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Market Participation Behaviour of Smallholder Dairy Farmers in Uttarakhand: A Disaggregated Analysis


  • Bardhan, Dwaipayan
  • Sharma, M.L.
  • Saxena, Raka


The study has analyzed the factors that determine dairy farmers’ choice of marketing channel and to what degree their market choice influence the level of commercialization or market participation in Uttarakhand. The study has used multinomial logit model to ascertain major factors influencing producers’ choice of marketing channels, Chow’s seminal test to examine differences between data from diverse regions (plains and hills) and a multivariate regression model to assess the level of market participation. The study has revealed that given the right institutional incentives and market infrastructure, marginal and small landholders are capable of scaling-up milk production and hence commercialize their dairy enterprises. The results of multinomial logit analysis have indicated that increase in the scale of milk production would lead a shift away from cooperatives to market as point of first sale. Milk production and extension contact have emerged as the two most important policy variables favourably influencing intensity of market participation. Distance to market has negatively influenced likelihood of producers’ market participation, irrespective of hills or plains. Once the households decide to sell, this variable has been found not to significantly impact their level of participation in the plains. However, distance to market has been observed to negatively impact intensity of market participation in the hills.

Suggested Citation

  • Bardhan, Dwaipayan & Sharma, M.L. & Saxena, Raka, 2012. "Market Participation Behaviour of Smallholder Dairy Farmers in Uttarakhand: A Disaggregated Analysis," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 25(2).
  • Handle: RePEc:ags:aerrae:137367

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    References listed on IDEAS

    1. Bernard, Tanguy & Gabre-Madhin, Eleni Z. & Taffesse, Alemayehu Seyoum, 2007. "Smallholders' commercialization through cooperatives: A diagnostic for Ethiopia," IFPRI discussion papers 722, International Food Policy Research Institute (IFPRI).
    2. Pundo, Moses O. & Fraser, Gavin C.G., 2006. "Multinominal logit analysis of household cooking fuel choice in rural Kenya: The case of Kisumu district," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(1), March.
    3. Omiti, John M. & Otieno, David Jakinda & Nyanamba, Timothy O. & McCullough, Ellen B., 2009. "Factors influencing the intensity of market participation by smallholder farmers: A case study of rural and peri-urban areas of Kenya," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 3(1), March.
    4. Holloway, Garth & Nicholson, Charles & Delgado, Chris & Staal, Steve & Ehui, Simeon, 2000. "Agroindustrialization through institutional innovation: Transaction costs, cooperatives and milk-market development in the east-African highlands," Agricultural Economics, Blackwell, vol. 23(3), pages 279-288, September.
    5. Randela, Rendani & Alemu, Zerihun Gudeta & Groenewald, Jan A., 2008. "Factors enhancing market participation by small-scale cotton farmers," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(4), December.
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    Cited by:

    1. Ndoro, Jorine & Mudhara, Maxwell & Chimonyo, Michael & Hitayezu, Patrick, 2015. "Farmers' Choice of Cattle Marketing Channels in Rural South Africa: A Transaction Cost Economics Perspective," 2015 Conference, August 9-14, 2015, Milan, Italy 212526, International Association of Agricultural Economists.
    2. Mtimet, Nadhem & Pica-Ciamarra, Ugo, 2016. "Dairy farmers’ access to market in Uganda: Observing the unobservable," 2016 AAAE Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249282, African Association of Agricultural Economists (AAAE).

    More about this item


    Milk market; multinomial logit model; Chow’s seminal test; Agricultural and Food Policy; Q12; Q13; Q18;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy


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