Optimum Dairy Based Farming Systems For Stable Income Of Small Farms

Optimum Dairy based Farming System Models for Stable Income of Small Farms

Nagaraja, G.N., Komala C.N, Nanjundegowda, G.and Muthappa, P.P. University of Agricultural Sciences, Bangalore, India.

Abstract Farming system is an integrated set of activities that farmers perform in their farms under their resources and circumstances to maximize the productivity and net farm income on a sustainable basis. The present study has been made to identify types of farming system and to assess the potentialities for increasing farm income through reallocation of resources in farming system. The data were collected from 120 respondents pertaining Kolar district, India during 2000-01. The optimum farming system helped to increase in maximum net farm income to the extent of 213 per cent from crop + dairy + forestry system over existing farming system. Mulberry was suggested in all the seasons in tube well-irrigated land while forestry under dry land. The increase in the farm income was due to the change in the cropping pattern, interaction and interrelation among different enterprises of various farming systems.

Introduction In India, the average size of the farm has been declining and over 80 million out of 105 million operational holdings are below the size of one hectare and pose a serious problem in general. The farmers particularly the small farmers are unable to meet both ends with the income from cropping alone. The situation is further weakened due to repeated failure of monsoon on one side and on the other side, due to ever increasing population and decline in per capita availability of land. Further, there is hardly any scope for horizontal expansion of land and only vertical expansion is possible by integrating various farm enterprises (Nagaraja, 1995).

Dairying plays a vital role in the country’s agricultural economy, which being the second largest contributor to the gross agricultural produce. In the recent past, milk production has increased steadily due to the successful implementation of Operation Flood Programmes through combined efforts of research institutions, extension agencies, production and marketing networks, institutional credit policy and more important the enterprising, innovative nature of farmers practicing and operating dairy based farming systems. Dairy enterprise when combined with other enterprises on scientific lines offers great opportunities for increasing farm income and employment, particularly to the weaker sections of the rural community. Hence, the study of dairy based farming systems are helpful to the farmers in rational economic decisions by selecting the appropriate combination of enterprises by reallocating their scarce resources efficiently (Komala, 2002).

Methodology Kolar district is one of the major agrarian district where field crops, are combined inter alia with allied enterprises such as dairy, sericulture, poultry and piggery being adopted by the farmers. Farming, therefore, is integrated into a system. Hence, Kolar district is purposively selected.

This study has a special focus on the dairy sector. In the first stage, two taluks out of eleven taluks in the district were selected where dairy is practiced along with crop and other enterprises to a large extent. In the second stage, six villages were randomly selected in probability proportion to total number of villages in each taluk. Thus three villages from each taluk were randomly selected and from each of these selected villages. A sample of 120 farmers was selected randomly within selected villages. In each of the selected village an investigation was made to identify the different farming systems prevailing such that dairy enterprise generated at least 10 per cent of the total farm income.

Source and Nature of Data The data were collected by personal interview with the help of a pre-tested comprehensive interview schedule. The usefulness of the study was explained to the farmers prior to enquiry to elicit their co-operation. The primary data were collected on socio-economic conditions of the sample farmers like age, education, size of the family, number of dependents, cropping pattern, size of operational holdings, existing farming system etc. Information on cost of cultivation, inputs used, yield of crops, price of output, expenses and income from different enterprises was also gathered.

Linear Programming Linear programming (LP) technique formed the basis for obtaining the optimal solution for different enterprises followed by the sample farmers. The LP technique was employed to workout the maximum attainable returns by small, farmers through the optimum allocation of various crop and livestock (dairy), using available resources most efficiently and economically. Optimum allocation of resources is defined as one, which, given the physical, technical and resource conditions shows the activities to be undertaken and the extent of use of how much of each resource to each activity so that the net farm returns are maximized in a year.

Mathematical formulation of the model is as follows: n

Maximize Z =  Cj Xj j=1

Subject to the constraints, n

 aij Xj  bi (I = 1……… k) I=1 n

 aij Xj ≤ bi ( j = 1……… m) I=1 n  aij Xj = bi ( j = 1……… n) I=1

Xj ≥ 0

Where, Z = Net returns from all crop and allied activities included in the model.

th Cj = Net returns from i activity measured in rupees per hectare of land.

th Xj = Level of i activity in hectare.

th th Aij = Quantity of i input required per unit of j activity.

th Bi = Quantity available of the i resource.

Objective Function The objective function for the model in this study is the maximization of the annual net returns to owned resources. The gross returns per hectare of crop and per unit allied activities were calculated by using the data of sample farmers. Paid-out costs such as hired human labour and bullock labour, fertilizer etc. were directly subtracted from the gross returns. For dairying activity, gross profits are calculated by deducting variable expenses such as value of fodder, concentrates, animal health and veterinary care from gross income of dairy activity. The maximization of net returns (profit) is subject to the assumption and resource constraints imposed in the model. In case of sericulture activity the annual operating expenses of maintenance of mulberry garden is added to the annual production costs of cocoon rearing and then apportioned equally between the two seasons of the year.

