Technical efficiency analysis of milk production in khyber pakhtunkhwa province: A stochastic frontier approach

This study was carried out in three districts i.e peshawar,di khan and mansehra of khyber pakhtunkhwa during the year,2010 with the basic objective to determine the technical efficiency of milk production. the data from 300 livestock farmers (100 from each district) was collected by using multi-stage sampling technique. herd size,dry fodder,green fodder,concentrate/oil seed cake,hired labor,permanent labor,medicine and vaccination cost and fees were the major determinants that affected milk production. the estimated value of γ is 0.70,implied that if the livestock farmers were operated at full efficiency level they could reduce their input use by 30 percent without any reduction in the level of output and with the existing technology. the results of the study showed that rising age of livestock farmers was cause of decline in the efficiency and is recommended that the government policy should focus on ways to attract and encourage young people who are agile and aggressive in dairy business. results also revealed that farmers having more experience were more efficient than those having comparatively less or no experience. finally more focus should be given on education as high level of education of farmers has positive effect on their technical efficiency.