Economic analysis of small-scale dairy farming and its contribution to rural livelihood security

Abstract:

In the arid farming communities of Saudi Arabia's Qassim region, where crop options are limited by water scarcity, dairy farming has emerged as the backbone of rural livelihoods for many smallholder families. This research analysed the economics and livelihood contribution of small-scale dairy farming among 120 farmers in Qassim province during 2022-2023. Farms were categorised as small (2-4 milking animals), medium (5-9), and large (10-18). Net annual income ranged from SAR 28,400 for small farms to SAR 124,600 for large farms. Feed cost was the dominant expense (34.6-42.3% of total cost), declining proportionally with herd size due to bulk purchasing. The benefit-cost ratio ranged from 1.34 (small) to 1.72 (large). Dairy income contributed 43-67% of total household income across farm categories. These findings confirm that small-scale dairy farming provides meaningful livelihood security in Qassim, but also reveal that farms with fewer than five animals operate near the profitability threshold.