The study analyzed the profitability of milk production in district
Peshawar. For this purpose 100 dairy farmers are selected from the two
purposively selected villages namely Kalu Khel and Kala in district Peshawar. The
sampled dairy farmers are divided into three categories on the basis of number of
milk animals i.e. rural subsistence (1-3 adult milk animals), semi commercial (4- 10 adult milk animals) and commercial dairy farmers (10< adult milk animals).
The study concluded that average fixed cost per animal per year is Rs.9485.76,
Rs.17382.51 and Rs.19070.57 respectively. Whereas, the average variable cost
was estimated as Rs.49741.07, Rs.70492.74 and Rs.76559.57 for all the three
categories including rural subsistence, semi commercial and commercial dairy
farmers respectively. The key finding of the study is that on average, a milk animal
produced milk per lactation worth Rs.58220.63, Rs.91823.60 and Rs.107004.01 in
the rural subsistence, semi commercial and commercial dairy farms. The results of
the benefit-cost ratio for commercial dairy farmer was noted as 1.15 which was
higher than those of semi commercial 1.09 and rural subsistence 1.04.The study
suggested that provision of the microfinance loans on relax conditions can
increase the milk productivity and profitability of the farmers.