Structural Analysis of Factors Affecting Dairy Cattle Industry Development in Malaysia

Malaysian dairy cattle industry has not produced enough quantity of dairy products to satisfy domestic market needs. Various initiatives were made by the government to improve the industry output for more than five decades; however, the results are yet to be materialized. Indeed, Malaysia is still one of the highest milk and dairy products importing countries in the world in terms of overall volume and per capita. The objective of this study is to investigate the most important factors influencing the dairy cattle industry development in Malaysia. A quantitative approach involving Structural Equation Modeling is applied to achieve the aim of this study. After testing the validity and reliability (based on Cronbach’s alpha technique) of the original research instrument, the Structural Equation Modeling (SEM) is implemented to analyze the data by using Smart-PLS 3 software. The findings demonstrate that the factors such as adequate land allocation for dairy farming and animal feed plantation, climate condition, logistic costs, animal feed price and accessibility, poor cow breed, lack of well trained and experienced labors, lack of knowledge on dairy farming, government policies, and the inappropriate environment of the industry are among the most important factors affecting Malaysian dairy cattle industry growth. Industry stakeholders such as farmers, policymakers and researchers may benefit from this study. Results of this study can be used as the guidance and roadmap in their future development policies, plans, projects, and studies.