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Exploring the Economics and Practices of Dairy Farming


Dairy farming is a crucial livelihood for many in rural India, providing a steady source of income through the sale of milk and dairy products. This blog will delve into the financial and practical aspects of dairy farming, offering insights into the costs involved, income generated, and the day-to-day management of a dairy farm.

The Scale of Dairy Farming in India

India is the largest producer of milk in the world, contributing to over 22% of global milk production. With more than 70 million dairy farms, the industry employs millions and serves as a critical source of income for rural households. As the demand for dairy products continues to rise, the future scope for dairy farming in India looks promising. The industry is expected to grow at 15% over the next five years, driven by increasing consumption and government initiatives supporting dairy development (source: NDDB).


Investment Breakdown for dairy farming

Starting a dairy farm involves several key investments. Here is a breakdown of the typical costs:

  • Building a Cow Shed: A well-constructed cow shed is essential for the health and productivity of the cows. The cost of building a shed can range from ₹50,000 to ₹1.5 lakh, depending on the number of cows it needs to accommodate.

  • Purchasing a Cow: The cost of buying a cow, particularly a high-yielding breed like Holstein Friesian (HF), is around ₹1.5 lakh.

  • Medicines: Regular medical care and vaccinations are necessary to maintain the health of the herd, costing approximately ₹10,000.

  • Feeds: Proper nutrition is crucial, with feed costs amounting to about ₹40,000.

Earnings from Dairy Farming

The income from dairy farming varies but generally ranges between ₹10,000 to ₹15,000 monthly. This income is derived primarily from the sale of milk.

Milk is typically sold at the dairy for  ₹30 - ₹32 per litre. The price can be influenced by several factors, including:

  • Breed of Cow: HF cows are chosen for their high milk yield, producing about 12 to 15 litres per day.

  • Market Demand: Local demand for milk and dairy products can affect prices.

  • Quality of Milk: Higher quality milk, with better fat content, can fetch a higher price.

Additional Livelihood from Dairy farming

Many dairy farmers also engage in farming, which provides an additional source of income and ensures a more stable financial situation. Dairy farmers not only sell milk but also produce ghee, curd, and other dairy products. Ghee is often used for home consumption and also sold in retail markets, providing another revenue stream.


Managing the Health of the Herd

Maintaining the health of the cows is paramount. This includes:

  • Hygiene: Ensuring clean water and feed supplies.

  • Vaccination: Adhering to a precise vaccination schedule.

  • Disease Monitoring: Regularly observing animals for signs of illness and administering prompt treatment.

  • Common Treatments: Practices such as de-worming and providing stall-feeding instead of grazing help in preventing diseases.

Utilisation of Cow Manure

Cow manure is a valuable by-product used on the farm to enhance soil fertility. However, it is generally not sold. Instead used as biogas or in farming.

Post-Lactation Management

Cows that are no longer lactating are not sold. Instead, they are cared for until they are ready to produce milk again.

Why Cattle Over Goats or Poultry?

Cattle are often chosen over goats or poultry due to the steady and significant income from milk sales. Additionally, the by-products such as manure are beneficial for farming.

Disease Management in Dairy farming

Good hygiene practices, timely vaccinations, and regular health monitoring are critical in managing diseases in cows. Specific treatments like de-worming and stall-feeding help maintain the health of the herd.


Dairy farming is a viable and rewarding livelihood, especially when managed efficiently. The initial investments, though substantial, are outweighed by the consistent income from milk and dairy products. With proper care and management, dairy farming can provide a stable and sustainable income for rural families. 


You can Invest in Dairy farming and enable hundreds of days of livelihood  for dairy farmers within minutes by investing in them at rangde.in. Create impact and get repaid with interest! 


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