A study was conducted to analyze the dairy farming sector of Bangladesh from an economic viewpoint. Primary data was collected from smallholder dairy farms using survey questionnaires. A Cobb-Douglas production function and multiple regression models were estimated to analyze farm milk productivity and gross margin of the dairy farms. Surveyed dairy farms owned on an average 3.07 milking cows comprising 0.37 indigenous and 2.70 crossbred cows. Average milk productivity was 7.80 liter per cow per day, in which indigenous cow milk productivity was 1.9 1iter per day and crossbred cow milk productivity was 6.48 liter per cow per day. The study found that average daily milk production of small, medium, and large dairy farms were 5.45, 32.50, and 59.83 liter, respectively. Average monthly revenue and cost of milk production were US$ 79 and US$ 21 per cow, resulting in the average net return of US$ 58 per cow per month. Both quantitative estimation and t test results indicated a positive and statistically significant relationship between farm size and milk productivity and gross margin. The study findings also indicate that crossbred cows are providing higher economic benefits to the dairy farmers compared to the indigenous breeds. Despite being smallholder and subsistence, dairy farming shows potential for increasing returns to scale, and hence, there is a scope for further growth of the sector.
Keywords: Bangladesh; Dairy farming; Farm size; Gross margin; Milk productivity; Production function.