Economic performance of case study dairy farm in Southern Ethiopia
Livestock Research for Rural Development
Debub University, Awassa College of Agriculture, Department of Agricultural Resource Economics and Management, P.O.Box 5, Awassa, Ethiopia; Debub University, Awassa College of Agriculture, Department of Animal and Range Sciences, P.O.Box 5, Awassa, Ethiopia
Focus on agricultural development in Ethiopia has seen a shift towards the smallholder sector, which is home and employment provider to more than 85 percent of the population. However, the viability status of enterprises within this sector remain largely un-probed research area on-the-ground. This article, which is based on case study of dairy farm at Awassa College of Agriculture, presents results of an economic analysis of the real state, constraints and opportunities vis à vis the performance of the Colleges' dairy farm for the past five years. Through a Gross Margin Analysis at farm level, the study established that the dairy farm is economically quite viable. Gross margins ranging from Birr 3,589 to Birr 77,920 were obtained in the years considered. However, given the higher genetic potential of the dairy animals and unsatisfied demand for milk in the market, the performance is much less than desired. The cost of production of milk per liter ranging from Birr 1.29 to 1.98 as compared to the selling price of Birr 2 showed a very sensitive profit margin. Feed expense, which accounts for about 90 % of the total expenses, is a major expense of the dairy farm. Identified constraints to production include poor infrastructure, bad sanitary condition, lack of organized record system, bureaucratic bottlenecks, low quality feeds and inefficient purchasing system. Established opportunities for improvement include enhancing housing and sanitary conditions, timely harvesting and better storage of home-grown feeds, following a planned purchasing and selling systems, use of a well -organized record systems, as well as aiming at economic and efficient production in order to achieve sustained production and economic performance. It is recommended that the farm may be liberalized from bulky bureaucratic purchasing procedures of the University.