SlideShare a Scribd company logo
1 of 18
Download to read offline
TRADITIONAL VS MODERN MILK
MARKETING CHAINS IN INDIA
Implications for smallholder dairy farmers
Anjani Kumar
South Asia Regional (SAR) Office
International Food Policy Research Institute
Myanmar | 31 October 2019
Co-authors: A K Mishra, Sunil Saroj, P K Joshi
Outline
 Structure of milk production and marketing
 Factors affecting choice of milk marketing outlets
 Implications of milk marketing choice
 Returns from dairying
 Monthly per capita consumption expenditure
 Compliance with food safety measures at farm level
Introduction
 Rising importance of the dairy sector in the agricultural economy has
been one of the most important features of India’s agricultural
transformation
 India, with 176 million metric tons, is the largest milk producer in the
world and milk production continues to grow at a robust rate
 India’s milk market is segmented into modern (formal) and
traditional (informal) outlets.
 Modern outlets include
 dairy cooperatives and private processing firms (domestic as well as multinational);
 this segment procures about 25 percent of total milk production.
 Traditional outlets include
 local milk traders, local halwais (sweet-makers), small-scale dairy processors, and
consumer-households (Sharma 2015, Kumar et al. 2018)
 Several studies reveal that the majority of the milk in India is sold through
traditional marketing outlets
 (Staal et al. 2006; Kumar and Staal 2010; Kumar et al. 2011).
 However, the recent trend shows that dairy farmers are increasingly using
modern milk-marketing outlets.
 These emerging trends, while indicative of catering to the expanding
consumer base with growing wealth, offer challenges as well as
opportunities for both the supply of and demand for milk.
 A few studies opine that the poor will suffer from the increased use of
modern marketing outlets (Farina et al. 2000; Reardon et al. 2001).
 However, a plethora of studies show that the emergence of modern food
supply chains has improved the linkages between the buyers and
smallholders in developing countries
 (Mishra et al. 2018a, 2018b; Otsuka, Nakano, and Kazushi, 2016; Wang et al., 2014).
 A few studies which examined the case of milk marketing in India indicate
that farmers who supply milk to informal channels are less efficient and
earn lower profits per dairy animal than farmers supplying the cooperative
and the multinational sector in Punjab
 (Vandeplas et al. 2013; Kumar et al., 2018).
 Interestingly, the dominance of traditional milk-marketing outlets persists
despite the emergence and expansion of several modern milk-marketing
chains.
 The integration of dairy farmers with organized and modern milk-
marketing outlets remains a major policy discussion in India.
Structure of milk production in India
441
624
858
1,277
558
0
200
400
600
800
1000
1200
1400
Marginal Small Medium Large All
Average milk production (Litre / annum)
52.1
21.0 16.4
10.5
0.0
20.0
40.0
60.0
Marginal Small Medium Large
Share in milk production (%)
35.9 39.9
50.2
62.9
39.4
0.0
20.0
40.0
60.0
80.0
Marginal Small Medium Large All
% of agricultural households producing milk
Contribution of marginal and small farmers in total milk production
0.0
20.0
40.0
60.0
80.0
100.0
RJ MP PB KA HR AP CG MH GJ TN UP JH UK BH HP AS OD KR JK WB
55.5 55.8 58.4
63.1 63.4 66.0
70.3 70.9
75.3
81.8 83.9 85.0 89.1 89.8 92.7 93.4 93.5 94.4 95.9 98.1
Share in milk production (%)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
AP MP RJ MH HR KA PB CG GJ TN UP AS BH OD JH KR UK HP JK WB
64.1 64.2 65.5 67.8 68.3 71.1 71.2 75.3 75.8
83.7
88.9 91.9 93.2 93.6 94.3 94.3 95.3 95.8 96.7 98.3
% share in milk producing households
Average annual household milk production across states in
India (litres)
0
500
1000
1500
2000
2500
CG JH AS OD WB AP MP UK BH MH KR UP JK KA HP TN RJ GJ PB HR
18 33
129 142
200
283
471 482 520 560 573 574 614
675 713 757
955
1,397
2,118 2,148
Milk marketing channels in India
Milk Value Chain I
Consumer
Retailers
Milk cooperatives
Milk collectors
Milk Producer
Consumer
RetailerMilk Trader
Processor
Consumer
ConsumerRetailerConsumer
Milk Trader
Milk Value Chain
II
Milk Value Chain
V
Milk Value Chain
IV
Milk Value Chain
III
Milk marketing pattern in India
Source: Kumar et al (2019)
53.2
22.4
15.7
8.7
% share in marketed milk
Marginal Small Medium Large
51.8
14.7
19.8
9.7
2
0.9 1.1 0.1
Distribution of milk producers selling to different
outlets
Not seeling Household Milk vendor
Formal market Household & local Household & formal
Local & formal All
0
100
200
300
400
500
600
Marginal Small Medium Large All
237
349
431
558
294
Marketed surplus of milk (L/annum/household)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Marginal Small Medium Large All
53.7
56.0
50.3
43.7
52.6
Marketed surplus as % of milk production
Structure of marketed surplus milk across states in India, 2013
0
200
400
600
800
1000
1200
GJ PB TN HR KA KR MH RJ MP UP BH AP UK JK HP WB AS OD JH CG
1052 998
654
592
502 497
424
230 215 208 205 200 186 176 133 110 108 97
17 12
Average annual marketed surplus of milk (litres)
0
10
20
30
40
50
60
70
80
90
KR TN AS MH GJ KA AP CG OD WB JH PB MP BH UK UP JK HR RJ HP
86.9 86.4 83.6
75.8 75.3 74.4
70.6 68.6 68.3
55.2
51.4
47.1 45.7
39.4 38.6 36.2
28.7 27.6 24.1
18.7
% of milk production
Factors affecting choice of milk marketing channels
 Age
 Gender
 Education
 Herd size and composition
 Scale of milk production
 Caste affiliation
 household size
 Land size
 Source of information
Impact of dairy cooperatives
Member Nonmember Treatment effects
Milk yield
Member (a) 4.09 (c) 2.93 TT = 1.16***
Nonmember (d) 2.07 (b) 1.80 TU = 0.27***
Net return per liter
Member (a) 7.16 (c) 5.20 TT = 1.96***
Nonmember (d) 4.87 (b) 3.52 TU = 1.35***
FSI
Member (a) 0.43 (c) 0.39 TT = 0.04***
Nonmember (d) 0.45 (b) 0.42 TU = 0.03***
Kumar et al 2018
Impact of dairy cooperative membership on milk yield, net return,
and FSM adoption by farm size
Farm Category
Mean outcome
ATT t-value Change in %
Members Nonmembers
Milk yield
Landless 5.2 3.3 1.9 1.7102* 57.6
Marginal 8.3 4.3 4.0 3.3245*** 93.0
Small and large 8.5 4.7 3.8 2.5282** 80.9
Net return per liter
Landless 8.4 8.0 0.4 0.1176ns 4.7
Marginal 12.5 7.0 5.4 2.7300*** 77.1
Small and large 10.0 5.3 4.7 1.9171* 89.2
Adoption of FSI
Landless 0.44 0.36 0.8 2.1391** 20.4
Marginal 0.53 0.44 0.9 3.251*** 20.4
Small and large 0.56 0.49 0.7 2.185** 12.6
Kumar et al 2018
Average treatment effects of different milk marketing
channels
Kumar et al 2019
Milk marketing outlets Annual income from dairying (In Rs.)
Household 8937.95***
Local trader 14280.86***
Formal chain 19434.81***
Household and local 22265.72***
Household and modern 30214.07***
Local and modern 24396.81***
All three 17815.19***
Conclusion and policy recommendations
 Our studies suggest that the likelihood of selling to milk-marketing outlets is
influenced by observable characteristics like:
ofamily size, social caste, educational attainment, training, and farm size as well
as receipt of publicly funded unemployment benefits, food subsidies, and
sources of technical information
 These findings can inform the design and targeting of policies that aim at
fostering adoption of single and multiple milk-marketing outlets in India
 Participation of smallholder dairy farmers in milk-marketing should be
encouraged
 Selling to formal chains should be encouraged because this outlet yields
significant positive effects on Indian smallholder dairy farmers’ economic welfare
 The participation in modern milk marketing chains be facilitated by improving
extensive services, reducing entry barriers based on caste and assets.
Thank you