Constraints and Requirements Some of the important constraints considered in the study are land, labour, consumption, fodder availability, borrowing. Land: Land available for cultivation is considered for two seasons (kharif and rabi). Cropping activities are considered both under rainfed and irrigated conditions and the crops occupying negligible area are not included in the model. The land available for cultivation includes owned land as well as the leased-in land with established mulberry garden. Labour: Agricultural year is divided into three labour periods and wages are indicated by negative values in the objective function for the respective labour hiring activities. Livestock: Majority of the farmers maintain livestock mainly for milk and draft power. Crossbred cows and buffaloes are the two main sources of milk. In recent years importance of dairying in the house hold economy is on increasing as a supplementary/ complementary source of farm income. The dairying is an important sector in the farm economy, which is an efficient converter of low- value crop by-products into nutritious high-value milk. The by-products of livestock are an important source of crop nutrient, which is very essential for maintaining the health and fertility of soil in the region. Consumption: This activity is included to account for value of household consumption by linking farm production and output sale. Selling price of items reflects the cost of consumption in the objective function. Due to subsistence nature of farming, farmers try to produce their consumption requirements on the farms rather than purchasing from the market. This is particularly true among small farmers. To meet the consumption requirements of the family, the farmers are required to produce food crops viz. ragi, paddy and milk. This is imposed as a constraint in the models. Borrowing: Interest rates reflect the cost of borrowing in the objective function. The borrowing activities are provided to encompass only short-term credit. Fodder availability: Ragi and Paddy enterprises produced fodder, which could be used for livestock. Fodder production was a pre-requisite for dairy to meet at least 50 per cent of the requirement of fodder. This is also included as the constraint.

Activities in the Model: Activities specify the resources, which could be put into various alternative uses. The activities included in the model are- 1. Crop, dairy, poultry and silk cocoon production activities. 2. Labour hiring activities. 3. Product and labour sale activities. 4. Borrowing activities. 5. Consumption activity.

Input-output co-efficient: The input co-efficient in this study pertained to land, labour, capital, FYM (farm yard manure), fodder availability, fertilizer and fodder requirement. Input co- efficient is the average requirement of the ith input per unit of jth activity. It is calculated on per hectare basis in case of crop and sericulture enterprises. Totalling and averaging the relevant input-output data for different farm categories derive the input co-efficient for different farm categories. For dairy enterprise, it is derived per animal basis. To accomplish the objective of maximization of net farm income to the family owned resource, the linear programming technique is employed in this study.

Results Net farm income Farming system aimed at the efficient use of resources to maximize the income. The details of net farm income derived from the existing farming system are furnished in the table 2. The farmers realized a maximum average net income of Rs. 61,558 from crop + dairy + forestry + sericulture followed by crop + dairy + sericulture of Rs.59, 593.

Normative farm plan for various farming systems The detail of normative farm plan for various farming systems under the objective of maximisation of net income is furnished in table 3.

In accomplishing the objective of maximisation of net farm income, the farmers could increase their net income from Rs.52, 004 to Rs.135, 557 (160 per cent), Rs.59, 593 to Rs.143, 146 (140 per cent), Rs.53, 158 to Rs.144, 549 (171 per cent), Rs.53, 969 to Rs.168, 999 (213 per cent) and Rs. 61,558 to Rs.149, 445(142 per cent) from models S1, S2, S3, S4 and S5, respectively.

Conclusions It can be concluded that appropriate combination of enterprises with dairy not only helps to increase net farm income but also utilize all available resources efficiently. The farming system approach provides an opportunity for effective recycling of the product and by products of any one of the components as input on the other component linked in the system. It helps to generate flow of cash to the farmers round the year by way of disposal of milk, meat, poultry eggs and silk cocoons. The extension agencies should plan strategies for small farmers to reduce the risk in farming and to augment net farm income from the farm as a whole.

References: Komala, C. N., 2002, Risk efficient farming system for sustainable agriculture – models for Kolar district of Karnataka. M.Sc. thesis (unpublished) submitted to the University of agricultural Sciences, Bangalore, India, p. 161. Nagaraja, G.N., 1995, A study on farm business management in Bangalore rural district of Karnataka: compromise programming approach. Ph. D. thesis (unpublished) submitted to Tamil Nadu Agricultural University, Coimbatore, India, p.215. Table 1: Land holding among small farmers

Sl.NO. PARTICULARS AREA (Ha.) (A) Area owned 1. Dry land 0.6 (54.54) 2. Tube well irrigated land 0.6 (45.45) 3. Garden land - TOTAL 1.2 (100.00) (B) Leased land 1. Leased-in a) Dry land 0.068 b) Irrigated land 0.008 2. Leased-out - Average size of Operational holding 1.268

Note: Figures in the parentheses are the percentages to the total

Table 2: Net farm income from the existing farming system

SL. FARMING SYSTEMS Net income (Rs.) NO.

1. C+D (S1) 52,004

2. C+D+S (S2) 59,593

3. C+D+P (S3) 53,158

4. C+D+F (S4) 53,969

5. C+D+S+F (S5) 61,558

Note: C=Crop, D=Dairy, S=Sericulture, F=Forestry and P=Poultry Table 3: Normative farm plan for maximization of net income (In ha.) Farming systems C+D C+D+S C+D+P C+D+F C+D+F+S Seasons (S1) (S2) (S3) (S4) (S5) / enterprises I. Crop Kharif Dryland 0.66 0.66 0.66 - 0.1 1.Ragi+Redgram Tube well irrigated 0.34 0.43 0.34 0.14 0.04 2.Ragi HYV 0.35 0.1 0.35 0.56 0.48 3.Paddy Rabi Tube well irrigated 0.7 0.53 0.7 0.7 0.53 4.Potato Summer Tube well irrigated 0.7 0.53 0.2 0.2 0.53 5.Tomato 2.0 2.0 2.0 2.0 1.0 II. Dairy (No.) - 0.16 - - 0.16 III. Sericulture - - - 0.66 0.56 IV. Forestry Net farm income (Rs.) 135,557 143,146 144,549 168,999 149,445 (160) (140) (171) (213) (142)

Note: Figures in the parentheses indicates percentage increase over existing farming system Mailing address: Nagaraja.G.N., University of Agricultural Sciences, Farm Management Specialist, EEU, UAS, Hebbal, Bangalore - 560 024, India, Phone number 0091-80- 3514249, [email protected]