66) and small farm size category (Rs.9987.40). There was significant difference in gross margin among the farm categories. The higher marketing efficiency was found in personal selling followed by private and DDC marketing. Although, there were more margins in DDC produced milk, the demand was higher for DDC produced milk than private dairy among the consumers. This was due to good reputation in DDC produced milk. The milk price, market security, and quick payment were significant reasons for determining location of selling. The study revealed the higher prospect of dairy farming on poverty alleviation; however, some preconditions, such as increased land size, improved breed, loan at reasonable interest rate, no frequent strikes etc. are needed. In more than 60 percent of the production activities, involvement of women was higher than men. However, involvement of male was higher in marketing activities like milk selling and marketing training. High price of feed was the major production constraint among different constraints regarding milk production. Low milk price and strikes were the major marketing constraints. The dairy business was found to be profitable and contributing significantly in the household economy. This study indicated that there is a high potential of commercial dairy farming in Chitwan with suitable production and marketing adjustments.