More Related Content

What's hot

ppt for mother dairy
ppt for mother dairyppt for mother dairy
ppt for mother dairymirza rashid
 
Dairy industry in india
Dairy industry in indiaDairy industry in india
Dairy industry in indiaSAMEER LAKHANI
 
A MINI PROJECT REPORT ON AAVIN INDUSTRY
A MINI PROJECT REPORT ON AAVIN INDUSTRYA MINI PROJECT REPORT ON AAVIN INDUSTRY
A MINI PROJECT REPORT ON AAVIN INDUSTRYJenson Samraj
 
internship report_aavin
 internship report_aavin internship report_aavin
internship report_aavinAron Franklin
 
Overview of indian dairy industry
Overview of indian dairy industryOverview of indian dairy industry
Overview of indian dairy industryChandni Sahgal
 
Sumul project ankit thummar
Sumul project ankit thummarSumul project ankit thummar
Sumul project ankit thummarvisheshkheni
 
Mother dairy- A report
Mother dairy- A reportMother dairy- A report
Mother dairy- A reportGurpreet Singh
 
In plant training at Amul Dudhmotisagar Dairy, Dharuhera
In plant training at Amul Dudhmotisagar Dairy, DharuheraIn plant training at Amul Dudhmotisagar Dairy, Dharuhera
In plant training at Amul Dudhmotisagar Dairy, DharuheraAbdul Rehman
 
Amul_promotional schemes
Amul_promotional schemesAmul_promotional schemes
Amul_promotional schemesRahul Kumar
 
Aavin quality procedures
Aavin   quality proceduresAavin   quality procedures
Aavin quality proceduresUma Rungta
 
Indian dairy industry future prospects & key challenges
Indian dairy industry   future prospects & key challengesIndian dairy industry   future prospects & key challenges
Indian dairy industry future prospects & key challengesJitendra Vala
 
Saras final ppt
Saras final pptSaras final ppt
Saras final pptchimanpal
 
Value Added Dairy Products
Value Added Dairy ProductsValue Added Dairy Products
Value Added Dairy ProductsRobin Kapoor
 

