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Measuring Cost Efficiency in Smallholder Dairy Farms: Empirical Evidence from Northeast Thailand

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  • Lapar, Ma. Lucila A.
  • Garcia, Alexis Arthur B.
  • Aditto, Satit
  • Suriya, Patcharee

Abstract

This paper investigates smallholder dairy competitiveness from estimates of a translog cost frontier using data from 130 smallholder dairy farms in six provinces of Northeast Thailand. Cost efficiency estimates indicate that there is significant scope for improving cost efficiency in smallholder dairy farms in Northeast Thailand, and costs can be reduced by 26 percent on average. The empirical results also strongly suggest that smaller farms are more cost efficient than larger ones within this sample of smallholder dairy farms. Proper herd management for maintaining an optimal milking cows-herd size ratio coupled with yield-enhancing technologies can enhance cost efficiency. Feed technology options that can potentially reduce costs while maintaining yield levels may also have potential for doing so but the empirical evidence on this is weak, suggesting a gap between technology dissemination and successful adoption. Further validation may be needed towards adjustment in the technology to suit the varying circumstances and resources of smallholder dairy systems. Innovations for strengthening extension modalities and their delivery systems may also need to be explored to enhance the long-term viability of smallholder dairy systems.

Suggested Citation

  • Lapar, Ma. Lucila A. & Garcia, Alexis Arthur B. & Aditto, Satit & Suriya, Patcharee, 2005. "Measuring Cost Efficiency in Smallholder Dairy Farms: Empirical Evidence from Northeast Thailand," 2005 Annual meeting, July 24-27, Providence, RI 19514, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea05:19514
    DOI: 10.22004/ag.econ.19514
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    References listed on IDEAS

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    Cited by:

    1. Bahta, Sirak & Malope, Patrick, 2014. "Measurement of competitiveness in smallholder livestock systems and emerging policy advocacy: An application to Botswana," Food Policy, Elsevier, vol. 49(P2), pages 408-417.
    2. Bahta, Sirak & Baker, Derek & Malope, Patrick & Katijuongua, Hikuepi, 2015. "A metafronteir analysis of determinants of technical efficiency in beef farm types: an application to Botswana," 2015 Conference, August 9-14, 2015, Milan, Italy 211194, International Association of Agricultural Economists.
    3. Bahta, Sirak & Baker, Derek, 2015. "Determinants of Profit Efficiency Among Smallholder Beef Producers in Botswana," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 18(3), pages 1-24, September.

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