Economics of technology investment for enhancing milk production efficiency and reducing greenhouse gas emissions of smallholder dairy farmers

Abstract

This study aimed to evaluate the economics of technology investment for enhancing production efficiency and reducing greenhouse gas emissions in dairy farms. The data was collected from 70 young dairy farmers and farm representatives, with good data records, over 21 Provinces under the supervision of the Livestock Promotion and Development Division, Department of Livestock Development. The data included demographic information, the number of cows in a herd, milk yield, production costs, farm assets and technologies. The results showed that 30 percent of farmers adopted 1 technology, followed by no technology, three, two, four, five, and six technologies (18.57, 15.71, 8.57, 2.86, and 2.86 percent, respectively). The number of technologies adopted significantly affected milk yield and production costs (P < 0.05). The linear relationship between milk yield and the number of technologies adopted was interacted by important factors including farm size and educational level. The number of technologies adopted had a statistically significant effect on greenhouse gas emissions (P < 0.05 and P < 0.01). The results of the economic analysis on technology investment in milk yield and greenhouse gas emissions showed that using collars for animal behavior detection together with biogas and solar cells could increase milk production by 54.88 percent. There was an increase in income of 98.44 percent from the increase in the milk yield per cow in which the payback period was 24.61 months. The adoption of biogas resulted in the greatest reduction in greenhouse gas emissions which was 0.13 percent. The payback period of biogas investment was 6.82 months when calculating the income from the 15.76 percent increase in milk yield per cow. Additionally, biogas was recommended for smallholder dairy farmers because it provided the best return in terms of increasing production efficiency and reducing greenhouse gas emissions.