What's hot (20)

ppt for mother dairy
ppt for mother dairyppt for mother dairy
ppt for mother dairy
 
Dairy industry in india
Dairy industry in indiaDairy industry in india
Dairy industry in india
 
A MINI PROJECT REPORT ON AAVIN INDUSTRY
A MINI PROJECT REPORT ON AAVIN INDUSTRYA MINI PROJECT REPORT ON AAVIN INDUSTRY
A MINI PROJECT REPORT ON AAVIN INDUSTRY
 
Sumul dairy
Sumul dairy Sumul dairy
Sumul dairy
 
internship report_aavin
 internship report_aavin internship report_aavin
internship report_aavin
 
Overview of indian dairy industry
Overview of indian dairy industryOverview of indian dairy industry
Overview of indian dairy industry
 
Mother dairy final report
Mother dairy final reportMother dairy final report
Mother dairy final report
 
Milma prrofile
Milma prrofileMilma prrofile
Milma prrofile
 
Sumul project ankit thummar
Sumul project ankit thummarSumul project ankit thummar
Sumul project ankit thummar
 
aavin project.pdf
aavin project.pdfaavin project.pdf
aavin project.pdf
 
Mother dairy- A report
Mother dairy- A reportMother dairy- A report
Mother dairy- A report
 
Indian dairy industry
Indian dairy industryIndian dairy industry
Indian dairy industry
 
In plant training at Amul Dudhmotisagar Dairy, Dharuhera
In plant training at Amul Dudhmotisagar Dairy, DharuheraIn plant training at Amul Dudhmotisagar Dairy, Dharuhera
In plant training at Amul Dudhmotisagar Dairy, Dharuhera
 
Mother dairy ppt
Mother dairy pptMother dairy ppt
Mother dairy ppt
 
Amul_promotional schemes
Amul_promotional schemesAmul_promotional schemes
Amul_promotional schemes
 
Aavin quality procedures
Aavin   quality proceduresAavin   quality procedures
Aavin quality procedures
 
Supply chain of dairy
Supply chain of dairySupply chain of dairy
Supply chain of dairy
 
Indian dairy industry future prospects & key challenges
Indian dairy industry   future prospects & key challengesIndian dairy industry   future prospects & key challenges
Indian dairy industry future prospects & key challenges
 
Saras final ppt
Saras final pptSaras final ppt
Saras final ppt
 
Value Added Dairy Products
Value Added Dairy ProductsValue Added Dairy Products
Value Added Dairy Products
 

Similar to Traditional Versus Modern Milk Marketing Chains in India: Implications for Smallholder Dairy Farmers

Indian dairy industry & mastitis tks
Indian dairy industry & mastitis  tksIndian dairy industry & mastitis  tks
Indian dairy industry & mastitis tksTarun Sharma
 
Dairy cooperatives and milk marketing in india constraints and opportunities
Dairy cooperatives and milk marketing in india constraints and opportunitiesDairy cooperatives and milk marketing in india constraints and opportunities
Dairy cooperatives and milk marketing in india constraints and opportunitiesDr Vijay Pithadia Director
 
Quality and safety improvements in informal milk markets and implications for...
Quality and safety improvements in informal milk markets and implications for...Quality and safety improvements in informal milk markets and implications for...
Quality and safety improvements in informal milk markets and implications for...ILRI
 
Improving food safety and quality in traditional dairy value chain in Assam: ...
Improving food safety and quality in traditional dairy value chain in Assam: ...Improving food safety and quality in traditional dairy value chain in Assam: ...
Improving food safety and quality in traditional dairy value chain in Assam: ...ILRI
 
Dairy Processing In India-Overview
Dairy Processing In India-OverviewDairy Processing In India-Overview
Dairy Processing In India-OverviewSumit Kulkarni
 
Indian Dairying
Indian DairyingIndian Dairying
Indian DairyingILRI
 
Dairy industry in india
Dairy industry in indiaDairy industry in india
Dairy industry in indiaAayush Wadhwa
 
Analysis of milk production, butter marketing and household use of inputs in ...
Analysis of milk production, butter marketing and household use of inputs in ...Analysis of milk production, butter marketing and household use of inputs in ...
Analysis of milk production, butter marketing and household use of inputs in ...ILRI
 
Operational performance of the pondicherry co operative
Operational performance of the pondicherry co operativeOperational performance of the pondicherry co operative
Operational performance of the pondicherry co operativeIAEME Publication
 
Marketing and Institutional Characteristics of Dairy Industry In Indonesia
Marketing and Institutional Characteristics of Dairy Industry In IndonesiaMarketing and Institutional Characteristics of Dairy Industry In Indonesia
Marketing and Institutional Characteristics of Dairy Industry In IndonesiaAgriculture Journal IJOEAR
 
The Status of Paddy and Rice and Rice Industry in Malaysia
The Status of Paddy and Rice and Rice Industry in MalaysiaThe Status of Paddy and Rice and Rice Industry in Malaysia
The Status of Paddy and Rice and Rice Industry in MalaysiaKhazanahResearchInstitute
 
Project Report on Vijaykant Dairy and Food Products Pvt Ltd
Project Report on Vijaykant Dairy and Food Products Pvt LtdProject Report on Vijaykant Dairy and Food Products Pvt Ltd
Project Report on Vijaykant Dairy and Food Products Pvt LtdRakesh Rachayya
 
