The main purpose of this study was to gain insight into the household
and farm economics of small-scale dairy farmers in Cajamarca, Peru and
to obtain estimates of their costs per unit of output in milk production
so as to gauge their potential for improvement and their vulnerability
to international competition in the wake of regional trade negotiations.
The study applies a method of economic analysis developed by the
International Farm Comparison Network (IFCN) which is based on the
concept of 'typical farms'. The following three farm types were found
to represent over 75, 90, and 95 percent of the regions' milk
production, cow numbers and farm numbers respectively. The first type of
farms (5 cows) represents the typical dairy farm in the Jalca-Ladera
area (>2,800 metres above sea level); the second category (6 cows)
was chosen to represent the majority of dairy farms in the high
intra-mountainous valleys (2,600 to 2,800 masl), and finally, a third
farm type (13 cows) represents the typical production system found in
the Cajamarca valley (2,500 to 2,600 masl). Each farm was analyzed in
detail and assets, production costs, profits and other economic
information are presented graphically and are described in the text. In
addition, the study contains a description and analysis of the margins
in the dairy and feedstuffs chains operating in Cajamarca.
A number of conclusions emerge from the study. Increasing milk
production in Cajamarca should be profitable for the farm types studied
in the sierra, and appears to be a good strategy for the country as a
whole since international milk powder prices are expected to increase.
In general, the productivity of livestock in the sierra is low, offering
ample scope for improvement. Improving nutrition through better forage
production will be key to raising dairy productivity. The use of
cultivated pastures, often promoted by dairy development programs, has
only been successful in areas where irrigation is possible and where no
direct competition with cash crops exists and more attention should
therefore be paid to improving native rangelands. As significant parts
of both the consumer prices for dairy products and the farmer prices for
feedstuffs go towards covering processing, transportation, and retailing
costs, dairy development in the region will demand more efficient chains
that connect the high sierra farmers with the coastal markets for both
farm inputs and outputs.
A five page executive summary is also available in addition to this
PPLPI, FAO, Rome, Italy, vii+35 pp.