Policy and scale factors influencing efficiency in dairy and poultry production in Bangladesh

Abstract

Demand for animal products has been increasing rapidly in Bangladesh due to income and population growth and urbanisation. The expanding market has the potential to create income and employment opportunities for small-scale and poor livestock producers if they can produce and sell market-demanded products at competitive costs and prices. This opportunity may be lost if investment, fiscal and capital market policies are distorted in a way that favour large-scale producers. Therefore, the overall objective of this study was to assess the efficiency of dairy and poultry producers in Bangladesh to identify policy options for assisting small-scale operators to develop economically viable and ecologically sustainable production enterprises for participating in the rapidly-expanding urban and rural markets for milk, poultry and eggs. The theoretical framework was based on the premise that small-scale producers may be able to compete with large-scale producers in the expanding market if they fulfil two conditions: if smallholders earn higher profit/unit of output as they need to earn a reasonable income to stay in business with low volume of output, and if smallholders are more profit-efficient in the use of their limited resources, i.e. use fewer resources/unit of profit generated.