Leadership of indian coop dairy industry
 Leadership of indian coop dairy industry Leadership of indian coop dairy industry
Leadership of indian coop dairy industryAmit Gupta
 
Leadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy IndustryLeadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy IndustryAmit Gupta
 
Leadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy IndustryLeadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy IndustryAmit Gupta
 
Leadership of indian coop dairy industry
 Leadership of indian coop dairy industry Leadership of indian coop dairy industry
Leadership of indian coop dairy industryAmit Gupta
 
Leadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy IndustryLeadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy IndustryAmit Gupta
 
Dairy Industry in India: Represent the Growth of Value Added Products
Dairy Industry in India: Represent the Growth of Value Added ProductsDairy Industry in India: Represent the Growth of Value Added Products
Dairy Industry in India: Represent the Growth of Value Added ProductsIMARC Group
 
Livestock marketing and supply chain management of livestock products
Livestock marketing and supply chain management of livestock products Livestock marketing and supply chain management of livestock products
Livestock marketing and supply chain management of livestock products ILRI
 

Similar to Traditional Versus Modern Milk Marketing Chains in India: Implications for Smallholder Dairy Farmers (20)

Indian dairy industry & mastitis tks
Indian dairy industry & mastitis  tksIndian dairy industry & mastitis  tks
Indian dairy industry & mastitis tks
 
Dairy cooperatives and milk marketing in india constraints and opportunities
Dairy cooperatives and milk marketing in india constraints and opportunitiesDairy cooperatives and milk marketing in india constraints and opportunities
Dairy cooperatives and milk marketing in india constraints and opportunities
 
Quality and safety improvements in informal milk markets and implications for...
Quality and safety improvements in informal milk markets and implications for...Quality and safety improvements in informal milk markets and implications for...
Quality and safety improvements in informal milk markets and implications for...
 
Improving food safety and quality in traditional dairy value chain in Assam: ...
Improving food safety and quality in traditional dairy value chain in Assam: ...Improving food safety and quality in traditional dairy value chain in Assam: ...
Improving food safety and quality in traditional dairy value chain in Assam: ...
 
Dairy Processing In India-Overview
Dairy Processing In India-OverviewDairy Processing In India-Overview
Dairy Processing In India-Overview
 
Indian Dairying
Indian DairyingIndian Dairying
Indian Dairying
 
Dairy industry in india
Dairy industry in indiaDairy industry in india
Dairy industry in india
 
Analysis of milk production, butter marketing and household use of inputs in ...
Analysis of milk production, butter marketing and household use of inputs in ...Analysis of milk production, butter marketing and household use of inputs in ...
Analysis of milk production, butter marketing and household use of inputs in ...
 
Operational performance of the pondicherry co operative
Operational performance of the pondicherry co operativeOperational performance of the pondicherry co operative
Operational performance of the pondicherry co operative
 
Mother dairy
Mother dairyMother dairy
Mother dairy
 
Marketing and Institutional Characteristics of Dairy Industry In Indonesia
Marketing and Institutional Characteristics of Dairy Industry In IndonesiaMarketing and Institutional Characteristics of Dairy Industry In Indonesia
Marketing and Institutional Characteristics of Dairy Industry In Indonesia
 
The Status of Paddy and Rice and Rice Industry in Malaysia
The Status of Paddy and Rice and Rice Industry in MalaysiaThe Status of Paddy and Rice and Rice Industry in Malaysia
The Status of Paddy and Rice and Rice Industry in Malaysia
 
Project Report on Vijaykant Dairy and Food Products Pvt Ltd
Project Report on Vijaykant Dairy and Food Products Pvt LtdProject Report on Vijaykant Dairy and Food Products Pvt Ltd
Project Report on Vijaykant Dairy and Food Products Pvt Ltd
 
Leadership of indian coop dairy industry
 Leadership of indian coop dairy industry Leadership of indian coop dairy industry
Leadership of indian coop dairy industry
 
Leadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy IndustryLeadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy Industry
 
Leadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy IndustryLeadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy Industry
 
Leadership of indian coop dairy industry
 Leadership of indian coop dairy industry Leadership of indian coop dairy industry
Leadership of indian coop dairy industry
 
Leadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy IndustryLeadership Of Indian Coop Dairy Industry
Leadership Of Indian Coop Dairy Industry
 
Dairy Industry in India: Represent the Growth of Value Added Products
Dairy Industry in India: Represent the Growth of Value Added ProductsDairy Industry in India: Represent the Growth of Value Added Products
Dairy Industry in India: Represent the Growth of Value Added Products
 
Livestock marketing and supply chain management of livestock products
Livestock marketing and supply chain management of livestock products Livestock marketing and supply chain management of livestock products
Livestock marketing and supply chain management of livestock products
 

More from International Food Policy Research Institute

Institutional and Governance Innovation in Thailand’s Food System: The Role o...
Institutional and Governance Innovation in Thailand’s Food System: The Role o...Institutional and Governance Innovation in Thailand’s Food System: The Role o...
Institutional and Governance Innovation in Thailand’s Food System: The Role o...International Food Policy Research Institute
 
Farm Production, Market Access and Dietary Diversity in China’s Poor Rural Ho...
Farm Production, Market Access and Dietary Diversity in China’s Poor Rural Ho...Farm Production, Market Access and Dietary Diversity in China’s Poor Rural Ho...
Farm Production, Market Access and Dietary Diversity in China’s Poor Rural Ho...International Food Policy Research Institute
 

More from International Food Policy Research Institute (20)

The History of Cooking Oil Fortification in Indonesia: Government Support for...
The History of Cooking Oil Fortification in Indonesia: Government Support for...The History of Cooking Oil Fortification in Indonesia: Government Support for...
The History of Cooking Oil Fortification in Indonesia: Government Support for...
 
