Milk Production and Resource Use Efficiency in Madurai District of Tamil Nadu: An Economic Analysis

A study was conducted to examine the cost structure and resource use efficiency of dairy farms at the Madurai district of Tamil Nadu. The dairy farmers were selected by using multi stage random sampling technique. Tabular analysis and Cobb-Douglas production function were used in this study. Total costs per lactation per animal estimated were of the order of Rs.12776.09, Rs 11791.20 and Rs.12079.28 and returns per rupee of investment 0.78, 1.08 and 0.95 respectively on small, large and pooled farms. Feed cost was the higher input cost in dairy farming (61.6%). The cost of production milk per litre was less in case of large farms (Rs. 4.62) compared to small farms (Rs. 5.39). Results indicated the inverse relationship with the size and the herd of the total costs, due to economies of scale. Functional analysis showed barring human labour on small farms all the selected input variables such as green fodder, dry fodder, concentrates and health care were positive and significant impact on the production of milk indicating the potentiality of their further use.