Economic Analysis of Dairy Farming under Drought Prone Area in Maharashtra State of India

Background: Dairy farming is a cornerstone of the rural economy in India. Maharashtra, particularly its drought-prone districts, is critical in this sector. Despite challenges posed by erratic monsoons and limited irrigation, dairy farming remains a viable strategy for economic stability in these regions. The aim of this study was to examine the financial aspects of dairy enterprises, focusing on socio-economic characteristics, economic viability and constraints faced by farmers. Methods: The study employed a multistage stratified random sampling method. Key analytical tools included average and percentage calculations, BEP analysis and a Cobb-Douglas production function. Additionally, Garrett’s ranking technique was used to ascertain constraints in dairy farming, while the MOTAD model assessed profitability and risk. Result: The findings reveal that crossbred cow milk production is more lucrative than buffalo milk production, despite its higher average total expenditure per lactation. Break-even analysis confirmed profitability for both types of milk producers. Key determinants of milk production, such as green fodder, concentrate and labour, suggest areas for efficiency enhancements. Farmer-identified constraints include high feed costs, insufficient veterinary services and water scarcity. Utilizing the MOTAD model, the study recommends integrating dairy farming with crop cultivation to maximize returns, mitigate risks and enhance overall farm resilience in challenging environmental conditions.