Food Fortification Policies in the Asia Region
Food Fortification Policies in the Asia RegionFood Fortification Policies in the Asia Region
Food Fortification Policies in the Asia Region
 
Wheat and Cooking Oil/Ghee Fortification in Pakistan
Wheat and Cooking Oil/Ghee Fortification in PakistanWheat and Cooking Oil/Ghee Fortification in Pakistan
Wheat and Cooking Oil/Ghee Fortification in Pakistan
 
China's Food Safety regulatory system: Achievements, Challenges and Suggestions
China's Food Safety regulatory system: Achievements, Challenges and SuggestionsChina's Food Safety regulatory system: Achievements, Challenges and Suggestions
China's Food Safety regulatory system: Achievements, Challenges and Suggestions
 
Institutional and Governance Innovation in Thailand’s Food System: The Role o...
Institutional and Governance Innovation in Thailand’s Food System: The Role o...Institutional and Governance Innovation in Thailand’s Food System: The Role o...
Institutional and Governance Innovation in Thailand’s Food System: The Role o...
 
Compliance of Producers and Adoption of Consumers in the Case of Food Safety ...
Compliance of Producers and Adoption of Consumers in the Case of Food Safety ...Compliance of Producers and Adoption of Consumers in the Case of Food Safety ...
Compliance of Producers and Adoption of Consumers in the Case of Food Safety ...
 
Current Status of Agricultural Biotechnology in Thailand
Current Status of Agricultural Biotechnology in ThailandCurrent Status of Agricultural Biotechnology in Thailand
Current Status of Agricultural Biotechnology in Thailand
 
Creating and Implementing Biosafety Regulations: The Philippine Experience
Creating and Implementing Biosafety Regulations: The Philippine Experience Creating and Implementing Biosafety Regulations: The Philippine Experience
Creating and Implementing Biosafety Regulations: The Philippine Experience
 
Making Vegetable Markets Work
Making Vegetable Markets WorkMaking Vegetable Markets Work
Making Vegetable Markets Work
 
Soybean Value Chains for Rural Development
Soybean Value Chains for Rural DevelopmentSoybean Value Chains for Rural Development
Soybean Value Chains for Rural Development
 
Findings from the Study on Nutrition-Sensitive Value Chains in the Feed the F...
Findings from the Study on Nutrition-Sensitive Value Chains in the Feed the F...Findings from the Study on Nutrition-Sensitive Value Chains in the Feed the F...
Findings from the Study on Nutrition-Sensitive Value Chains in the Feed the F...
 
Farm Production, Market Access and Dietary Diversity in China’s Poor Rural Ho...
Farm Production, Market Access and Dietary Diversity in China’s Poor Rural Ho...Farm Production, Market Access and Dietary Diversity in China’s Poor Rural Ho...
Farm Production, Market Access and Dietary Diversity in China’s Poor Rural Ho...
 
The Livestock Sector in India: Progress and Challenges
The Livestock Sector in India: Progress and ChallengesThe Livestock Sector in India: Progress and Challenges
The Livestock Sector in India: Progress and Challenges
 
Production Diversity and Market Access for Predicting Animal-source Food Cons...
Production Diversity and Market Access for Predicting Animal-source Food Cons...Production Diversity and Market Access for Predicting Animal-source Food Cons...
Production Diversity and Market Access for Predicting Animal-source Food Cons...
 
The Quiet Revolution in Myanmar’s Aquaculture Value Chain
The Quiet Revolution in Myanmar’s Aquaculture Value ChainThe Quiet Revolution in Myanmar’s Aquaculture Value Chain
The Quiet Revolution in Myanmar’s Aquaculture Value Chain
 
Does e-commerce Increase Food Consumption in Rural Areas? Evidence from China
Does e-commerce Increase Food Consumption in Rural Areas? Evidence from ChinaDoes e-commerce Increase Food Consumption in Rural Areas? Evidence from China
Does e-commerce Increase Food Consumption in Rural Areas? Evidence from China
 
Impacting at Scale: From .5% to + 40%
Impacting at Scale: From .5% to + 40% Impacting at Scale: From .5% to + 40%
Impacting at Scale: From .5% to + 40%
 
Regulatory Cooperation in ASEAN Good Agricultural Practices
Regulatory Cooperation in ASEAN Good Agricultural PracticesRegulatory Cooperation in ASEAN Good Agricultural Practices
Regulatory Cooperation in ASEAN Good Agricultural Practices
 
Pakistan’s Multi-Sectoral Nutrition Strategy
Pakistan’s Multi-Sectoral Nutrition Strategy Pakistan’s Multi-Sectoral Nutrition Strategy
Pakistan’s Multi-Sectoral Nutrition Strategy
 
Transforming Food and Agriculture Systems to Improve Food Security and Nutrit...
Transforming Food and Agriculture Systems to Improve Food Security and Nutrit...Transforming Food and Agriculture Systems to Improve Food Security and Nutrit...
Transforming Food and Agriculture Systems to Improve Food Security and Nutrit...
 

