Economic sustainability of family dairy farming within the scope of technical efficiency: a case study of Bafra District, Turkey

Abstract

The aim of this study was to investigate the economic sustainability of family dairy farming activity within the scope of technical efficiency. The study was conducted with 150 dairy farms selected using the stratified sampling technique among the members of Bafra Milk Producer Union in Turkey. Data envelopment analysis was used to estimate the technical efficiency of dairy farming. The cost and profitability of dairy farming was estimated using partial budgeting analysis. The average technical efficiency of the inefficient farms was 0.80 which indicates that the inefficient farms could reduce their average input use by 20%. The average costs of milk production per liter in the efficient and inefficient farms were $0.24 and $0.32, respectively. Feed and labor costs in the efficient and inefficient farms accounted for 65.3% and 68% of the total cost, respectively. While the average profit per liter for the efficient farms was $0.06, it was only $0.01 for the inefficient farms. The inefficient farms could sustain their economic viabilities with the government's livestock supports. The government should facilitate the farmers in achieving efficient use of resources in dairy farming and the link between efficiency and economic sustainability should be recognized as a matter of policy priority.