Study on production patterns and marketing of milk in district Bannu, NWFP [Pakistan]

Study was carried out in three representative areas for milk production and marketing of District Bannu i.e. Bannu, Domel, Mer Ali and Nawrange. Out of the total 108 farmers investigated which included farmers, middlemen and retailers, 32.41% had primary level 43.52 percent middle class 7.41% matriculation 2.78% intermediate and 0.93% had graduation level of education. 78.38% studied farmers were married. No katcha structure was recorded and 80.49% of the farms visited were based on semi-pacca structures, while remaining 19.51 had pacca structures. Capital costs on an average herd size of 16.75 animals/farm was Rs.271250 as shed cost and Rs. 846812.50/farm animal cost showing an annual capital cost of Rs. 1118063 per farm. The average shed cost was Rs. 271250, while average animal price was Rs. 50375. Total feeding cost per animal was Rs. 26691.04 per animal; while average other costs, i.e. veterinary services, marketing expenses and miscellaneous accumulated was Rs. 5158.21 per animal. Hence, the gross expenditures accumulated to Rs. 35073.13/animal/ annum. On average 46800 liters of milk per farm was produced that fetched the price of Rs. 936000 by the average farmer in District Bannu. The average gross income per animal remained Rs. 56250.00. Hence, the net returns the average per animal net returns accumulated to the value of Rs. 20807.50. In Bannu, Domel, Mer Ali and Nawrange, the input/output ratios were 1:1.77, 1:1.42, 1:1.46 and 1:1.71, while the cost benefit ratio was 1:0.77, 1:0.42, 1:0.46 and 1:0.71, respectively. Overall cost benefit ratio in the District was 1:0.59. On average, a wholesaler sold 17245.13 liters and retailer 29554.87 liters. The capital turnover showed that in Bannu the farmers will need 2.74 years, in Domel 4.12 years, in Mer Ali 3.75 years and in Nawrange 2.77 years to receive back his capital costs. The average price per liter milk fetched by the wholesaler was Rs. 18.27 and by the retailer Rs. 20.50. Total marketing costs paid by the wholesaler in Bannu, Domel, Mer Ali and Nawrange were Rs. 63163.20, 64038.00, 64740.00 and 44928.00, respectively. The marketing costs of retailers in Bannu, Domel, Mer Ali and Nawrange were Rs. 75849.60, 70002.00, 76740.00 and 61584.00, respectively. Price spread between milk producer and wholesaler was Rs. 324045 (43.69%), while between the wholesaler and the retailer was Rs. 417645 (56.31%). The total price spread from producer to retailer was Rs. 741690 in various tehsils of District Bannu. Similarly, marketing margins were higher (10.88%) for retailers and the wholesaler received 9.47%. In case of net margin of the marketing agents, retailer had the highest level of net margins (31.95%) over the costs he paid, while the retailer had 26.90% net margins over the marketing costs he paid during the process of sale of milk. However, the retailers received a comparatively higher markup percentage (12.21%) over the price he paid for purchasing of milk, while the wholesaler received 10.46 markups over the price he paid to the wholesaler for the purchase of milk. Retailer shared 60.49 paisa of the consumer's rupee, while the retailer shared only 39.51 paisa of the consumer's rupee in the business of milk marketing. The resultant cost benefit ratio for retailer was 1.46 rupees (1:1.46) on investment of one rupee in the milk marketing business, while the wholesaler earned 1.36 rupees (1:1.36) on one rupee investment in the milk marketing business in different areas of District Bannu, NWFP. It is concluded from the present study that the retailer enjoys more benefit in terms of marketing margin, net margin, markup percentage, breakdown consumer, rupee and cost benefit ratio than wholesaler. Capital turn over is high in Mer Ali followed by Bannu, Domel and Newrange.