Application of the Farm Simulation Model approach on economic loss estimation due to Coronavirus (COVID-19) in Bangladesh dairy farms—strategies, options, and way forward

Abstract

The objective of this paper is to quantify the economic loss of the dairy farms due to the pandemic novel Coronavirus (COVID-19) infection by analyzing the real-time data of two typical farms (BD-2 and BD-14 cow) in Bangladesh and propose a strategic plan of action to make policy decisions in order to support the dairy industry. The International Farm Comparison Network (IFCN) Farm Simulation Approach and Technology Impact Policy Impact Calculations (TIPICAL) model was used considering with Corona (WC) and without Corona (WOC). The Integrated Dairy Research Network (IDRN) database (January 2019 to July 2020) was used for simulation of IFCN two typical farms. The milk price is decreased by 17% and feed price is increased by 3.7% due to COVID-19 in March which was used as the base for farm simulation. This resulted in a decrease in milk yield by 7.9% and 8.9% for small household and family farms, respectively. The cost of milk production increased by 19.10% and 10.9% for household and family farms, respectively. This has an overall negative impact on farm income which accounted for national economic loss from dairy farms in Bangladesh to 4.43 million USD/day (36.84 crore BDT). This loss has been fluctuated from April onward and was higher in June (3.83 million USD/day) due to a combination of COVID-19, flood, and seasonality effect on lowering milk production. At the same time, the farmers’ response to the resilience capacity (liquidity, operating profit margin, and financial performance) to combat COVID-19-induced situation has been declined substantially. Based on this, we conclude that the government might take a strategy to support farmers by providing financial support for increasing the operating capital and decreasing the cost of milk production. The outcome of this study is expected to be beneficial for policymakers, farmers, and processors in Bangladesh and similar other countries elsewhere.