Choice modelling for participation in milk marketing channels: Evidence from Punjab, India

Abstract

Over the last few decades India has witnessed tremendous growth in the dairy sector giving varied market opportunities to the milk producers. There have been growing concerns regarding exclusion of the lower castes and small holder producers from organised milk marketing channels. In this context, the paper studies the choice of milk marketing channel in relation to the demographic variables using a set of household level data from the districts of Ludhiana and Moga districts in Malwa region of Punjab. Choice modelling has been done using Bivariate Probit Model and the econometric model has been operationalized using software R. To overcome selection bias, a two-step analysis is undertaken to explain participation in liquid milk markets and conditioned on that is the choice of milk marketing channel.  The study found that Buffalo is the preferred milch animal in this area. The region is dominated by organised milk marketing channel with 69% households selling milk to the organised channel. The study concludes that social barriers which are manifested by caste of the household hamper the capability of the SC households to participate in the organised milk marketing channel.