Profitable dairying for smallholder farmers

Dairy farming as an occupation means that it must be profitable for the farmer. A smallholder farmer is typically an agricultural farmer who owns one to three cattle and relies on dairying as a subsistence occupation. To establish dairy as a profession requires investment and funding, and the funders must be assured of repayment, which can only be promised if the dairying business becomes profitable and is sustainable. What a smallholder farmer lacks are infrastructure and resources which eventually can be built once the dairy business flourishes and becomes viable. The question that arises is what does it take to make a dairy farm profitable without investing a large sum of money and resources? A set of basic entrepreneurial skills and a list of key tasks is all one requires to structure a traditional dairy farm setup and then the farm’s success can be quantified through measuring KPIs (key performance indicators).

Here, I list down a set of tenets to be followed for establishing a successful farming enterprise:

1. Adopting dairy farming best practices

Following dairy farming best practices pertaining to animal health, preventive healthcare, reproductive management etc. could be very effective in improving farm profit margins. With the knowledge of best practices, the farmer can develop a thorough animal health program to plan routine and emergency protocols for the herd. The core effort of a farmer should be focussed towards converting feed into milk. Hence, the basic requirement here is to feed animals with nutritionally correct feed and in the right quantity. Similarly, providing the right housing is essential for effective milk production, protection of the herd and maintaining hygiene across the farm.

2. Making the best use of service providers

A farmer must be able to manage the resources and meet the challenges of costs and climatic conditions. This cannot be done single-handedly and that’s when service providers and enablers such as dairy cooperatives and government initiatives’ implementing agencies come into the picture. Useful information can be sought from these service providers, much of which is free of cost. Best practices for breeding management and artificial insemination process can be learnt from experienced government veterinarians and extension support services. Advisory services can be obtained from various service providers and crucial knowledge can be exchanged through these channels such as obtaining high-quality semen, information on dairy development programs of the Government etc. Similarly, milk testing at collection centres for checking milk composition and quality can be carried out at regular periods of time and advise can be sought for production of the best quality milk.

3. Quantifying success through KPIs

A set of key task areas could be identified for rating a farm and within each task area, progress can be quantified through developing a list of key performance indicators (KPIs). For example, measuring individual cattle performance against the overall herd and comparing the statistics could help in assessing per animal productivity and identifying improvement areas while focussing on each cattle as an asset. KPIs such as number of days in open state, number of milking cattle in the farm, number of young stock, number of days in milk etc. can be very useful indicators of a farm’s overall performance.

4. Incorporating new technologies in the farming enterprise

Farm data management is a very important tool which would come handy in achieving success in dairy farming. Maintaining farm records such as cattle profiles, milk yield records, artificial insemination, vaccination and heat records can be very intuitive and insightful for a future course of action and taking better decisions. This data can be easily recorded through various offline and online tools and activities such as maintaining a farm register, breeding calendar, cattle lifecycle information can be incorporated in the routine. Through appropriate records and relevant information, the farmer can work with an advisor to produce annual farm plans and project earnings as well as take measures to increase farm income. Also, keeping a record of financial transactions of farm input and output will provide a clear picture of farm profitability.

Adhering to the basic principles of dairy farming and making complete use of available resources and the enabling environment can greatly influence a farm’s productivity and make dairying a viable business option through which even smallholder farmers can get good financial returns on their dairy enterprises.

Authored By
Ruchi Chandalia
Program Manager, Stellapps Technologies Pvt. Ltd.