An Economic Analysis of Sweet Curd Production within the Dairy Value Chain: A Study of the Terai Region of West Bengal, India

Abstract

Although interest in value-added dairy products is increasing, empirical evidence regarding their economic viability remains limited. Specifically, there is a lack of research on the economic viability and cost structure of traditional fermented dairy products, such as sweet curd (Mishti Doi), within regional value chains. This study aims to assess the economic viability of sweet curd production across four blocks in the Terai District of West Bengal, India, by analysing cost structures, profitability, market concentration, and seasonal production dynamics. Primary data were collected from 31 purposively selected dairy processing units over one year (April 2024 to March 2025) using structured interview schedules. Data were analyzed using benefit-cost ratio analysis, market concentration indices (CR4, HHI, Gini coefficient), and the seasonal index. The results indicate that variable costs constitute 98.6% of total production costs, with fluid milk accounting for 59–62% (Rs 44–51/kg). Regional production costs range from Rs 71.84/kg in Coochbehar-II to Rs 86.35/kg in Alipurduar-I, driven largely by milk procurement price differentials (Rs 36.61–42.91/L). Benefit-cost ratios range from 1.44 to 1.72, confirming economic viability across all blocks, with Coochbehar-II recording the highest profit margin at 71.9% (net profit: Rs 51.68/kg). Low Gini coefficients (0.07–0.15) indicate equitable distribution of market shares. Seasonal indices range from 86% during the monsoon (July–September) to 112.57% during the festive season (September–December). Labor costs account for 9.24% of total production expenses, combining family and hired Labor. Spoilage rates are effectively managed below 0.64%. The study concludes that sweet curd production is economically promising across the Terai region, with an average benefit-cost ratio of 1.61 and weighted average profit margins of 37.9%. Improving milk procurement strategies and adopting adaptive seasonal management are critical to enhancing long-term profitability and sustainability within the dairy value chain.