Profit efficiency among peri-urban dairy farms in Odisha: an application of the stochastic frontier function

Abstract

This study examines the profit efficiency of peri-urban dairy farms in Odisha. Inefficiencies are found, and the profit efficiency ranges from 2% to 92%; the mean is 54%. The mean profit efficiency is 76% for large farms, the highest, 64% for medium-size farms, and 60% for small farms. Concentrate price and labour wage rates affect profits significantly. Profit inefficiency is impacted positively and significantly by herd size and negatively and significantly by herd composition; decreasing the herd size and increasing the number of crossbred cows would enhance profit efficiency. Improving education and dairy farm experience would enhance the profit efficiency.

Profit Efficiency of Milk Producers in Ethiopia: Empirical Evidence from Western Shewa Milk Shade, Walmara District

“…This result in Table 4 indicates that a 1% increase in labor cost will result in a 0.056% reduction in the profit of the dairy farmers. This result supports the finding reported by (Acharya et al, 2021;Lakshmipriya et al, 2023). The cost of concentrate feed also negatively and significantly affected the profit efficiency of dairy farmers at 1%.…”

“…The sign of the coefficient is as expected, and it indicates that households with a lesser number of cows are more likely to be profit-efficient compared to households having a greater number of cows. This is in agreement with the finding reported by (Acharya et al, 2021;Binita Kumari et al, 2020) Estimation of the Profit Efficiency Score The profit efficiency score of the sample households was estimated as presented in Table 5. From the result, the average efficiency score is 70.94% with a standard deviation of 22.55%, and the minimum and maximum efficiency scores of 10.14% and 99.94%, respectively.…”

Technical Efficiency in Sugarcane Crop - A Stochastics Frontier Analysis

“…The marginal farms were significant and negative sign indicate age factor determines the risk bearing ability depend upon the adoption of new technique and technology, younger farmers were interested in taking risk thereby urn supernormal profit and increasing profit efficiency [10,11]. The education coefficient for all farms were negative and significant for marginal, small and medium farms depict that a additional year of schooling of farmers were improve management skill and ability to use limited resources efficiently on farms.…”