Profit Efficiency among Dairy Farms in the Eastern Region of India

ABSTRACT The profit efficiency in dairy farming is important to keep the farmer into dairy farming. The estimates of profit efficiency provide policymakers the information to what extent milk production can be expanded by removing the factors responsible for profit inefficiencies. Keeping this in mind the present study was undertaken in the eastern region of India to explore the profit efficiency among dairy farmers and factors affecting it. It was concluded that the mean profit efficiency of the dairy farmers was 0.7215 that is the profit could be increased by 27.85 percent if both technical and allocative inefficiencies were removed. Most of the farmers had their profit efficiencies in the range of 0.66 to 0.75. About 46.26 percent of the overall variation in actual profit from the maximum profit received by dairy farmers was due to differences in farmers’ practices and random factors. The profit efficiencies in the area could be increased by farmers’ education and experience in the business. Thus, the farmers should be periodically educated on appropriate feeding practices, and new technologies in dairying to overcome the inefficiencies.