Some background India became the largest milk producer in 2001 followed closely bythe US-Production increased from 17 million tons in 1950-51 to116.2 million tons in 2010-11 and per capita availability increasedfrom 124 grams per day to 263 grams. Milk products’ share in MPCE up from 11.5% in 1983 to 14.9% in2007-08 in rural areas and 15.7% to 18.4% in urban areas. Yet, by western standards, dairy is largely a small farmer activity-small, marginal farmers, landless laborers. With an overwhelming share of small farmers system of dairycooperatives largely credited with India’s white revolution Until 1991, the dairy was subject to licensing so very few privateintegrators were there. It was progressively de-canalized’ after 1991and private sector including MNCs were allowed.
Background: continued Still earlier estimates by Rajendran and Mohanty (2004) showonly 20% milk distributed through organized/coordinatedchannels. In the last decade or so the share of organized retail hasincreased but only marginally. Kumar et al (2010) estimate one-third of the milk produced isretained on the farm and the remaining two-third enters themarket. Across regions the share of marketed milk was estimated tobe 49% in Bihar, 67% in Punjab and 75% in Western UttarPradesh. Out of the total marketed milk, 75% is handled by theinformal or traditional milk marketing chains and theremaining 25% (up from 20 percent estimated in Rajendranand Mohanty 2004) by formal channels.
Motivation for the study Apart from low productivity, undesirable outcomes of the dualistic dairysector is lack of delivery of adequate food safety and nutrition. Largely a missing market for these attributes in the dairy sector Given institutional weakness and lack of enforcement capital – need demandpull forces to improve outcomes for food safety and nutrition. One of the main sources of adulteration is mixing of water- results insignificant attrition of nutritional traits. The use of contaminated water in milkcould thus be a significant threat to both nutrition as well as safety. In caseof milk the two clearly intersect. Health burden of poor water quality is high in India-important public healthconcern especially when milk consumption is rising and rising prices raiseincentives to adulterate. Most parasital infection in India associated with water. Consumption practicessuch as boiling could mitigate concerns about food safety (by addressingmicrobial contamination) to some extent but mixing of water lessens thenutritional quality of milk, a very important source of micro-nutrientsespecially for the poor.
Motivation for the study: Continued The contamination goes much beyond water. The first mass survey of quality of milk supplied to consumersacross India by FSSI- 69% of the samples failed the test ofpurity. At least 14%- traces of detergents. Not a single sample collected in 7 states of Bihar,Chhattisgarh, Daman and Diu, Jharkhand, Orissa, WestBengal and Mizoram conformed to quality standards of milk. Presence of sodium chloride was detected in a milk sampletaken in Assam. Pessimists on India and optimists
Objectives of the study 2 main objectives of this -constitute the elements of a demand pull system: Assess the awareness and valuation of food safety and nutritionattributes among dairy consumers consumer awareness about food safety and nutrition in generaland for dairy products in particular. Use the recent episode of findings of adulteration and lack ofsafety in milk as an information shock to assess the ex post “foodsafety and nutrition consciousness” (FSCN). Identify information gaps Assess notional and practical contexts of food safety and nutrition Households’ KAPP regarding dairy consumption (example -whatcontainers they use, do they boil milk). Elements of behavioral response would include switching acrossproducts, moving across outlets, changes across brands oralteration in practices related to consumption of milk.
Objectives of the study: continued Identifying the sources of information gaps, the study will conductexperiments with information treatments to assess their impacts interms of consumer choices (in terms of both products as well aspractices). Different information sources as well as different types (forexample positive versus negative Experiment with choice of third party certificationbased on credibility, adulteration clearance certification(when it becomes operational) to assess their impactson demand by the consumers-
Snapshot of perceptions regarding different milk suppliers(about private sector) – Love and hateprovidesafest milkmilk theyprovideretainsnutritionvaluecost ofgetting itwrong onsafety ornutrition iscomparatively high forthemmight be safebut the pricethey chargeis not worthyof itprovideonly as safeandnutritiousmilk ascooperativesectorUnder foodsafetyconcernsthey are thebestpossibleoption/ donot trusttheir claimsD -22% 16% 6% 4% 21% 26%/8%SD-17% 16% 8% 7% 18% 17%/15%SA -36% 40% 24% 27% 41% 36%/32%A-24% 26% 37% 54% 18% 18%/35%AC -2% 3% 25% 9% 3% 4%/10%
Share of different milk sellersWhat is the brand of milk you purchase?Brand Name | Freq. Percent Cum.Chitale | 322 32.69 32.69Warana | 9 0.91 33.60Katraj | 141 14.31 47.92Nestle | 2 0.20 48.12Amul | 35 3.55 51.68Gokul | 55 5.58 57.26Govardhan | 12 1.22 58.48Thote | 4 0.41 58.88Others | 212 21.52 80.41Unbranded | 193 19.59 100.00If switched to branded, reason
What is most unacceptable? Milk handling practices among the mostunacceptable for food safety andnutrition? Option 1: Mixing water Option 2: Dipping hands to test milk Option 3: Using unclean containers Option 4: Using unclean strainers Option 5: Mixing edible oil/urea to add to fat content, firming upmilk Option 6: Giving injections to cattle to improve yields Option 7: Others28
On certificationSome of the branded milk has international certification? Are you aware of this?Options | Freq. Percent Cum.Yes | 96 9.81 9.81No | 883 90.19 100.00What certification are you aware ofOptions | Freq. Percent Cum.ISO | 86 91.49 91.49HACCP | 6 6.38 97.87Others | 2 2.13 100.00Table 1: Choice of certifying agency
Choice of certifying agency (in percentage)Government of India 65.78State Government 19.70International Agency 5.61Retailers Chain 0.32NGOs 3.71Farmer Groups 2.65Others 2.22Table 1: Choice of certifying agency
On organic standardsWould you like your milk to be certified as organic?Options | Freq. Percent Cum.Yes | 692 72.31 72.31No | 265 27.69 100.00What does it mean for milk to be organic?Option 1: Fodder/feed is chemical freeOption 2: No medicine given to cattleOption 3: No substance added to milk externallyOption 4: No injections/hormones given to cattleOption 5: Other, specifyOptions | Freq PercentOption 1 | 568 56.8Option 2 | 297 29.7Option 3 | 320 32.0Option 4 | 127 12.7Option 5 | 63 6.3Could organic be the highest food safety standard for milk?Options | Freq. Percent Cum.Yes | 515 55.14 55.14No | 419 44.86 100.00
Dynamics of choice across suppliers with informationshocks
Main findings from preliminary analysis• Significant information gaps related to safety indairy• Both notional and practical –something like pasteurization notwidely known or valued• Water is the principal issue with regard to safety and nutritionattribute in milk• Information shocks seem to have limited effects• Not specific - signal extraction problem• Lack of alternatives (could move only to something potentially as bad)• Does work to a larger extent in case of child consumption• Because of habit of boiling-could anchor on nutrition depletionmore than safety• Awareness of certification low- strategic withholding• Doctors main source of information, government most crediblefor certification, trust of private dairies low
Summary findings: Continued Organic is not properly understood but isconsidered to be the pinnacle of standards Size of the information shock matters At high levels of common adulteration information Movement towards the segment (the unorganized)where could have more control