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Economics of Milk Production in District Mardan, Khyber Pakhtunkhwa (KP), Pakistan

Economics of Milk Production in District Mardan, Khyber Pakhtunkhwa (KP), Pakistan

Neelum Andaleeb and Munir Khan

Department of Agricultural and Applied Economics, University of Agriculture Peshawar, Khyber Pakhtunkhwa, Pakistan


This study is conducted to find out the cost and net return of milk production in district Mardan. The aim of this study was to identify factors affecting milk production in the study area. A multistage sampling method was used to select a sample of 274 livestock farm households from 6 union councils, and a well-structured questionnaire was used to collect data from the female respondents through face to face interview. Cobb-Douglas production function and cost benefit analysis were used to arrive at the main conclusion. Results show that feed cost was the major component of total cost followed by labor cost. Average milk produced by buffalo and cow was 180 and 135 liters per month, respectively. Average total costs of milk production of buffalo and cow were Rs.12835 and Rs.10070 per month respectively whereas the average net income per liter from the buffalo and cow milk was Rs. 29 and Rs. 5 thus benefit-cost ratios for buffalo and cow is1:1.43 and 1:1.07, respectively, which show buffaloes were more productive and profitable than cows. Results from Cobb-Douglas production function analysis show that dry fodder, green fodder and daily labor hours have positive significant effect on milk production, while herd size has negative significant effect. Furthermore, the addition of estimated coefficients is less than 1, indicating a decreasing return to scale in milk production. These results suggest that small sized dairy farms are more productive and profitable; however, farmers need to utilize each input at its allocatively efficient level in order to get maximum profit.


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Sarhad Journal of Agriculture


Vol. 37, Iss. 3, Pages 714-1097


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