Recently uploaded

Thermal Death Kinetics and various Isotherms
Thermal Death Kinetics and various IsothermsThermal Death Kinetics and various Isotherms
Thermal Death Kinetics and various IsothermsSasiK25
 
Prediksi Angka BBFS 10 Digit Betting 10 Perak Magnumtogel
Prediksi Angka BBFS 10 Digit Betting  10 Perak MagnumtogelPrediksi Angka BBFS 10 Digit Betting  10 Perak Magnumtogel
Prediksi Angka BBFS 10 Digit Betting 10 Perak Magnumtogeltok dalang
 
2024 Safari Supper in Kingsnympton, North Devon
2024 Safari Supper in Kingsnympton, North Devon2024 Safari Supper in Kingsnympton, North Devon
2024 Safari Supper in Kingsnympton, North DevonMartinPailthorpe
 
Uk-NO1 Best Black Magic Specialist Near Me Spiritual Healer Powerful Love Spe...
Uk-NO1 Best Black Magic Specialist Near Me Spiritual Healer Powerful Love Spe...Uk-NO1 Best Black Magic Specialist Near Me Spiritual Healer Powerful Love Spe...
Uk-NO1 Best Black Magic Specialist Near Me Spiritual Healer Powerful Love Spe...Amil baba
 
DETAILED-LESSON-PLAN FORMAT DOCUMENTS YY
DETAILED-LESSON-PLAN FORMAT DOCUMENTS YYDETAILED-LESSON-PLAN FORMAT DOCUMENTS YY
DETAILED-LESSON-PLAN FORMAT DOCUMENTS YYImilyAcma
 
pathology questions for studying and notes
pathology questions for studying and notespathology questions for studying and notes
pathology questions for studying and notesAnaAbuladze7
 
Jelovnik Bistro Pivnica Pivnica 2024 godina
Jelovnik Bistro Pivnica Pivnica 2024 godinaJelovnik Bistro Pivnica Pivnica 2024 godina
Jelovnik Bistro Pivnica Pivnica 2024 godinaEmaTomek
 
Julian Helou's Exquisite Journey Through Thai Cuisine
Julian Helou's Exquisite Journey Through Thai CuisineJulian Helou's Exquisite Journey Through Thai Cuisine
Julian Helou's Exquisite Journey Through Thai CuisineJulianHelou1
 
Dubai's Food and Discount Deals - A culinary experience
Dubai's Food and Discount Deals - A culinary experienceDubai's Food and Discount Deals - A culinary experience
Dubai's Food and Discount Deals - A culinary experiencecouponzguruuae
 
Hungry? Snack on these edible native plants
Hungry? Snack on these edible native plantsHungry? Snack on these edible native plants
Hungry? Snack on these edible native plantsDeidre Pike
 
Organic Farming in Focus- Rodale’s Generational Perspective.pdf
Organic Farming in Focus- Rodale’s Generational Perspective.pdfOrganic Farming in Focus- Rodale’s Generational Perspective.pdf
Organic Farming in Focus- Rodale’s Generational Perspective.pdfStephen Gleave
 
GRADE 10 QUARTER 4 WEEK 2 Cook Meat Cuts
GRADE 10 QUARTER 4 WEEK 2 Cook Meat CutsGRADE 10 QUARTER 4 WEEK 2 Cook Meat Cuts
GRADE 10 QUARTER 4 WEEK 2 Cook Meat CutsKattieAlisonMacatugg1
 
日本学位记,筑波大学毕业证书1:1制作
日本学位记,筑波大学毕业证书1:1制作日本学位记,筑波大学毕业证书1:1制作
日本学位记,筑波大学毕业证书1:1制作aecnsnzk
 

Recently uploaded (13)

Thermal Death Kinetics and various Isotherms
Thermal Death Kinetics and various IsothermsThermal Death Kinetics and various Isotherms
Thermal Death Kinetics and various Isotherms
 
Prediksi Angka BBFS 10 Digit Betting 10 Perak Magnumtogel
Prediksi Angka BBFS 10 Digit Betting  10 Perak MagnumtogelPrediksi Angka BBFS 10 Digit Betting  10 Perak Magnumtogel
Prediksi Angka BBFS 10 Digit Betting 10 Perak Magnumtogel
 
2024 Safari Supper in Kingsnympton, North Devon
2024 Safari Supper in Kingsnympton, North Devon2024 Safari Supper in Kingsnympton, North Devon
2024 Safari Supper in Kingsnympton, North Devon
 
Uk-NO1 Best Black Magic Specialist Near Me Spiritual Healer Powerful Love Spe...
Uk-NO1 Best Black Magic Specialist Near Me Spiritual Healer Powerful Love Spe...Uk-NO1 Best Black Magic Specialist Near Me Spiritual Healer Powerful Love Spe...
Uk-NO1 Best Black Magic Specialist Near Me Spiritual Healer Powerful Love Spe...
 
