The Australian Centre of International Agricultural Research (ACIAR) has sponsored several research projects with the aim of increasing the efficiency of straw utilisation by cattle and buffaloes in some Australian and Indian situations. These projects involved research on upgrading technology and field testing specific feed formulations to determine their impact on improving livestock production in India. This report contains an economic assessment of three interrelated projects supported by ACIAR over a period of nine years, starting 1983–84. Apart from validating the feasibility of improving the efficiency of strawbased diets through strategic supplements, the projects under review had played a significant role in the commercial introduction of urea molasses blocks (UMBs) in 1985 and bypass protein feed (BPF) in 1989. It was anticipated that the supply of these products, through the milk producers cooperatives organised under the Operation Flood Programme in India, would make a substantial contribution to Indian dairy farmers towards increasing the efficiency of milk production. Based on the adoption level of these products over a period of about eight years, an assessment was made on the likely contributions of the products over a period extending up to 2013. The results of the analysis indicate that these projects are economically viable even under the most conservative set of assumptions regarding the project outcome. The internal rate return of the project was above 12 per cent and the benefit–cost ratio was 2.15 for the base level estimates, with a net present value of $4.7 million. Sensitivity analysis has also clearly demonstrated that the cost incurred on these projects is justified by the potential economic benefits to the Indian dairy farmers.


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