Economic Efficiency among Commercial Dairy Farms in Kerala: Costs and Returns Perspective: 24176
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https://doi.org/10.35716/IJED-24176
Author: Unni Ravi Sankar, Ramanjaneya Reddy Konda, Biswajit Sen and Ajmer Singh
Author Address: Division of Economics, Statistics and Management, National Dairy Research Institute (NDRI), Karnal-132001 (Haryana)
Abstract
The study was conducted in the state of Kerala to assess the technical
and allocative efficiency of commercial dairy farms (CDF). Primary data were
collected from 180 commercial dairy farms using a pre-tested interview schedule
across three districts: Wayanad, Palakkad, and Thiruvananthapuram. The economic
efficiency of commercial dairy farms was 0.74, with technical efficiency of
0.88 and allocative efficiency of 0.84. The efficiency was found to be higher
in large CDFs than in small and medium ones. When comparing across the
district, Wayanad was found to be more economically efficient than Palakkad and
Thiruvananthapuram. Variables such as milk price, milch number, all feed and
fodder, and labour cost were found to be significant and positively affecting
milk yield when estimated using the stochastic
frontier production function. It was also found that the overall returns across
all the CDFs were positive. Determinants such as education, experience,
operational holding, and social involvement are important and have a favourable
impact on the technical effectiveness of dairy farms. Mechanisation significantly enhances the efficiency
of Commercial Dairy Farms (CDFs). Accordingly, development authorities can
propose subsidies for mechanisation equipment, recommending financial
assistance covering at least one-third of the equipment cost to accelerate
technology adoption.
Keywords:
Allocative efficiency, data envelopment analysis, stochastic frontier production function, technical efficiency.
JEL Codes
C01,
C19, C40, C83, D61.