DETAILED-LESSON-PLAN FORMAT DOCUMENTS YY
DETAILED-LESSON-PLAN FORMAT DOCUMENTS YYDETAILED-LESSON-PLAN FORMAT DOCUMENTS YY
DETAILED-LESSON-PLAN FORMAT DOCUMENTS YY
 
pathology questions for studying and notes
pathology questions for studying and notespathology questions for studying and notes
pathology questions for studying and notes
 
Jelovnik Bistro Pivnica Pivnica 2024 godina
Jelovnik Bistro Pivnica Pivnica 2024 godinaJelovnik Bistro Pivnica Pivnica 2024 godina
Jelovnik Bistro Pivnica Pivnica 2024 godina
 
Julian Helou's Exquisite Journey Through Thai Cuisine
Julian Helou's Exquisite Journey Through Thai CuisineJulian Helou's Exquisite Journey Through Thai Cuisine
Julian Helou's Exquisite Journey Through Thai Cuisine
 
Dubai's Food and Discount Deals - A culinary experience
Dubai's Food and Discount Deals - A culinary experienceDubai's Food and Discount Deals - A culinary experience
Dubai's Food and Discount Deals - A culinary experience
 
Hungry? Snack on these edible native plants
Hungry? Snack on these edible native plantsHungry? Snack on these edible native plants
Hungry? Snack on these edible native plants
 
Organic Farming in Focus- Rodale’s Generational Perspective.pdf
Organic Farming in Focus- Rodale’s Generational Perspective.pdfOrganic Farming in Focus- Rodale’s Generational Perspective.pdf
Organic Farming in Focus- Rodale’s Generational Perspective.pdf
 
GRADE 10 QUARTER 4 WEEK 2 Cook Meat Cuts
GRADE 10 QUARTER 4 WEEK 2 Cook Meat CutsGRADE 10 QUARTER 4 WEEK 2 Cook Meat Cuts
GRADE 10 QUARTER 4 WEEK 2 Cook Meat Cuts
 
日本学位记,筑波大学毕业证书1:1制作
日本学位记,筑波大学毕业证书1:1制作日本学位记,筑波大学毕业证书1:1制作
日本学位记,筑波大学毕业证书1:1制作
 

Traditional Versus Modern Milk Marketing Chains in India: Implications for Smallholder Dairy Farmers

