Economies of Size for Dairy Farming : A Linear Programming Analysis

Abstract

The main objective of this study was to assess the economies of scale of dairy farming in the study area with a view to inproving dairy productivity and increasing farm income. Forty-five dairh farms in the Muak Lek and Pakchong Districts were randomly selected for study. These sample were stratified into 3 operational size classes : small ( 10 dairy cows ) , medium ( 11-20 dairy cows ) , large ( 20 dairy cows ) . Linear programming model was developed to represent dairy farms with 3 operational size groups in the study. The major results indicated that net farm income would be increased through reallocation of land and labor. More productive cows per farm could be raised under the same resource constraints if optimally allocated. the net income derived from the model was higher than actual ner income by 45, 39 and 57 percent for small, medium and large farms, respectively. The stusy also indicated that if lairy farmers raise only milk cows ( instead of raising female calves as well which most do now ) , they will increase their income using the same amount of resources. The net income generated from the model is higher than that of the actual practice by 28, 44 and 39 percent on samll , medium and large farms, respectively. This analysis showed that the net incom for all sizes of dairy farms could be increased by optimal re-allocation of available resources.