Livestock contributes to food and nutritional security by providing milk, meat and eggs; it provides draught power<br />and manure for crop production raw materials for industries and acts as insurance during bad crop years. Uttar<br />Pradesh is the largest contributor to the national milk production contributing around 18 per cent of total milk<br />production in the country. Buffalo rearing also serve as an insurance cover for the poor households being sold<br />during times of distress. Keeping in view the importance of livestock in rural development this study was carried out<br />in five villages of Faizabad district of Eastern Uttar Pradesh. Hundred milk producing households were selected<br />randomly for the study. The highest feeding cost was worked out in marginal followed by small and medium herd<br />size groups. This study highlights that cost of feed and fodder per milch buffalo per lactation was higher on<br />marginal (Rs.17898) as compared to small (Rs.16632) and medium (Rs.15528 ) herd size groups. The net maintenance<br />cost of per milch buffalo per lactation was estimated by deducting the income from dung from the total maintenance<br />cost. The net cost of maintenance per milch buffalo per lactation was Rs. 29256, 27561 and 25389 on marginal,<br />small and medium herd size groups, respectively. The benefit cost ratio per milch buffalo per lactation was 2.24,<br />1.93 and 1.71 on medium, small and marginal herd size groups, respectively. The break-even output was worked out<br />to be 18.19, 14.28 and 10.87 per cent of the total milk yield on marginal, small and medium herd size groups,<br />respectively. The livestock sector is positioned to be a major growth area because the total annual employment<br />generation per household was observed 328 man days.

Keyword: Economics of buffalo milk production; Break- even analysis; Livestock sector; Employment generation