Cost Benefit Analysis of Dairy Farming in South West Nigeria

Abstract

Abstract The dairy sector performs a fundamental role in daily income, self-sufficiency, and food security among dairy farming households. Therefore, this study conducted a cost-benefit analysis of dairy production in South West Nigeria. Data were collected using a structured questionnaire from 150 dairy farmers selected through a multistage sampling method. Descriptive statistics and budgetary techniques were the analytical tools employed. The majority (60.67%) of the farmers were within active and productive age. Most (58.67%) were male, and the majority (92.91%) were married. Most (45.45%) had primary education. The total revenue (TR) realized from dairy farming was ₦493,752.00 per annum. On the other hand, the total fixed cost (TFC) incurred was ₦ 44,799.00. The total variable cost (TVC), the total cost (TC), The gross margin (GM) and the net farm income (NFI) are; ₦229,142.00, ₦ 273,941.00, ₦264,610.43 and ₦219,811.43 respectively. Furthermore, the rate of return on investment (RORI) was ₦0.80, which implies that on every one naira invested, a return of ₦1.80 was realized with a profit of N0.80. Dairy farming is profitable, given the positive values of the indices. However, genetically improved breeds, proper orientation and support services for dairy farms are strongly advocated for better performance and yield.