November 28, 2025

Economics of Production and Marketing of Milk in Rajasthan

Key Points

Channel I achieved the highest marketing efficiency at 11.48%, maximizing farmer returns.
Production costs averaged ₹264.69 per Standard Animal Unit, with returns of ₹389.61 for milk.
The study assessed the economic viability of different marketing channels among 80 dairy farmers.
Economics of milk production demonstrates significant variations in costs and returns across channels.

Abstract

The study aimed to analyse the costs and returns associated with milk production and marketing in the Jaipur district of Rajasthan. A sample of 80 dairy farmers, representing different herd-size categories, was selected from four villages in the district. The data collected were analysed using the Capital Recovery Cost (CRC) method and marketing efficiency measures. Farmers were found to be using one of three marketing channels: Channel I (Producer–Consumer), adopted by 28.75 per cent of farmers; Channel II (Producer?Milk Vendor?Consumer), chosen by 23.75 per cent; and Channel III (Producer?Collection Centre?Cooperative Milk Plant?Consumer), followed by 47.50 per cent. The average daily milk yield from Standard Animal Units (SAUs) was estimated at 8.00 l per SAU per household (HH). The cost and returns of milk production per SAU were ?264.69 and ?389.61, respectively, resulting in overall proceeds of ?1.47 per rupee invested. Marketing costs were highest in Channel-III (?8.89 per l), followed by Channel-II (?5.95 per l) and Channel-I (?4.01 per l). The marketing margins were ?3.18 per l in Channel-II and ?4.97 per l in Channel-III. Among the three channels, marketing efficiency was highest in Channel-I (11.48 per cent), followed by Channel-II (5.30 per cent) and Channel-III (3.77 per cent).

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