  • 1. TRADITIONAL VS MODERN MILK MARKETING CHAINS IN INDIA Implications for smallholder dairy farmers Anjani Kumar South Asia Regional (SAR) Office International Food Policy Research Institute Myanmar | 31 October 2019 Co-authors: A K Mishra, Sunil Saroj, P K Joshi
  • 2. Outline  Structure of milk production and marketing  Factors affecting choice of milk marketing outlets  Implications of milk marketing choice  Returns from dairying  Monthly per capita consumption expenditure  Compliance with food safety measures at farm level
  • 3. Introduction  Rising importance of the dairy sector in the agricultural economy has been one of the most important features of India’s agricultural transformation  India, with 176 million metric tons, is the largest milk producer in the world and milk production continues to grow at a robust rate  India’s milk market is segmented into modern (formal) and traditional (informal) outlets.  Modern outlets include  dairy cooperatives and private processing firms (domestic as well as multinational);  this segment procures about 25 percent of total milk production.  Traditional outlets include  local milk traders, local halwais (sweet-makers), small-scale dairy processors, and consumer-households (Sharma 2015, Kumar et al. 2018)
  • 4.  Several studies reveal that the majority of the milk in India is sold through traditional marketing outlets  (Staal et al. 2006; Kumar and Staal 2010; Kumar et al. 2011).  However, the recent trend shows that dairy farmers are increasingly using modern milk-marketing outlets.  These emerging trends, while indicative of catering to the expanding consumer base with growing wealth, offer challenges as well as opportunities for both the supply of and demand for milk.  A few studies opine that the poor will suffer from the increased use of modern marketing outlets (Farina et al. 2000; Reardon et al. 2001).  However, a plethora of studies show that the emergence of modern food supply chains has improved the linkages between the buyers and smallholders in developing countries  (Mishra et al. 2018a, 2018b; Otsuka, Nakano, and Kazushi, 2016; Wang et al., 2014).
  • 5.  A few studies which examined the case of milk marketing in India indicate that farmers who supply milk to informal channels are less efficient and earn lower profits per dairy animal than farmers supplying the cooperative and the multinational sector in Punjab  (Vandeplas et al. 2013; Kumar et al., 2018).  Interestingly, the dominance of traditional milk-marketing outlets persists despite the emergence and expansion of several modern milk-marketing chains.  The integration of dairy farmers with organized and modern milk- marketing outlets remains a major policy discussion in India.
  • 6. Structure of milk production in India 441 624 858 1,277 558 0 200 400 600 800 1000 1200 1400 Marginal Small Medium Large All Average milk production (Litre / annum) 52.1 21.0 16.4 10.5 0.0 20.0 40.0 60.0 Marginal Small Medium Large Share in milk production (%) 35.9 39.9 50.2 62.9 39.4 0.0 20.0 40.0 60.0 80.0 Marginal Small Medium Large All % of agricultural households producing milk
  • 7. Contribution of marginal and small farmers in total milk production 0.0 20.0 40.0 60.0 80.0 100.0 RJ MP PB KA HR AP CG MH GJ TN UP JH UK BH HP AS OD KR JK WB 55.5 55.8 58.4 63.1 63.4 66.0 70.3 70.9 75.3 81.8 83.9 85.0 89.1 89.8 92.7 93.4 93.5 94.4 95.9 98.1 Share in milk production (%) 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 AP MP RJ MH HR KA PB CG GJ TN UP AS BH OD JH KR UK HP JK WB 64.1 64.2 65.5 67.8 68.3 71.1 71.2 75.3 75.8 83.7 88.9 91.9 93.2 93.6 94.3 94.3 95.3 95.8 96.7 98.3 % share in milk producing households
  • 8. Average annual household milk production across states in India (litres) 0 500 1000 1500 2000 2500 CG JH AS OD WB AP MP UK BH MH KR UP JK KA HP TN RJ GJ PB HR 18 33 129 142 200 283 471 482 520 560 573 574 614 675 713 757 955 1,397 2,118 2,148
  • 9. Milk marketing channels in India Milk Value Chain I Consumer Retailers Milk cooperatives Milk collectors Milk Producer Consumer RetailerMilk Trader Processor Consumer ConsumerRetailerConsumer Milk Trader Milk Value Chain II Milk Value Chain V Milk Value Chain IV Milk Value Chain III
  • 10. Milk marketing pattern in India Source: Kumar et al (2019) 53.2 22.4 15.7 8.7 % share in marketed milk Marginal Small Medium Large 51.8 14.7 19.8 9.7 2 0.9 1.1 0.1 Distribution of milk producers selling to different outlets Not seeling Household Milk vendor Formal market Household & local Household & formal Local & formal All
  • 11. 0 100 200 300 400 500 600 Marginal Small Medium Large All 237 349 431 558 294 Marketed surplus of milk (L/annum/household) 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Marginal Small Medium Large All 53.7 56.0 50.3 43.7 52.6 Marketed surplus as % of milk production
  • 12. Structure of marketed surplus milk across states in India, 2013 0 200 400 600 800 1000 1200 GJ PB TN HR KA KR MH RJ MP UP BH AP UK JK HP WB AS OD JH CG 1052 998 654 592 502 497 424 230 215 208 205 200 186 176 133 110 108 97 17 12 Average annual marketed surplus of milk (litres) 0 10 20 30 40 50 60 70 80 90 KR TN AS MH GJ KA AP CG OD WB JH PB MP BH UK UP JK HR RJ HP 86.9 86.4 83.6 75.8 75.3 74.4 70.6 68.6 68.3 55.2 51.4 47.1 45.7 39.4 38.6 36.2 28.7 27.6 24.1 18.7 % of milk production
  • 13. Factors affecting choice of milk marketing channels  Age  Gender  Education  Herd size and composition  Scale of milk production  Caste affiliation  household size  Land size  Source of information
  • 14. Impact of dairy cooperatives Member Nonmember Treatment effects Milk yield Member (a) 4.09 (c) 2.93 TT = 1.16*** Nonmember (d) 2.07 (b) 1.80 TU = 0.27*** Net return per liter Member (a) 7.16 (c) 5.20 TT = 1.96*** Nonmember (d) 4.87 (b) 3.52 TU = 1.35*** FSI Member (a) 0.43 (c) 0.39 TT = 0.04*** Nonmember (d) 0.45 (b) 0.42 TU = 0.03*** Kumar et al 2018
  • 15. Impact of dairy cooperative membership on milk yield, net return, and FSM adoption by farm size Farm Category Mean outcome ATT t-value Change in % Members Nonmembers Milk yield Landless 5.2 3.3 1.9 1.7102* 57.6 Marginal 8.3 4.3 4.0 3.3245*** 93.0 Small and large 8.5 4.7 3.8 2.5282** 80.9 Net return per liter Landless 8.4 8.0 0.4 0.1176ns 4.7 Marginal 12.5 7.0 5.4 2.7300*** 77.1 Small and large 10.0 5.3 4.7 1.9171* 89.2 Adoption of FSI Landless 0.44 0.36 0.8 2.1391** 20.4 Marginal 0.53 0.44 0.9 3.251*** 20.4 Small and large 0.56 0.49 0.7 2.185** 12.6 Kumar et al 2018
  • 16. Average treatment effects of different milk marketing channels Kumar et al 2019 Milk marketing outlets Annual income from dairying (In Rs.) Household 8937.95*** Local trader 14280.86*** Formal chain 19434.81*** Household and local 22265.72*** Household and modern 30214.07*** Local and modern 24396.81*** All three 17815.19***
  • 17. Conclusion and policy recommendations  Our studies suggest that the likelihood of selling to milk-marketing outlets is influenced by observable characteristics like: ofamily size, social caste, educational attainment, training, and farm size as well as receipt of publicly funded unemployment benefits, food subsidies, and sources of technical information  These findings can inform the design and targeting of policies that aim at fostering adoption of single and multiple milk-marketing outlets in India  Participation of smallholder dairy farmers in milk-marketing should be encouraged  Selling to formal chains should be encouraged because this outlet yields significant positive effects on Indian smallholder dairy farmers’ economic welfare  The participation in modern milk marketing chains be facilitated by improving extensive services, reducing entry barriers based on caste and assets.