Economic analyses of milk production among members and non-members offarmer collectives in Saurashtra

Abstract

Primary data collected for 2019-‘20 from 416 members and non-members of dairy farmer collectives (where farmers come together to market their milk collectively – this study considers a co-operative union and a milk producer company – both prominent forms of farmer collectives) in Saurashtra region of Gujarat are used to work-out the cost and returns in milk production from local cow and buffalo, and across dairy farmer categories. The analyses reveal that farmer collective organizations like co-operatives and producer companies are profitable in case of both local cow and buffalo milk production, and also for the small (1-3) and medium (3-6) herd-size category (in Standard Animal Units or SAU) of farmers. Both the overall average feed cost and Total Variable cost (TVC) per animal per day incurred by members is 12 per cent and 11 per cent less than that of non-members, respectively. Members of the co-operative receive annual bonus and members of the producer company receive annual dividends and cash incentives; with this additional benefit received by the members, their total return per litre is 25 per cent more than that of non-members. The overall average annual net returns from dairy per household for members are higher at Rs. 11,641/- compared to the returns of non-members at Rs. 3955/-. Expanding the reach of farmer collective organizations would benefit more dairy farmers by making dairy a more profitable enterprise for them.