Innovation Adoption and Its Effect on the Profitability of Dairy Farms in Sahiwal District, Punjab, Pakistan

Abstract

Innovation is the development of a new idea or a new production method to improve the performance of ongoing operations. The purpose of this study was to determine the adoption of innovation and its impact on the profitability of dairy farms in district Sahiwal, Punjab, Pakistan, using a structured questionnaire distributed to 160 dairy farmers using a random sampling technique. The obtained data were analyzed in order to compute the dairy farm income, total revenue, profit margins, and net present value and benefit cost ratios. Multiple regression analysis used to determine the effect of innovation adoption on the profitability of dairy farmers. The mean value of quarterly profit across dairy farms was 30772.71 TL with NPV and BCR values of 222.44 and 1.68 respectively. The profitability of the dairy farmers negatively affected by the age of the farmer, and a positive association found between the farming experience, total number of milking animals and innovation adoption index. Land, machinery, and credit costs must be minimized by the government to improve the adoption practices among dairy farmers.