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Dairy husbandry is a new production sector for farmers in Vietnam. It has only been popularized in different eco-geological regions in the country for about ten years. Although a number of studies on dairy cattle have been done since the 1970s and 1980s, studies which relate dairy production to livelihood diversification are few, especially at the small scale level. Starting from the hypothesis that attributes the improvement of income and living conditions for small scale farmers to dairy production and the question whether livelihood diversification into dairy production leads small scale farmers to prosperity, this study uses a variety of methods such as literature study, semi-structure interview and focus group discussion to identify the conditions under which small scale farmers can get profits and benefits for improving their living standards. Simultaneously, the study identifies major opportunities as well as main constraints for dairy production development in Vietnam. The study was carried out in Bavi District belonging to Hatay province next to Hanoi Capital in the west. The data and information collected from the field work have been processed by using Excel and SPSS softwares to provide the case study with supporting evidences in details. The study summarized a number of policies promultigated by the national government which support and encourage the development of dairy production. The study realized a decrease of dairy cattle population in Bavi during the two years 2005 and 2006 while the national total dairy herd still grows continuously in the same time. The study found that the majority of the selected small scale farmers got benefits from dairy production and most of them considered the income generated from dairy activities as primary income source for their families. The study also realized that several stop-dairy farmers want to reaccept keeping dairy cattle for their livelihood. The number of stop-dairy farmers who have had plan to restart raising dairy cattle accounted for 42.5 % of the total number of the stop-dairy farmers who were interviewed in the field work. The major opportunities for farmers to develop dairy production comprise supporting policies from the government, the establishment of milk collection system, the acceptable price for raw milk which covers all farmer’s input production cost, and dairy activities being operated as a farming system. The main constraints that were pointed out by the study relate to insufficient supply of animal feed, and the limitation of land use rights. The study helps to conclude that dairy production can be developed by small scale farmers and that the sector is able to improve farmers’ living condition although it is unclear to affirm that dairy production can lead farmers to prosperity





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