ECONOMIC ANALYSIS OF MILK PRODUCTION IN NORTH-EASTERN STATES
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Date
2023
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Publisher
ICAR-NDRI, KARNAL
Abstract
The Indian government intends to bring about a paradigm change in the long-term
planning of the country by concentrating its efforts on less developed regions like the
North-Eastern States to enhance the agriculture and livestock sectors. Therefore, the
current study "Economic Analysis of Milk Production in North-Eastern States," was
undertaken to assess the yield gaps in milk production and factors contributing to these,
decompose the effect of crossbreeding technology in milk yield, examine the economic
efficiency of dairy farms in milk production and to identify and prioritize the constraints
in milk production. The N-E area consists of 8 states, of which Assam, Tripura, and
Meghalaya were chosen based on the highest milk production. The sampling units (i.e.,
households) were chosen using a multistage sampling procedure. A total of 300 dairy
households were chosen for this study. Both primary and secondary data were collected
from respondents and research stations on a pre-tested schedule. The study employed a
combination of tabular analysis and econometric techniques in order to effectively
accomplish its objectives. The study revealed that the Yield Gap-II in milk production
was higher than Yield Gap-I in the region. Among the states, Meghalaya’s Yield Gap-II
percentage (35.60 %) was lower than Assam (51.70 %) and Tripura (48.87 %). The
percentage of total yield gap with respect to actual farm yield worked out to be 69.96 per
cent, comprising YG I as 24.98 per cent and YG II as 44.47 per cent in the region. Thus,
the percentage of YG II accounted for two-thirds of the total increase in actual milk
yield. It was found that the experience in dairy farming, size of the animal shed, feed and
fodder price, distance to the research station, training, labour allotted for dairy, dairy cooperative
membership, and access to information significantly influenced the milk Yield
Gap-II. The adoption of new dairy technology, i.e., crossbred cattle in the place of
existing dairy technology, i.e., indigenous cow led to higher per day milk yield (total
percentage gain estimated was 87.36 %). Around 67 per cent of the total change in milk
production was due to the difference in the levels of technological efficiency (both
neutral and non-neutral) of crossbred cow vis-à-vis indigenous cow and the remaining
(nearly one-third) has been contributed by increased level of input use (20.42 %). The
percentage change in milk output due to new technology was found to be the lowest in
Tripura (82.81 %). This study indicated that the small farms were found to be more
technically and economically efficient than the large and medium category dairy farms.
Even though medium-category farmers were not the most technically efficient, it was
found that they were allocatively more efficient. Large farmers were found more input
redundant in the study area making them less technically efficient. Socio-economic
factors i.e., non-farm annual income, access to information, herd size and membership of
dairy cooperative society, and experience, were significantly influencing farmers’
technical efficiency in milk production. Among all the significant variables, non-farm
income, access to information and membership in dairy cooperative society had a
positive influence, while the herd size had negative effect on efficiency of dairy farms.
The estimated loss due to the major problems was relatively higher in Tripura (Rs. 2.80
million) than in Assam (Rs. 2.65 million) and Meghalaya (Rs. 2.52 million). Study
revealed that economic loss due to repeat breeding (Rs. 1.8 million) and abortion (Rs. 3.1
million) was the single most important problem in the region. Total estimated loss due to
the affected animals in surveyed farming households was Rs. 8 million annually. Feed &
fodder related constraints were found to be the major problem in the region with scaling
factor of 0.288.