Sustainable milk production through dairy farming is crucial in developing countries as it significantly contributes to food security and nutrition. It also provides livelihoods for the farmers and community-based organizations such as cooperatives and agencies since milk is seen as a lucrative source of income

The Philippines, which is considered a third-world county, only has a milk production of 20.39 million liters in Liquid Milk Equivalent (LME) according to the Philippine Statistics Authority's (PSA) Dairy Industry Performance Report in 2016. It only supplies 1.12% of the total milk demand in the country. Hence, 98.88% is imported through powdered and ultra-high temperature (UHT) milk products. The report signifies Philippines' low productivity growth in milk production, which implies that it is an import-dependent country.

To address this concern, the government exerted efforts to help dairy farms improve their operations. The National Dairy Industry (NDA) under the Department of Agriculture (DA) is mandated to create policies and programs that will sustain the development of the Philippine dairy industry. It intends to promote dairy farming in acquiring safe and quality milk and milk products.

Before setting up the NDA, the Philippine Carabao Center (PCC), an institution under the DA, was first established with the same objective of fostering milk production in the country, particularly by nurturing buffaloes. Aside from the milk operations, the PCC is also responsible for improving buffalo meat and draft power, as well as serving as the headquarters for helping rural dairy farmers.

The mandate of both agencies is to ensure the productivity of farms through technology utilization for improved dairy production. Factors that significantly impact the quantity and quality of milk produced by buffaloes are thus a researchable area. PSA (2016) recorded that buffaloes only contributed 34.93% of the country's total milk production. It led the researchers to identify the best situations for increasing the productivity growth of dairy buffalo milk production.

The researchers analyzed three measurements, including technical efficiency, scale efficiency, and technological change. Technical efficiency refers to the capability of the inputs being used to produce the most desirable outputs. Scale efficiency, also known as returns to scale, refers to the change in outputs after the amounts of all inputs in production have been changed by the same factor. Moreover, technological change identifies the effectiveness of the variable’s support system, such as the PCC’s research and development program.

Said assessments were applied to the 44 randomly selected dairy buffalo milk production in Nueva Ecija, Philippines. It aimed to determine the potential of these farms to increase their productivity growth, specifically by measuring the factors that significantly affect their entire performance. Farms were systematically evaluated with a gap of three years in data collection and examination from 2017 and 2020. The ample time helped the researchers have factual and feasible data in determining the change in the efficiency of inputs in attaining outputs.

The researchers also applied the parametric stochastic frontier analysis to a Cobb-Douglas production function with an inefficiency effects model further assuming that the inefficiency error-term follows an exponential distribution.

Using the stochastic frontier, results identified that a small portion of distinct resources and services for the years 2017 and 2020 were utilized by the farmers, significantly affecting their operations. In 2017, three factors significantly impacted on their production: buffalo cows, forage area, and dairy feeds. In comparison to 2020, only two factors significantly affected their production: buffalo cows and dairy feeds. Also, the number of buffalo cows has increased by 10%, which reflects a good outcome to the increased of 6.9% in milk production.

For technical efficiency analysis, it was found that cleaning frequency had better effect in improving the actions and decisions of the farmers for fulfilling their daily farm duties. Wherein technical efficiency scores were 0.65 for 2017 and 0.64 for 2020, showing no technical change between the two periods. It also indicates that farms are constantly productive in maintaining their farms’ cleanliness as they want to ensure the safety and health of their buffaloes.

For the scale efficiency analysis, the study revealed a significant change in the outputs produced in the two periods as the ways and strategies of using the inputs differed. Wherein the production shifted from decreasing returns to scale in 2017 with a scale elasticity of 0.8117 to increasing returns to scale in 2020 with a scale elasticity of 1.0268. It illustrates a -0.52% difference between 2017 and 2020 as the farmers became wiser in maximizing their inputs to produce the best outputs.

The study confirmed technological progress for the periods of 2017 and 2020. It shows that 48.60% improved the farmers' operations due to actively engaging in the programs and projects implemented by the PCC. Every year, there is a 12.15% growth in the technological aspects of the farms, which implies that PCC has a positive contribution to the dairy buffalo farms, such as providing support for dairy farm production, market, extension, education, and training.

In attaining the results of technical efficiency, scale efficiency, and technological change, it was revealed that dairy buffalo milk production in Nueva Ecija grew by 48.08% between 2017 and 2020, or 12.02% annually performance growth. The factor that had the most significant contribution to this development is technological progress. While technical efficiency had the most negligible contribution.

As concluded by the study, to become more productive and competitive in increasing dairy buffalo milk production, farmers can improve their technical efficiency by being observant of their waste management practices. Also, it is recommended that farmers must participate in training and extension services in learning to adjust some resources from technology development to technology adoption. The sustainable development of the farms' production can be achieved by strategically applying resources and services, such as forage areas and dairy feeds. In this way, the management of buffalo cows could be better, resulting in better milk production.