Dairy Production and Its Implication in Household Income in the Tarai Region of Nepal: A Case Study of Chitwan District

Article excerpt


Nepal is a mountainous country with agriculture as its economic mainstay. The percentage of people dependent on agriculture has declined gradually from 81% in 1991 to 76% in 2002 (CBS, 2002). Only about 20% of the total land area can be cultivated in a mountainous country like Nepal. With the typical geographical condition and other natural reasons, the government of Nepal has to face many challenges in providing basic infrastructure facilities and services in most part of the country. Due to the lack of agricultural infrastructures such as roads, irrigation and so on, agriculture has remained almost stagnant. Its share in the gross domestic products has been constantly decreasing. Although the nature and the form of the problem of farming system in the Tarai (1) are different from those in the hills and the mountain, they are no less severe. The Tarai is highly influenced by migration from the mountains, the hills and neighbouring country India. The phenomenon of migration has been the most striking reason for the rapid population growth in the Tarai region. The National Census 1991 reports that the population in the Tarai is increasing at a rate of 4.2% per annum contrasting with that of 1.6% in the hills and a national average of 2.2%. Such a rapid increase in population density in the Tarai has considerably increased population pressure on the existing land and forest resources; consequently the surpluses of food grains have been rapidly declined. Thus, the production of rood grains alone has not been able to meet the ever-increasing food needs for the people. Hence, people have been practicing different economic activities to maintain their livelihood.

Livestock farming being a major component of Nepalese farming system is becoming one of the important occupations in the rural area of Nepal. It contributes 31% of agriculture gross domestic product (GDP), among this, 53% derived from the hills, 38% from the Tarai and 9% from the mountains (APP, 1995). Livestock farming, especially, dairy farming alone contributes 78% in total AGDP. It is presently undergoing a transition phase from subsistence to commercial dairy farming in the various places of the Tarai region due to the increase of milk marketing facilities in the area. Dairy farming has been helping the farmers to earn cash income to fulfill their basic needs, at the same time they can get manure as by-product and draft power for agricultural production. One of the other important aspects of dairy farming is to generate energy in household level for cooking and heating in terms of biogas, which is produced by decomposition of animal dung into an airtight digester. Biogas technology is one of the technologies that is renewable and is regarded as directly contributing in minimizing the over use of traditional energy sources (2) in the rural area where only 1% of the people have access to the commercial energy sources. In the other hand, numerous people are involved in the production, processing and trading of dairy and dairy products. This provides the employment opportunities for the rural people. Sales of dairy animals, milk and milk products make up a considerable proportion of the average farmer's income. Dairy is also a source of supply of animal protein (cows for milk, and buffalo for milk and meat) through the consumption of milk and milk products and meat, which can positively effect in improvement of the health of people. Hence, the analysis of contribution of dairy production and its implication to the household income in the rural setting is a research issue. Further, the analysis of occupational structure and their contribution in household income is also becoming important. Consequently, the main objective of this study is to analyze contribution of dairy production to household income and examine the occupational structure of the rural households. This will further examine socio-economic characteristics of dairy farmers, dairy production costs and net return to farm from dairy production and examining the share of different economic activities among the dairy farmers. …