Economic analysis of different dairy production systems in Ghana and Senegal: an application of typical farm approach

Ghana has been experiencing a significant increase in the demand for dairy products due to rising incomes, population growth, urbanization, and changes in dietary choices. However, due to the low domestic milk production capacity, Ghana relies heavily on imports to meet local demand. This study aimed to identify and characterize prevailing dairy production systems in Ghana; and measure and compare their costs and returns using the TIPI-CAL model (Technology Impact, Policy Impact Calculation model). Three typical farms were selected from each production system: confined-cut and carry (GH-03), agro-pastoral (GH-35), and pastoral production systems (GH-27). The cost of milk production for GH-03, GH-35, and GH-27 was €58.48/100kg Energy Corrected Milk (ECM), €49.05/100kg ECM, and €39.51/100kg ECM, respectively. All three farms had a positive entrepreneur's profit and covered their full economic cost from dairying in the short, medium, and long terms. However, the GH-27 was economically unviable in the long term for finished cattle because of the high opportunity cost of labor. Nonetheless, the market had a low absorption capacity for surplus milk mainly due to the lack of infrastructure and cooling facilities. Other issues such as low milk yield, shortage of forage, lack of artificial insemination, and the lack of organized marketing facilities were the major constraints faced by dairy farmers in Ghana.